UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
Form6-K
REPORT OF FOREIGN PRIVATE ISSUER
PURSUANT TO RULE13a-16 OR15d-16
UNDER THE SECURITIES EXCHANGE ACT OF 1934
For the month ofMarch 2020
Commission File Number:000-53445
KB Financial Group Inc.
(Translation of registrant’s name into English)
26,Gukjegeumyung-ro8-gil,Yeongdeungpo-gu, Seoul 07331, Korea
(Address of principal executive office)
Indicate by check mark whether the registrant files or will file annual reports under cover ofForm 20-F orForm 40-F.
Form 20-F ☒ Form 40-F ☐
Indicate by check mark if the registrant is submitting theForm 6-K in paper as permitted byRegulation S-T Rule 101(b)(1): ☐
Note: RegulationS-T Rule 101(b)(1) only permits the submission in paper of a Form6-K if submitted solely to provide an attached annual report to security holders.
Indicate by check mark if the registrant is submitting theForm 6-K in paper as permitted byRegulation S-T Rule 101(b)(7): ☐
Note: RegulationS-T Rule 101(b)(7) only permits the submission in paper of a Form6-K if submitted to furnish a report or other document that the registrant foreign private issuer must furnish and make public under the laws of the jurisdiction in which the registrant is incorporated, domiciled or legally organized (the registrant’s “home country”), or under the rules of the home country exchange on which the registrant’s securities are traded, as long as the report or other document is not a press release, is not required to be and has not been distributed to the registrant’s security holders, and, if discussing a material event, has already been the subject of a Form6-K submission or other Commission filing on EDGAR.
Summary of Business Report for Fiscal Year 2019
On March 30, 2020, KB Financial Group Inc. (“KB Financial Group”) filed its business report for the fiscal year ended December 31, 2019 (the “Business Report”) with the Financial Services Commission of Korea and the Korea Exchange. This is a summary of the Business Report translated into English.
Except where indicated otherwise, financial information contained in this summary have been prepared in accordance with the Korean equivalent of International Financial Reporting Standards (“K-IFRS”), which differ in certain important respects from generally accepted accounting principles in the United States.
All references to “KB Financial Group,” “we,” “us” or the “Company” are to KB Financial Group and, unless the context requires otherwise, its subsidiaries. In addition, all references to “Won” or “KRW” in this document are to the currency of the Republic of Korea.
| 1. | Introduction to the Company |
| 1.1. | Business Purpose |
KB Financial Group is a financial holding company that was established in September 2008. Its main business purpose is to hold shares in companies that are engaged in financial or related services, as well as govern and manage such companies. Its consolidated subsidiaries are primarily engaged in the banking business, as well as the credit card business, the financial investment business, the insurance business and other related businesses.
| 1.2. | History |
| • | September 26, 2008 |
Obtained final approval from the Financial Services Commission to establish a financial holding company
| • | September 29, 2008 |
Establishment of the Company through a comprehensive stock transfer and listing on the New York Stock Exchange
| • | October 10, 2008 |
Listing on the Korea Exchange
| • | October 20, 2008 |
The largest shareholder of the Company changed from the Korean National Pension Service to ING Bank N.V.
| • | October 31, 2008 |
The largest shareholder of the Company changed from ING Bank N.V. to the Korean National Pension Service
| • | May 4, 2009 |
Added Kookmin Bank Cambodia PLC as a second-tier subsidiary
| • | June 22, 2009 |
Added KB Life Insurance Co., Ltd. (“KB Life Insurance”), formerly a second-tier subsidiary, as a first-tier subsidiary
| • | July 1, 2009 |
KB Venture Capital Co., Ltd. changed its name to KB Investment Co., Ltd. (“KB Investment”)
| • | January 22, 2010 |
The largest shareholder of the Company changed from the Korean National Pension Service to ING Bank N.V.
| • | March 2, 2011 |
Added KB Kookmin Card Co., Ltd. (“KB Kookmin Card”) as a first-tier subsidiary
| • | March 14, 2011 |
KB Futures Co., Ltd. was merged into KB Investment & Securities Co., Ltd. (“KB Investment & Securities”)
| • | July 8, 2011 |
The largest shareholder of the Company changed from ING Bank N.V. to the Korean National Pension Service
| • | January 13, 2012 |
Added KB Savings Bank Co., Ltd. (“KB Savings Bank”) as a first-tier subsidiary
| • | May 11, 2012 |
Added KoFC POSCO HANWHA KB Shared Growth No. 2. Private Equity Fund as a second-tier subsidiary
| • | July 2, 2012 |
Added KoFCValue-up Private Equity Fund as a second-tier subsidiary
| • | October 10, 2012 |
Added Kookmin Bank (China) Ltd. as a second-tier subsidiary
| • | June 20, 2013 |
Acquired the remaining shares of KB Life Insurance, which increased the Company’s shareholding to 100%
| • | September 2, 2013 |
Added Yehansoul Savings Bank as a first-tier subsidiary
| • | January 13, 2014 |
Yehansoul Savings Bank was merged into KB Savings Bank
| • | March 20, 2014 |
Added KB Capital Co., Ltd. (“KB Capital”) as a first-tier subsidiary
| • | June 24, 2015 |
Added KB Insurance Co., Ltd. (“KB Insurance”) as anon-consolidated first-tier subsidiary
| • | November 23, 2015 |
Acquired additional shares of KB Insurance, which increased the Company’s shareholding from 19.47% to 33.29%
| • | May 31, 2016 |
Added Hyundai Securities Co., Ltd. (“Hyundai Securities”) as anon-consolidated first-tier subsidiary
| • | June 21, 2016 |
Disposed of LIG Investment & Securities, Co., Ltd., a second-tier subsidiary
| • | June 28, 2016 |
Acquired treasury shares of Hyundai Securities, which increased the Company’s equity ownership in Hyundai Securities from 22.56% to 29.62%
| • | December 1, 2016 |
Added KB Golden Life Care Co., Ltd. as a second-tier subsidiary
| • | December 29, 2016 |
Established KB Private Equity Fund III as a second-tier subsidiary
| • | December 30, 2016 |
Purchased new shares of KB Insurance in a rights offering, which increased the Company’s shareholding in KB Insurance from 33.29% to 39.81%
| • | December 30, 2016 |
Merged KB Investment & Securities with and into Hyundai Securities, with Hyundai Securities as the surviving entity, then changed its name to KB Securities Co., Ltd. (“KB Securities”)
| • | February 8, 2017 |
Added KB KOLAO LEASING Co., Ltd. as a second-tier subsidiary
| • | March 8, 2017 |
Added KB Microfinance Myanmar Co., Ltd. as a second-tier subsidiary
| • | May 19, 2017 |
Acquired additional shares of KB Insurance in a tender offer, which increased the Company’s shareholding in KB Insurance from 39.81% to 94.30%.
| • | May 19, 2017 |
Acquired additional shares of KB Capital in a tender offer, which increased the Company’s shareholding in KB Capital from 52.02% to 79.70%
| • | July 7, 2017 |
Converted KB Insurance and KB Capital into wholly-owned subsidiaries of the Company through comprehensive stock swaps
| • | September 29, 2017 |
Added KB Asset Management Singapore Pte. Ltd. as a second-tier subsidiary (changed from a second-tier subsidiary of KB Securities to a first-tier subsidiary of KB Asset Management Co., Ltd.)
| • | October 9, 2017 |
Added KB Securities Vietnam Joint Stock Company (formerly Maritime Securities Incorporation) as a second-tier subsidiary
| • | October 16, 2017 |
Disposed of Hyundai Savings Bank, Co., Ltd., a second-tier subsidiary
| • | December 22, 2017 |
Disposed of Hyundai Asset Management, Co., Ltd., a second-tier subsidiary
| • | January 17, 2018 |
AddedKB-TS Technology Venture Private Equity Fund as a second-tier subsidiary (equity interests of 16%, 30% and 10% held by KB Securities, Kookmin Bank and KB Capital, respectively)
| • | July 6, 2018 |
Added KB Daehan Specialized Bank Plc. as a second-tier subsidiary
| • | August 21, 2018 |
Added KBAM Shanghai Advisory Services Co., Ltd. as a second-tier subsidiary
| • | December 31, 2018 |
AddedKB-Stonebridge Secondary Private Equity Fund as a second-tier subsidiary
| • | January 9, 2019 |
AddedKB-SPROTT Renewable Private Equity Fund I as a second-tier subsidiary
| • | September 17, 2019 |
AddedKB-SP Private Equity Fund IV as a second-tier subsidiary
| 1.3. | Overview of the Business Group |
| (As of December 31, 2019) | ||||||
Type | Name of Company | Controlling Company | Remarks | |||
Holding Company | KB Financial Group | - | Listed | |||
1st Tier Subsidiaries | Kookmin Bank | KB Financial Group | Not listed | |||
| KB Securities Co., Ltd. | KB Financial Group | Not listed | ||||
| KB Insurance Co., Ltd. | KB Financial Group | Not listed | ||||
| KB Kookmin Card Co., Ltd. | KB Financial Group | Not listed | ||||
| KB Asset Management Co., Ltd. | KB Financial Group | Not listed | ||||
| KB Capital Co., Ltd. | KB Financial Group | Not listed | ||||
| KB Life Insurance Co., Ltd. | KB Financial Group | Not listed | ||||
| KB Real Estate Trust Co., Ltd. | KB Financial Group | Not listed | ||||
| KB Savings Bank Co., Ltd. | KB Financial Group | Not listed | ||||
| KB Investment Co., Ltd. | KB Financial Group | Not listed | ||||
| KB Data Systems Co., Ltd. | KB Financial Group | Not listed | ||||
| KB Credit Information Co., Ltd. | KB Financial Group | Not listed | ||||
2nd Tier Subsidiaries | Kookmin Bank Cambodia PLC | Kookmin Bank | Not listed (Overseas) | |||
| Kookmin Bank (China) Ltd. | Kookmin Bank | Not listed (Overseas) | ||||
| KB Microfinance Myanmar Co., Ltd. | Kookmin Bank | Not listed (Overseas) | ||||
| KBFG Securities America Inc. | KB Securities | Not listed (Overseas) | ||||
| KB Securities Hong Kong Ltd. | KB Securities | Not listed (Overseas) | ||||
| Keystone-Hyundai Securities No. 1 Private Equity Fund | KB Securities | Not listed | ||||
| KB-IGen Private Equity Fund No.1 | KB Securities | Not listed | ||||
| KB Private Equity Fund III | KB Securities | Not listed | ||||
| KB SECURITIES VIETNAM JOINT STOCK COMPANY | KB Securities | Not listed (Overseas) | ||||
| KB-TS Technology Venture Private Equity Fund | KB Securities | Not listed | ||||
| KB-Stonebridge Secondary Private Equity Fund | KB Securities | Not listed | ||||
| KB-SPROTT Renewable Private Equity Fund I | KB Securities | Not listed | ||||
| KB-SP Private Equity Fund IV | KB Securities | Not listed | ||||
| KB Claims Survey & Adjusting Co., Ltd. | KB Insurance | Not listed | ||||
| KB Sonbo CNS | KB Insurance | Not listed | ||||
| Leading Insurance Services, Inc. | KB Insurance | Not listed (Overseas) | ||||
| LIG Insurance (China) Co., Ltd. | KB Insurance | Not listed (Overseas) | ||||
| PT. KB Insurance Indonesia | KB Insurance | Not listed (Overseas) | ||||
| KB Golden Life Care Co., Ltd. | KB Insurance | Not listed | ||||
| KB Daehan Specialized Bank Plc. | KB Kookmin Card | Not listed (Overseas) | ||||
| KB Asset Management Singapore Pte. Ltd. | KB Asset Management | Not listed (Overseas) | ||||
| KBAM Shanghai Advisory Services Co., Ltd. | KB Asset Management | Not listed (Overseas) | ||||
| KB KOLAO LEASING Co., Ltd. | KB Capital | Not listed (Overseas) | ||||
| KoFC POSCO HANWHA KB Shared Growth No. 2. Private Equity Fund | KB Investment | Not listed | ||||
| KoFCValue-up Private Equity Fund | KB Investment | Not listed | ||||
| 1.4. | Capital Structure |
| 1.4.1. | Shares |
Changes in Capital
| (As of December 31, 2019) | (Unit: Won, shares) |
Date | Type | Number of Shares Issued or Cancelled | Par Value | Price | Remarks | |||||||||||
September 29, 2008 | Common Stock | 356,351,693 | 5,000 | 48,444 | Establishment of the Company | |||||||||||
September 2, 2009 | Common Stock | 30,000,000 | 5,000 | 37,250 | Rights offering to existing shareholders; % increase in number of common shares: 8.41865% | |||||||||||
October 19, 2016 | Common Stock | 31,759,844 | 5,000 | 35,474 | Stock Swap; % increase in number of common shares: 8.22045% | |||||||||||
December 12, 2019 | Common Stock | 2,303,617 | 5,000 | — | Share Cancellation(1) | |||||||||||
| (1) | The cancelled shares constituted treasury shares acquired pursuant to a resolution of the board of directors of the Company within the limits of profit available for dividend payment, and as such, there was no change inpaid-in capital. |
Number of Shares
| (As of December 31, 2019) | (Unit: shares) | |||||||||||||
| Type | ||||||||||||||
| Common Stock | Other Stock | Total | Remarks | |||||||||||
Shares Authorized for Issuance | 1,000,000,000 | — | 1,000,000,000 | As specified in the Articles of Incorporation | ||||||||||
Total Shares Issued (A) | 418,111,537 | — | 418,111,537 | — | ||||||||||
Decrease in Number of Shares (B) | 2,303,617 | — | 2,303,617 | — | ||||||||||
1. Capital Reduction | — | — | — | — | ||||||||||
2. Cancellation | 2,303,617 | — | 2,303,617 | Treasury Shares | ||||||||||
3. Redemption | — | — | — | — | ||||||||||
4. Other | — | — | — | — | ||||||||||
Shares Issued as of December 31, 2019(C=A-B) | 415,807,920 | — | 415,807,920 | — | ||||||||||
Treasury Shares(D) | 26,173,585 | — | 26,173,585 | — | ||||||||||
Shares Outstanding (C-D) | 389,634,335 | — | 389,634,335 | — | ||||||||||
Note:The board of directors of the Company resolved to enter into a trust agreement to acquire treasury shares on February 4, 2016, August 2, 2016, November 24, 2017 and November 30, 2018. On December 6, 2019, the board of directors of the Company resolved to cancel 2,303,617 shares of the Company’s common stock held as treasury shares. For more information regarding the above, please refer to the Company’s reports on Form6-K furnished to the Securities and Exchange Commission on each respective date above.
| 1.4.2. | Voting Rights |
| (As of December 31, 2019) | (Unit: shares) | |||||||
Items | Number of Shares | Notes | ||||||
Total number of issued shares | Common shares | 415,807,920 | — | |||||
| Preferred shares | — | — | ||||||
Shares without voting rights | Common shares | 26,173,585 | Treasury shares | |||||
| Preferred shares | — | — | ||||||
Shares for which voting rights cannot be exercised pursuant to the Articles of Incorporation | — | — | — | |||||
Shares for which voting rights are restricted under relevant laws and regulations | — | — | — | |||||
Shares with restored voting rights | — | — | — | |||||
Total shares for which voting rights may be exercised | Common shares | 389,634,335 | — | |||||
| Preferred shares | — | — | ||||||
| 1.5. | Dividends |
(Unit: in millions of Won, except per share amount) | ||||||||||||||
Items | January 1, 2019 to December 31, 2019 | January 1, 2018 to December 31, 2018 | January 1, 2017 to December 31, 2017 | |||||||||||
Par value per share (Won) | 5,000 | 5,000 | 5,000 | |||||||||||
(Consolidated) Net income | 3,311,828 | 3,061,191 | 3,311,438 | |||||||||||
(Consolidated) Earnings per share (Won) | 8,451 | 7,721 | 8,305 | |||||||||||
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Total cash dividends | 861,092 | 759,736 | 766,728 | |||||||||||
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Total stock dividends | — | — | — | |||||||||||
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(Consolidated) Cash dividend payout ratio (%) | 26.0 | 24.8 | 23.2 | |||||||||||
Cash dividend yield (%) | Common Shares | 4.5 | 4.0 | 3.1 | ||||||||||
| — | — | — | — | |||||||||||
Stock dividend yield (%) | Common Shares | — | — | — | ||||||||||
| — | — | — | — | |||||||||||
Cash dividend per share (Won) | Common Shares | 2,210 | 1,920 | 1,920 | ||||||||||
| — | — | — | — | |||||||||||
Stock dividend per share | Common Shares | — | — | — | ||||||||||
| — | — | — | — | |||||||||||
| 2. | Business |
| 2.1. | Results of Operations |
| (Unit: in millions of Won) | ||||||||||||
| For the year ended | For the year ended | For the year ended | ||||||||||
| December 31, 2019 | December 31, 2018 | December 31, 2017 | ||||||||||
Net interest income | 9,196,787 | 8,904,928 | 8,246,614 | |||||||||
Interest income | 14,639,187 | 13,734,569 | 11,919,057 | |||||||||
Interest expense | (5,442,400 | ) | (4,829,641 | ) | (3,672,443 | ) | ||||||
Net fee and commission income | 2,355,004 | 2,243,376 | 2,050,024 | |||||||||
Fee and commission income | 3,879,247 | 3,717,720 | 3,988,250 | |||||||||
Fee and commission expense | (1,524,243 | ) | (1,474,344 | ) | (1,938,226 | ) | ||||||
Net insurance income | 299,512 | 490,116 | 593,710 | |||||||||
Insurance income | 12,317,182 | 11,975,070 | 8,970,992 | |||||||||
Insurance expense | (12,017,670 | ) | (11,484,954 | ) | (8,377,282 | ) | ||||||
Net gains (losses) on financial assets/liabilities at fair value through profit or loss (underK-IFRS 1039) | — | — | 203,724 | |||||||||
Net gains (losses) on financial assets/liabilities at fair value through profit or loss | 643,872 | 351,303 | — | |||||||||
Net other operating expenses | (1,063,324 | ) | (1,130,036 | ) | (901,890 | ) | ||||||
General and administrative expenses | (6,271,017 | ) | (5,918,512 | ) | (5,628,664 | ) | ||||||
Operating profit before provision for credit losses | 5,160,834 | 4,941,175 | 4,563,518 | |||||||||
Provision for credit losses | (670,185 | ) | (673,694 | ) | (548,244 | ) | ||||||
Net operating profit | 4,490,649 | 4,267,481 | 4,015,274 | |||||||||
| Note: | The consolidated financial information for the year ended December 31, 2019 is based onK-IFRS 1116 and the corresponding financial information for the years ended December 31, 2017 and 2018 has not been restated. |
In addition, the consolidated financial information for the years ended December 31, 2018 and 2019 is based onK-IFRS 1109 and 1115 and the corresponding financial information for the year ended December 31, 2017 has not been restated. |
| 2.2. | Sources and Uses of Funds |
2.2.1. Sources of Funds
| (Unit: in millions of Won) | ||||||||||||||||||||||||||||||||||||||
| For the year ended December 31, 2019 | For the year ended December 31, 2018 | For the year ended December 31, 2017 | ||||||||||||||||||||||||||||||||||||
| Average Balance | Interest Rate (%) | Ratio (%) | Average Balance | Interest Rate (%) | Ratio (%) | Average Balance | Interest Rate (%) | Ratio (%) | ||||||||||||||||||||||||||||||
Won Currency | Deposits | 255,533,447 | 1.44 | 52.09 | 238,468,014 | 1.39 | 52.82 | 219,970,681 | 1.20 | 54.26 | ||||||||||||||||||||||||||||
Certificate of deposit | 4,780,665 | 1.95 | 0.97 | 3,044,609 | 1.91 | 0.67 | 2,862,817 | 1.57 | 0.71 | |||||||||||||||||||||||||||||
Borrowings | 11,332,972 | 1.67 | 2.31 | 10,312,988 | 1.59 | 2.28 | 9,306,125 | 1.41 | 2.30 | |||||||||||||||||||||||||||||
Call money | 891,357 | 1.55 | 0.18 | 1,437,887 | 1.53 | 0.32 | 2,165,151 | 1.26 | 0.53 | |||||||||||||||||||||||||||||
Debentures | 47,127,572 | 2.33 | 9.61 | 44,072,110 | 2.29 | 9.76 | 36,393,274 | 2.17 | 8.98 | |||||||||||||||||||||||||||||
Others | 15,203,562 | 1.88 | 3.11 | 16,665,395 | 1.60 | 3.69 | 13,735,978 | 1.41 | 3.38 | |||||||||||||||||||||||||||||
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Subtotal | 334,869,575 | 1.60 | 68.27 | 314,001,003 | 1.54 | 69.54 | 284,434,026 | 1.35 | 70.16 | |||||||||||||||||||||||||||||
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Foreign Currency | Deposits | 13,370,035 | 1.25 | 2.73 | 11,039,672 | 1.15 | 2.45 | 10,156,743 | 0.80 | 2.51 | ||||||||||||||||||||||||||||
Borrowings | 9,668,310 | 2.19 | 1.97 | 8,249,765 | 2.02 | 1.83 | 6,438,408 | 1.17 | 1.59 | |||||||||||||||||||||||||||||
Call money | 527,809 | 2.34 | 0.11 | 751,171 | 2.35 | 0.17 | 1,239,627 | 1.39 | 0.31 | |||||||||||||||||||||||||||||
Debentures | 5,447,017 | 2.62 | 1.11 | 4,076,096 | 3.40 | 0.90 | 3,374,998 | 2.71 | 0.83 | |||||||||||||||||||||||||||||
Others | 463,266 | 1.38 | 0.09 | 297,657 | 0.89 | 0.07 | 321,263 | 0.56 | 0.07 | |||||||||||||||||||||||||||||
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Subtotal | 29,476,437 | 1.83 | 6.01 | 24,414,361 | 1.85 | 5.42 | 21,531,039 | 1.24 | 5.31 | |||||||||||||||||||||||||||||
Others | Total shareholders’ equity | 38,464,863 | — | 7.84 | 35,690,200 | — | 7.90 | 34,785,839 | — | 8.58 | ||||||||||||||||||||||||||||
Allowances | 873,017 | — | 0.18 | 750,262 | — | 0.17 | 829,075 | — | 0.20 | |||||||||||||||||||||||||||||
Others | 86,839,627 | — | 17.70 | 76,643,695 | — | 16.97 | 63,855,888 | — | 15.75 | |||||||||||||||||||||||||||||
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Subtotal | 126,177,507 | — | 25.72 | 113,084,157 | — | 25.04 | 99,470,802 | — | 24.53 | |||||||||||||||||||||||||||||
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Total | 490,523,519 | — | 100.00 | 451,499,521 | — | 100.00 | 405,435,867 | — | 100.00 | |||||||||||||||||||||||||||||
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| Note: | Based onK-IFRS (on a consolidated basis). |
2.2.2. Uses of Funds
| (Unit: in millions of Won) | ||||||||||||||||||||||||||||||||||||||
| For the year ended December 31, 2019 | For the year ended December 31, 2018 | For the year ended December 31, 2017 | ||||||||||||||||||||||||||||||||||||
| Average Balance | Interest Rate (%) | Ratio (%) | Average Balance | Interest Rate (%) | Ratio (%) | Average Balance | Interest Rate (%) | Ratio (%) | ||||||||||||||||||||||||||||||
Won Currency | Due from banks | 5,939,242 | 1.51 | 1.21 | 4,817,024 | 1.43 | 1.07 | 6,757,757 | 1.44 | 1.67 | ||||||||||||||||||||||||||||
| Securities | 103,204,928 | 2.31 | 21.04 | 95,395,973 | 2.84 | 21.13 | 80,406,670 | 1.81 | 19.83 | |||||||||||||||||||||||||||||
| Loans | 287,653,938 | 3.45 | 58.64 | 269,569,916 | 3.43 | 59.71 | 247,117,982 | 3.28 | 60.95 | |||||||||||||||||||||||||||||
| Guarantee payments under payment guarantee | 8,803 | 0.98 | — | 8,206 | 1.87 | — | 17,008 | 0.66 | — | |||||||||||||||||||||||||||||
Call loan | 640,485 | 1.69 | 0.13 | 632,317 | 1.48 | 0.14 | 315,950 | 1.28 | 0.08 | |||||||||||||||||||||||||||||
Private placement corporate bonds | 1,319,460 | 3.61 | 0.27 | 1,452,396 | 3.44 | 0.32 | 1,801,681 | 4.00 | 0.44 | |||||||||||||||||||||||||||||
| Credit cards | 17,945,697 | 7.92 | 3.66 | 16,722,691 | 8.15 | 3.70 | 14,877,741 | 8.32 | 3.67 | |||||||||||||||||||||||||||||
| Others | 3,874,774 | 4.93 | 0.79 | 4,209,878 | 4.08 | 0.93 | 4,123,143 | 3.87 | 1.02 | |||||||||||||||||||||||||||||
| Allowance | (2,406,757 | ) | — | (0.49 | ) | (2,434,872 | ) | — | (0.54 | ) | (2,116,366 | ) | — | (0.52 | ) | |||||||||||||||||||||||
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Subtotal | 418,180,570 | 3.36 | 85.25 | 390,373,529 | 3.49 | 86.46 | 353,301,566 | 3.15 | 87.14 | |||||||||||||||||||||||||||||
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Foreign Currency | Due from banks | 4,782,706 | 1.44 | 0.98 | 3,666,805 | 1.36 | 0.81 | 2,862,165 | 1.06 | 0.71 | ||||||||||||||||||||||||||||
| Securities | 13,323,102 | 4.35 | 2.72 | 12,704,025 | 2.47 | 2.81 | 10,013,637 | 3.19 | 2.47 | |||||||||||||||||||||||||||||
Loans | 11,384,009 | 3.04 | 2.32 | 8,050,597 | 2.96 | 1.78 | 7,136,381 | 2.29 | 1.76 | |||||||||||||||||||||||||||||
Call loan | 2,444,020 | 2.59 | 0.50 | 2,553,987 | 2.38 | 0.57 | 2,909,920 | 1.53 | 0.72 | |||||||||||||||||||||||||||||
Bills bought | 2,944,008 | 2.66 | 0.60 | 4,113,332 | 1.93 | 0.91 | 3,166,307 | 1.51 | 0.78 | |||||||||||||||||||||||||||||
Allowance | (180,649 | ) | — | (0.04 | ) | (262,835 | ) | — | (0.06 | ) | (173,771 | ) | — | (0.04 | ) | |||||||||||||||||||||||
Others | 660,572 | — | 0.13 | 153,277 | — | 0.03 | 72,297 | — | 0.01 | |||||||||||||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| |||||||||||||||||||||
Subtotal | 35,357,768 | 3.28 | 7.21 | 30,979,188 | 2.41 | 6.85 | 25,986,936 | 2.35 | 6.41 | |||||||||||||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| |||||||||||||||||||||
Others | Cash | 1,763,413 | — | 0.36 | 1,769,656 | — | 0.39 | 1,726,448 | — | 0.43 | ||||||||||||||||||||||||||||
Fixed assets held for business | 7,398,134 | — | 1.51 | 5,639,374 | — | 1.25 | 5,826,159 | — | 1.44 | |||||||||||||||||||||||||||||
Others | 27,823,634 | — | 5.67 | 22,737,774 | — | 5.05 | 18,594,758 | — | 4.58 | |||||||||||||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| |||||||||||||||||||||
Subtotal | 36,985,181 | — | 7.54 | 30,146,804 | — | 6.69 | 26,147,365 | — | 6.45 | |||||||||||||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| |||||||||||||||||||||
Total | 490,523,519 | — | 100.00 | 451,499,521 | — | 100.00 | 405,435,867 | — | 100.00 | |||||||||||||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| |||||||||||||||||||||
Note: Based onK-IFRS (on a consolidated basis).
| 2.3. | Other Information to Consider in Making an Investment Decision |
2.3.1. Capital Adequacy
| KB Financial Group | (Unit: in billions of Won) | |||||||||
| As of December 31, 2019 | As of December 31, 2018 | As of December 31, 2017 | ||||||||
Total Capital (A) | 36,995 | 34,476 | 32,402 | |||||||
Risk-weighted assets (B) | 255,549 | 236,099 | 212,777 | |||||||
BIS ratio (A/B) | 14.48% | 14.60% | 15.23% | |||||||
| Note: | Calculated in accordance with Basel III. |
| Kookmin Bank | (Unit: in billions of Won) | |||||||||
As of December 31, 2019 | As of December 31, 2018 | As of December 31, 2017 | ||||||||
Total capital (A) | 29,810 | 27,694 | 25,914 | |||||||
Risk-weighted assets (B) | 188,075 | 178,433 | 161,825 | |||||||
BIS ratio (A/B) | 15.85% | 15.52% | 16.01% | |||||||
| Note: | Calculated in accordance with Basel III. |
| KB Securities | (Unit: in billions of Won) | |||||||||
As of December 31, 2019 | As of December 31, 2018 | As of December 31, 2017 | ||||||||
Net operating capital (A) | 3,170 | 2,969 | 3,211 | |||||||
Total amount at risk (B) | 1,561 | 1,251 | 1,048 | |||||||
Maintenance equity margin (C) | 134 | 134 | 134 | |||||||
Net capital ratio(A-B)/(C) | 1,198.74% | 1,278.45% | 1,609.03% | |||||||
Capital surplus(A-B) | 1,609 | 1,718 | 2,163 | |||||||
| KB Insurance | (Unit: in billions of Won) | |||||||||||
As of December 31, 2019 | As of December 31, 2018 | As of December 31, 2017 | ||||||||||
Available capital (A) | 3,657 | 3,333 | 3,080 | |||||||||
Required capital (B) | 1,941 | 1,782 | 1,618 | |||||||||
RBC ratio (A/B) | 188.5% | 187.1% | 190.3% | |||||||||
| Note: | RBC ratio: Risk-Based Capital ratio. |
2.3.2. Overseas Credit Ratings
| (As of December 31, 2019) | ||||||||
| Rating Company | Moody’s | S&P | ||||||
| Type | Long-term | Short-term | Long-term | Short-term | ||||
| Credit Rating | A1 | P-1 | A | A-1 | ||||
2.3.3. Domestic Credit Ratings
Date of Rating | Type | Credit Rating | Rating Company (Rating Range) | |||
| 6/23/2017 | Debentures | AAA | Korea Ratings (AAA ~ D) / KIS Ratings (AAA ~ D) / NICE Investors Service (AAA ~ D) | |||
| 6/23/2017 | Commercial Paper | A1 | Korea Ratings (A1 ~ D) / KIS Ratings (A1 ~ D) / NICE Investors Service (A1 ~ D) | |||
| 8/28/2017 | Debentures | AAA | Korea Ratings (AAA ~ D) / KIS Ratings (AAA ~ D) / NICE Investors Service (AAA ~ D) | |||
| 1/24/2018 | Debentures | AAA | Korea Ratings (AAA ~ D) / KIS Ratings (AAA ~ D) / NICE Investors Service (AAA ~ D) | |||
| 2/27/2018 | Debentures | AAA | Korea Ratings (AAA ~ D) / KIS Ratings (AAA ~ D) / NICE Investors Service (AAA ~ D) | |||
| 4/5/2018 | Debentures | AAA | Korea Ratings (AAA ~ D) / KIS Ratings (AAA ~ D) / NICE Investors Service (AAA ~ D) | |||
| 6/11/2018 | Debentures | AAA | Korea Ratings (AAA ~ D) / KIS Ratings (AAA ~ D) / NICE Investors Service (AAA ~ D) | |||
| 6/25/2018 | Commercial Paper | A1 | Korea Ratings (A1 ~ D) / KIS Ratings (A1 ~ D) / NICE Investors Service (A1 ~ D) | |||
| 7/24/2018 | Debentures | AAA | Korea Ratings (AAA ~ D) / KIS Ratings (AAA ~ D) / NICE Investors Service (AAA ~ D) | |||
| 10/4/2018 | Debentures | AAA | Korea Ratings (AAA ~ D) / KIS Ratings (AAA ~ D) / NICE Investors Service (AAA ~ D) | |||
| 2/21/2019 | Debentures | AAA | Korea Ratings (AAA ~ D) / KIS Ratings (AAA ~ D) / NICE Investors Service (AAA ~ D) | |||
| 4/8/2019 | Contingent Convertible Bonds | AA- | Korea Ratings (AAA ~ D) / KIS Ratings (AAA ~ D) / NICE Investors Service (AAA ~ D) | |||
| 6/18/2019 | Debentures | AAA | Korea Ratings (AAA ~ D) / KIS Ratings (AAA ~ D) / NICE Investors Service (AAA ~ D) | |||
| 6/26/2019 | Commercial Paper | A1 | Korea Ratings (A1 ~ D) / KIS Ratings (A1 ~ D) / NICE Investors Service (A1 ~ D) | |||
| 10/14/2019 | Debentures | AAA | Korea Ratings (AAA ~ D) / KIS Ratings (AAA ~ D) / NICE Investors Service (AAA ~ D) | |||
| 12/3/2019 | Debentures | AAA | Korea Ratings (AAA ~ D) / KIS Ratings (AAA ~ D) / NICE Investors Service (AAA ~ D) |
2.3.4. Early Retirement Program
To enhance productivity by improving its labor structure, Kookmin Bank implemented a voluntary early retirement program following negotiations with its labor union.
Date of retirement | Number of retired persons | |
| January 20, 2020 | 462 |
2.3.5. Acquisition of Shares of Bank Bukopin of Indonesia and PRASAC Microfinance Institution Limited of Cambodia
Kookmin Bank entered into a share subscription agreement with Bank Bukopin of Indonesia on June 26, 2018 and acquired its new shares on July 27, 2018.
| (Unit: in millions of Won) | ||
Ownership | Acquisition amount | |
| 22% | 116,422(1)(2) (IDR 1,460,910,000,000) | |
| (1) | The acquisition amount in IDR is converted to Won at the exchange rate on July 27, 2018, the acquisition date. |
| (2) | Includes consulting fees of Won 3,348 million paid in connection with the acquisition. |
On January 6, 2020, Kookmin Bank entered into a shareholders’ agreement with the shareholders of PRASAC Microfinance Institution Limited (“PRASAC”), a provider of microfinance and deposit-taking services in Cambodia, to acquire 70% of PRASAC’s total number of shares issued for USD 603 million. The consummation of this acquisition is subject to approval from the financial authorities in Korea and abroad. A put option may be exercised by PRASAC’s current shareholders to sell the remaining 30% of PRASAC’s shares to Kookmin Bank. The exercise price of such put option will be determined based on the adjusted book value of PRASAC as of December 31, 2021 as reflected in the audit report of PRASAC’s financial statements as of and for the year ended December 31, 2021, and such put option may be exercised during the six months following the date of such audit report.
| 3. | Financial Information |
| 3.1. | Consolidated Financial Information |
3.1.1. Consolidated Statements of Financial Position
| (Unit: in millions of Won) | ||||||||||||
| As of December 31, 2019 | As of December 31, 2018 | As of December 31, 2017 | ||||||||||
Cash and due from financial institutions | 20,837,878 | 20,274,490 | 19,817,825 | |||||||||
Financial assets at fair value through profit or loss (underK-IFRS 1039) | — | — | 32,227,345 | |||||||||
Financial assets at fair value through profit or loss | 53,549,086 | 50,987,847 | — | |||||||||
Derivative financial assets | 3,190,673 | 2,025,962 | 3,310,166 | |||||||||
Loans at amortized cost | 339,684,059 | 319,201,603 | 290,122,838 | |||||||||
Financial investments | 71,782,606 | 61,665,094 | 66,608,243 | |||||||||
Investments in associates and joint ventures | 598,240 | 504,932 | 335,070 | |||||||||
Property and equipment | 5,067,377 | 4,272,127 | 4,201,697 | |||||||||
Investment property | 2,827,988 | 2,119,811 | 848,481 | |||||||||
Intangible assets | 2,737,813 | 2,755,783 | 2,943,060 | |||||||||
Net defined benefit assets | 946 | — | 894 | |||||||||
Current income tax assets | 19,095 | 10,004 | 6,324 | |||||||||
Deferred income tax assets | 3,597 | 4,158 | 3,991 | |||||||||
Assets held for sale | 23,151 | 16,952 | 155,506 | |||||||||
Other assets | 18,215,608 | 15,749,535 | 16,204,169 | |||||||||
|
|
|
|
|
| |||||||
Total assets | 518,538,117 | 479,588,298 | 436,785,609 | |||||||||
|
|
|
|
|
| |||||||
Financial liabilities at fair value through profit or loss (underK-IFRS 1039) | — | — | 12,023,058 | |||||||||
Financial liabilities at fair value through profit or loss | 15,368,153 | 15,326,859 | — | |||||||||
Derivative financial liabilities | 3,007,341 | 2,901,247 | 3,142,765 | |||||||||
Deposits | 305,592,771 | 276,770,449 | 255,800,048 | |||||||||
Debts | 37,818,860 | 33,004,834 | 28,820,928 | |||||||||
Debentures | 50,935,583 | 53,278,697 | 44,992,724 | |||||||||
Provisions | 527,929 | 525,859 | 568,033 | |||||||||
Net defined benefit liabilities | 253,989 | 262,213 | 154,702 | |||||||||
Current income tax liabilities | 432,431 | 698,634 | 433,870 | |||||||||
Deferred income tax liabilities | 777,793 | 492,534 | 533,069 | |||||||||
Insurance contract liabilities | 34,966,683 | 33,412,949 | 31,801,275 | |||||||||
Other liabilities | 29,737,259 | 27,200,996 | 24,470,308 | |||||||||
|
|
|
|
|
| |||||||
Total liabilities | 479,418,792 | 443,875,271 | 402,740,780 | |||||||||
Equity attributable to shareholders of the parent company | 38,533,918 | 35,703,916 | 34,038,685 | |||||||||
Share capital | 2,090,558 | 2,090,558 | 2,090,558 | |||||||||
Hybrid financial instrument | 399,205 | — | — | |||||||||
Capital surplus | 17,122,777 | 17,121,660 | 17,122,228 | |||||||||
Accumulated other comprehensive income | 348,021 | 177,806 | 537,668 | |||||||||
Retained earnings | 19,709,545 | 17,282,441 | 15,044,204 | |||||||||
Treasury shares | (1,136,188 | ) | (968,549 | ) | (755,973 | ) | ||||||
Non-controlling interests | 585,407 | 9,111 | 6,144 | |||||||||
|
|
|
|
|
| |||||||
Total equity | 39,119,325 | 35,713,027 | 34,044,829 | |||||||||
|
|
|
|
|
| |||||||
Total liabilities and equity | 518,538,117 | 479,588,298 | 436,785,609 | |||||||||
|
|
|
|
|
| |||||||
| Note: | The consolidated financial information for the year ended December 31, 2019 is based onK-IFRS 1116 and the corresponding financial information for the years ended December 31, 2017 and 2018 has not been restated. In addition, the consolidated financial information for the years ended December 31, 2018 and 2019 is based onK-IFRS 1109 and 1115 and the corresponding financial information for the year ended December 31, 2017 has not been restated. |
3.1.2. Consolidated Statements of Comprehensive Income
| (Unit: in millions of Won, except per share amounts) | ||||||||||||
| For the year ended December 31, 2019 | For the year ended December 31, 2018 | For the year ended December 31, 2017 | ||||||||||
Net interest income | 9,196,787 | 8,904,928 | 8,246,614 | |||||||||
Net fee and commission income | 2,355,004 | 2,243,376 | 2,050,024 | |||||||||
Net insurance income | 299,512 | 490,116 | 593,710 | |||||||||
Net gains (losses) on financial assets/liabilities at fair value through profit or loss (underK-IFRS 1039) | — | — | 203,724 | |||||||||
Net gains (losses) on financial assets/liabilities at fair value through profit or loss | 643,872 | 351,303 | — | |||||||||
Net other operating expenses | (1,063,324 | ) | (1,130,036 | ) | (901,890 | ) | ||||||
General and administrative expenses | (6,271,017 | ) | (5,918,512 | ) | (5,628,664 | ) | ||||||
Operating profit before provision for credit losses | 5,160,834 | 4,941,175 | 4,563,518 | |||||||||
Provision for credit losses | (670,185 | ) | (673,694 | ) | (548,244 | ) | ||||||
Net operating income | 4,490,649 | 4,267,481 | 4,015,274 | |||||||||
Netnon-operating income (loss) | 43,337 | 34,051 | 123,150 | |||||||||
Profit before income tax | 4,533,986 | 4,301,532 | 4,138,424 | |||||||||
Income tax expense | (1,220,787 | ) | (1,239,586 | ) | (794,963 | ) | ||||||
Profit for the period | 3,313,199 | 3,061,946 | 3,343,461 | |||||||||
Other comprehensive income (loss) for the period, net of tax | 152,023 | (10,482 | ) | 136,226 | ||||||||
|
|
|
|
|
| |||||||
Total comprehensive income for the period | 3,465,222 | 3,051,464 | 3,479,687 | |||||||||
|
|
|
|
|
| |||||||
Profit attributable to: | 3,313,199 | 3,061,946 | 3,343,461 | |||||||||
Shareholders of the parent company | 3,311,828 | 3,061,191 | 3,311,438 | |||||||||
Non-controlling interests | 1,371 | 755 | 32,023 | |||||||||
|
|
|
|
|
| |||||||
Total comprehensive income for the period attributable to: | 3,465,222 | 3,051,464 | 3,479,687 | |||||||||
|
|
|
|
|
| |||||||
Shareholders of the parent company | 3,463,567 | 3,050,805 | 3,445,285 | |||||||||
Non-controlling interests | 1,655 | 659 | 34,402 | |||||||||
Earnings per share | ||||||||||||
Basic earnings per share (Won) | 8,451 | 7,721 | 8,305 | |||||||||
Diluted earnings per share (Won) | 8,389 | 7,676 | 8,257 | |||||||||
| Note: | The consolidated financial information for the year ended December 31, 2019 is based onK-IFRS 1116 and the corresponding financial information for the years ended December 31, 2017 and 2018 has not been restated. In addition, the consolidated financial information for the years ended December 31, 2018 and 2019 is based onK-IFRS 1109 and 1115 and the corresponding financial information for the year ended December 31, 2017 has not been restated. |
| 3.2. | Separate Financial Information |
3.2.1. Separate Statements of Financial Position
| (Unit: in millions of Won) | ||||||||||||
| As of December 31, 2019 | As of December 31, 2018 | As of December 31, 2017 | ||||||||||
Cash and due from financial institutions | 18,537 | 344,302 | 245,400 | |||||||||
Financial assets at fair value through profit or loss (underK-IFRS 1039) | — | — | 284,485 | |||||||||
Financial assets at fair value through profit or loss | 413,909 | 289,179 | — | |||||||||
Loans at amortized cost | 120,000 | 50,000 | 10,000 | |||||||||
Investments in subsidiaries | 24,162,116 | 24,062,116 | 24,062,116 | |||||||||
Property and equipment | 4,170 | 2,185 | 697 | |||||||||
Intangible assets | 11,092 | 9,646 | 8,864 | |||||||||
Net defined benefit assets | — | — | 201 | |||||||||
Deferred income tax assets | 7,526 | 8,184 | 10,282 | |||||||||
Other assets | 609,286 | 857,462 | 480,789 | |||||||||
|
|
|
|
|
| |||||||
Total assets | 25,346,636 | 25,623,074 | 25,102,834 | |||||||||
|
|
|
|
|
| |||||||
Debts | — | 300,000 | 300,000 | |||||||||
Debentures | 5,543,446 | 5,373,266 | 5,162,600 | |||||||||
Net defined benefit liabilities | 437 | 183 | — | |||||||||
Current income tax liabilities | 417,414 | 691,909 | 308,854 | |||||||||
Other liabilities | 203,440 | 186,481 | 204,835 | |||||||||
|
|
|
|
|
| |||||||
Total liabilities | 6,164,737 | 6,551,839 | 5,976,289 | |||||||||
|
|
|
|
|
| |||||||
Share capital | 2,090,558 | 2,090,558 | 2,090,558 | |||||||||
Hybrid financial instrument | 399,085 | — | — | |||||||||
Capital surplus | 14,742,814 | 14,742,814 | 14,742,814 | |||||||||
Accumulated other comprehensive loss | (7,664 | ) | (7,144 | ) | (5,233 | ) | ||||||
Retained earnings | 3,093,294 | 3,213,556 | 3,054,379 | |||||||||
Treasury Shares | (1,136,188 | ) | (968,549 | ) | (755,973 | ) | ||||||
|
|
|
|
|
| |||||||
Total equity | 19,181,899 | 19,071,235 | 19,126,545 | |||||||||
|
|
|
|
|
| |||||||
Total liabilities and equity | 25,346,636 | 25,623,074 | 25,102,834 | |||||||||
|
|
|
|
|
| |||||||
| Note: | The separate financial information for the year ended December 31, 2019 is based onK-IFRS 1116 and the corresponding financial information for the years ended December 31, 2017 and 2018 has not been restated. In addition, the separate financial information for the years ended December 31, 2018 and 2019 is based onK-IFRS 1109 and 1115 and the corresponding financial information for the year ended December 31, 2017 has not been restated. |
3.2.2. Separate Statements of Comprehensive Income
(Unit: in millions of Won, except per share amounts) | ||||||||||||
| For the year ended December 31, 2019 | For the year ended December 31, 2018 | For the year ended December 31, 2017 | ||||||||||
Net interest expense | (118,045 | ) | (115,835 | ) | (97,218 | ) | ||||||
Net fee and commission expense | (6,283 | ) | (5,208 | ) | (7,808 | ) | ||||||
Net gains on financial assets at fair value through profit or loss (underK-IFRS 1039) | — | — | 745 | |||||||||
Net gains on financial assets at fair value through profit or loss | 15,947 | 18,319 | — | |||||||||
Net other operating income | 926,934 | 1,089,556 | 709,544 | |||||||||
General and administrative expenses | (71,171 | ) | (57,845 | ) | (57,485 | ) | ||||||
Operating profit before provision for credit losses | 747,382 | 928,987 | 547,778 | |||||||||
Provision for credit losses | — | — | — | |||||||||
Operating profit | 747,382 | 928,987 | 547,778 | |||||||||
Netnon-operating expense | (541 | ) | (259 | ) | 125 | |||||||
Profit before income tax | 746,841 | 928,728 | 547,903 | |||||||||
Income tax benefit (expense) | (854 | ) | (2,823 | ) | 5,522 | |||||||
Profit for the period | 745,987 | 925,905 | 553,425 | |||||||||
Other comprehensive income (loss) for the period, net of tax | (520 | ) | (1,911 | ) | (491 | ) | ||||||
|
|
|
|
|
| |||||||
Total comprehensive income for the period | 745,467 | 923,994 | 552,934 | |||||||||
|
|
|
|
|
| |||||||
Earnings per share | ||||||||||||
Basic earnings per share (Won) | 1,891 | 2,335 | 1,388 | |||||||||
Diluted earnings per share (Won) | 1,877 | 2,322 | 1,380 | |||||||||
| Note: | The separate financial information for the year ended December 31, 2019 is based onK-IFRS 1116 and the corresponding financial information for the years ended December 31, 2017 and 2018 has not been restated. In addition, the separate financial information for the years ended December 31, 2018 and 2019 is based onK-IFRS 1109 and 1115 and the corresponding financial information for the year ended December 31, 2017 has not been restated. |
| 3.3. | Other Selected Financial Data |
3.3.1.Won-denominated Liquidity Ratio
| (Unit: in millions of Won) | ||||||||||||
Category | As of December 31, 2019 | As of December 31, 2018 | As of December 31, 2017 | |||||||||
Current assets in Won (A) | 142,683 | 30,150 | 47,253 | |||||||||
Current liabilities in Won (B) | 110,398 | 9,300 | 6,792 | |||||||||
Liquidity ratio (A/B) | 129.24 | % | 324.20 | % | 695.72 | % | ||||||
| Note: | 1) Based onK-IFRS (on a separate basis). |
2) Calculated based onWon-denominated assets and liabilities due within one month.
3.3.2. Profitability Ratios
| (Unit: %) | ||||||||
Category | For the year ended December 31, 2019 | For the year ended | For the year ended | |||||
Net income as a percentage of average total assets (ROA) | 0.66 | 0.66 | 0.82 | |||||
Net income as a percentage of average shareholders’ equity (ROE) | 8.93 | 8.82 | 10.18 | |||||
| Note: | Based onK-IFRS (on a consolidated basis). |
3.3.3. 20 Largest Exposures of Kookmin Bank by Borrower (As of December 31, 2019)
| (Unit: in billions of Won) | ||||
Company | Credit extended | |||
Samsung Electronics Co., Ltd. | 1,315 | |||
Hyundai Motor Company | 1,201 | |||
Korea Securities Finance Corp. | 1,010 | |||
Hyundai Steel Co., Ltd. | 976 | |||
NH Investment & Securities Co., Ltd | 773 | |||
LG Display Co., Ltd. | 760 | |||
Hyundai Capital Services, Inc. | 719 | |||
LG Electronics Inc. | 692 | |||
S-OIL Corporation | 668 | |||
GS Caltex Corporation | 631 | |||
Hyundai Heavy Industries Co., Ltd. | 501 | |||
SK Energy Co., Ltd. | 479 | |||
KT Corporation | 456 | |||
Samsung Heavy Industries Co., Ltd. | 448 | |||
CJ Cheiljedang Corp. | 442 | |||
LS-Nikko Copper Inc | 441 | |||
SK Holdings | 425 | |||
KB Kookmin Card Co., Ltd. | 421 | |||
Kia Motors Corporation | 394 | |||
Hanwha Solutions/Chemical Corporation | 365 | |||
|
| |||
Total | 13,117 | |||
|
| |||
3.3.4. 10 Largest Exposures of Kookmin Bank by Chaebol Group(As of December 31, 2019)
| (Unit: in billions of Won) | ||||
Group | Credit extended | |||
Hyundai Motor | 4,768 | |||
Samsung | 3,380 | |||
SK | 2,472 | |||
Lotte | 2,192 | |||
LG | 2,168 | |||
Hanwha | 1,696 | |||
GS | 1,073 | |||
CJ | 829 | |||
Shinsegae | 804 | |||
LS | 789 | |||
|
| |||
Total | 20,171 | |||
|
| |||
3.3.5. Kookmin Bank’s Loan Concentration by Industry(As of December 31, 2019)
| (Unit: in billions of Won, %) | ||||||||
Industry | Total Credit | Percentage of Total Credit | ||||||
Manufacturing | 45,012 | 32.0 | ||||||
Real estate | 31,054 | 22.1 | ||||||
Retail and wholesale | 19,997 | 14.2 | ||||||
Hotel, lodging and food services | 8,926 | 6.3 | ||||||
Construction | 3,194 | 2.3 | ||||||
Financial institutions | 2,891 | 2.1 | ||||||
Others | 29,520 | 21.0 | ||||||
|
|
|
| |||||
Total | 140,594 | 100.0 | ||||||
|
|
|
| |||||
3.3.6. Top 20Non-Performing Loans of Kookmin Bank(As of December 31, 2019)
| (Unit: in billions of Won) | ||||||||||
Borrower | Industry | Total Credit | Allowance for Loan Losses | |||||||
Borrower A | Construction | 59 | 55 | |||||||
Borrower B | Shipbuilding | 51 | 16 | |||||||
Borrower C | Construction | 40 | 40 | |||||||
Borrower D | Shipping | 24 | 23 | |||||||
Borrower E | Construction | 21 | 21 | |||||||
Borrower F | Retail and wholesale | 16 | 9 | |||||||
Borrower G | Manufacturing | 13 | 6 | |||||||
Borrower H | Retail and wholesale | 10 | 8 | |||||||
Borrower I | Manufacturing | 10 | 9 | |||||||
Borrower J | Shipbuilding | 9 | 2 | |||||||
Borrower K | Manufacturing | 9 | 3 | |||||||
Borrower L | Manufacturing | 9 | 1 | |||||||
Borrower M | Manufacturing | 6 | 5 | |||||||
Borrower N | Hotel, lodging and food services | 6 | 1 | |||||||
Borrower O | Shipping | 6 | 5 | |||||||
Borrower P | Manufacturing | 6 | 2 | |||||||
Borrower Q | Manufacturing | 6 | 4 | |||||||
Borrower R | Construction | 5 | 5 | |||||||
Borrower S | Health and social services | 5 | 1 | |||||||
Borrower T | Manufacturing | 5 | 2 | |||||||
|
|
|
| |||||||
Total | 316 | 218 | ||||||||
|
|
|
| |||||||
| 3.4. | Other Financial Information |
See the Company’s Form6-K furnished to the Securities and Exchange Commission on March 6, 2020 (available on www.sec.gov), which contains the Company’s audited consolidated and separate financial statements as of and for the years ended December 31, 2019 and 2018 and related notes, which have been prepared in accordance withK-IFRS. The Company’s audited consolidated and separate financial statements are also available on its website,www.kbfg.com.
| 4. | Independent Public Accountants |
| 4.1. | Audit / Review Services |
| (Unit: in millions of Won) | ||||||||||||
Period | Auditor | Activity | Compensation(1) | Accrued Time (hours) | ||||||||
January 1 to December 31, 2019 | Samil PricewaterhouseCoopers | Quarterly / first half and annual review & audit, review of internal accounting management system (including audit of internal control over financial reporting) | 1,081 | 10,832 | ||||||||
January 1 to December 31, 2018 | Samil PricewaterhouseCoopers | Quarterly / first half and annual review & audit, review of internal accounting management system (including audit of internal control over financial reporting) | 949 | 9,820 | ||||||||
January 1 to December 31, 2017 | Samil PricewaterhouseCoopers | Quarterly / first half and annual review & audit, review of internal accounting management system (including audit of internal control over financial reporting) | 856 | 11,080 | ||||||||
| (1) | On an annual basis and excluding value-added taxes. |
| 4.2. | Public Company Accounting Oversight Board (“PCAOB”) Audit Services |
| (Unit: in millions of Won) | ||||||||||
Period | Auditor | Activity | Service Period | Compensation(1) | ||||||
January 1 to December 31, 2019 | Samil PricewaterhouseCoopers | PCAOB audit of consolidated financial statements and internal control over financial reporting | May 1, 2019 to April 30, 2020 | 573 | ||||||
January 1 to December 31, 2018 | Samil PricewaterhouseCoopers | PCAOB audit of consolidated financial statements and internal control over financial reporting | May 1, 2018 to April 30, 2019 | 571 | ||||||
January 1 to December 31, 2017 | Samil PricewaterhouseCoopers | PCAOB audit of consolidated financial statements and internal control over financial reporting | May 1, 2017 to April 30, 2018 | 540 | ||||||
| (1) | On an annual basis and excluding value-added taxes. |
| 4.3. | Change in Auditor |
Pursuant to the Act on External Audit of Stock Companies and the related regulations thereunder, the Securities and Futures Commission of the Financial Services Commission designated KPMG Samjong Accounting Corp. as the Company’s new external auditor for the fiscal years ending December 31, 2020, 2021 and 2022. As such, starting with the fiscal year ending December 31, 2020, the external auditor for the Company and its subsidiaries will be changed from Samil PricewaterhouseCoopers to KPMG Samjong Accounting Corp.
| 5. | Corporate Governance and Affiliated Companies |
| 5.1. | Board of Directors & Committees under the Board |
As of December 31, 2019, our board of directors consisted of nine directors, comprising one executive director, onenon-standing director and sevennon-executive directors. The following committees currently serve under our board of directors:
| • | Risk Management Committee; |
| • | Evaluation & Compensation Committee; |
| • | Non-Executive Director Nominating Committee; |
| • | Audit Committee Members Nominating Committee; |
| • | CEO Nominating Committee; |
| • | Audit Committee; and |
| • | Subsidiaries’ CEO Director Nominating Committee |
For the list of our directors, see 6. Directors, Senior Management and Employees — 6.1. Executive Directors,— 6.2. Non-standing Directors and — 6.3. Non-executive Directors below.
| 5.2. | Audit Committee |
The Audit Committee oversees our financial reporting and approves the appointment of our independent auditors and internal compliance officers. The committee also reviews our financial information, auditor’s examinations, key financial statement issues, the plans and evaluation of internal controls and the administration of our financial affairs by the board of directors. In connection with the general meetings of shareholders, the committee examines the agenda for, and financial statements and other reports to be submitted by, the board of directors to each general meeting of shareholders. The committee holds regular meetings every quarter and on anas-needed basis. The following table shows a list of audit committee requirements under Articles 415 and 542 of the Commercial Act and how we fulfill each requirement as of December 31, 2019.
The Commercial Act Requirements | KB Financial Group | |
The Audit Committee must consist of three or more directors. | We have four Audit Committee members. | |
At least two-thirds of the Audit Committee Members must benon-executive directors. | All four Audit Committee members, including the chairman of the committee, arenon-executive directors. | |
The chairman of the Audit Committee must be anon-executive director. | ||
At least one Audit Committee member must be an accounting or financial expert. | Two Audit Committee members (Suk Ho Sonu and Kyung Ho Kim) are accounting or financial experts. | |
| 5.3. | Compensation to Directors |
5.3.1. Total Amount of Compensation Approved at the Annual General Meeting of Shareholders
| (Unit: in millions of Won) | ||||||||||
| Total number of persons(1) | Total compensation approved at shareholders’ meeting(2) | Notes | ||||||||
Registered Directors (Non-executive directors) | 9 (7) | 2,500 | — | |||||||
| (1) | Represents the total number of applicable persons as of December 31, 2019. |
| (2) | Represents the aggregate amount for all directors (includingnon-executive directors). Excludes compensation in the form of long-term performance-based stock grants. |
5.3.2. Total Amount of Compensation Paid
| (For the year ended December 31, 2019) | (Unit: in millions of Won) | |||||
Total number of persons(1) | Total payment(2)(3) | Average payment per person(4) | Notes | |||
9 | 2,223 | 247 | — | |||
| (1) | Represents the total number of applicable persons as of December 31, 2019. |
| (2) | Represents the total amount paid (rounded to the nearest million) for the year ended December 31, 2019. |
| (3) | Payment subject to the Company’s internal policies on compensation to directors. |
| (4) | Represents (i) the total amount paid (rounded to the nearest million) for the year ended December 31, 2019, divided by (ii) the annualized number of applicable persons for the applicable reporting period. |
*Jongsoo Han retired from his post as anon-executive director on March 25, 2019.
*Kyung Ho Kim was newly appointed as anon-executive director on March 27, 2019.
5.3.3. Compensation Breakdown
| (As of December 31, 2019) | (Unit: in millions of Won) | |||||||||||||||
| Total number of persons(1) | Total payment (2)(3) | Average payment per person(4) | Notes | |||||||||||||
Registered Directors(excludingnon-executive directors and Audit Committee members) | 2 | 1,595 | 797 | — | ||||||||||||
Non-executive Directors (excluding Audit Committee members) | 3 | 262 | 87 | — | ||||||||||||
Audit Committee members | 4 | 366 | 91 | — | ||||||||||||
Internal Auditor | — | — | — | — | ||||||||||||
| (1) | Represents the total number of applicable persons as of December 31, 2019. |
| (2) | Represents the total amount paid (rounded to the nearest million) for the year ended December 31, 2019. |
| (3) | Payment subject to the Company’s internal policies on compensation to directors. |
| (4) | Represents (i) the total amount paid (rounded to the nearest million) for the year ended December 31, 2019, divided by (ii) the annualized number of applicable persons for the applicable reporting period. |
| 5.4. | Highest-Paid Individuals |
5.4.1 Compensation exceeding Won 500 million – Individual basis
| (As of December 31, 2019) | (Unit: in millions of Won) | |||||||
Name | Position | Total Amount | Deferred Compensation(1) | |||||
| Jong Kyoo Yoon | Chairman & CEO | 1,595 | - Deferred short-term performance-based payment, the amount of which corresponds to 3,766 shares remaining under, and pursuant to, a performance evaluation in 2018. - Deferred long-term performance-based payment, the amount of which corresponds to 12,018 shares remaining under, and pursuant to, a performance evaluation over a three-year period from November 21, 2014 to November 20, 2017. - Long-term performance-based payment, the amount of which corresponds to a maximum of 46,890 shares (15,630 shares per year) pursuant to a performance evaluation over a three-year period from November 21, 2017 to November 20, 2020. | |||||
| Chang Kwon Lee | Deputy President | 576 | - Deferred short- and long-term performance-based payment, the amount of which corresponds to 3,895 shares remaining under, and pursuant to, a performance evaluation from 2017 to 2018. | |||||
Kyung Yup Cho | Deputy President | 557 | - Deferred short- and long-term performance-based payment, the amount of which corresponds to 11,770 shares remaining under, and pursuant to, a performance evaluation in 2015 and from 2017 to 2018. | |||||
Young Hyuk Jo | Deputy President | 504 | - Deferred short- and long-term performance-based payment, the amount of which corresponds to 3,268 shares remaining under, and pursuant to, a performance evaluation from 2017 to 2018. | |||||
| (1) | The actual payment amount will be finalized based on the market value of our shares at the time of payment. |
5.4.2 Calculation criteria and method of compensation
| (Unit: in millions of Won) | ||||||||||
Name | Compensation | Classification | Total Compensation | Calculation Criteria and Method | ||||||
| Jong Kyoo Yoon | Earned income | Salary | 800 | A monthly salary was paid in even installments each month in accordance with the amount of annual salary determined by a resolution of the Evaluation & Compensation Committee within the limit of the total amount of compensation approved at the shareholders’ meeting. (This amount includes allowances for business expenses of Won 350 million.) | ||||||
Bonus | 795 | The bonus paid in 2019 was Won 795 million, of which (i) Won 267 million was paid as short-term performance-based compensation pursuant to a performance evaluation for 2018 (based on the resolution of the Evaluation & Compensation Committee), consisting of Won 177 million paid as an upfront lump sum payment and Won 90 million (representing 1,883 shares) paid as the first installment of deferred payments and (ii) Won 528 million (representing 12,018 shares) was paid as the second installment of long-term performance-based compensation pursuant to a performance evaluation over a three-year period from November 21, 2014 to November 20, 2017 (based on the resolution of the Evaluation & Compensation Committee).
The short-term performance evaluation index for 2018 comprised financial results (e.g., ROE, total operating income, RAROC, CIR, real NPL ratio, Tier 1 ratio, net increase in the number of cross-selling customers among subsidiaries) and results relating to strategic initiatives (e.g., securing structural competitive advantage by facilitating innovation of the Company’s business model and enhancing customer-oriented services and processes, strengthening the overall position of the Company, implementing the“One-Firm KB” policy). The amount of the short-term incentive payment is determined by the Evaluation & Compensation Committee based on the aggregate score of the index items above and is within the range of0%-100% of the base salary. | ||||||||
With respect to financial results, although the Company’s net profit for 2018 decreased 7.6% YoY due to, among others, increased early retirement program costs and decreased profits in the insurance segment, improvements in asset quality (improvement in real NPL ratio from 1.19% in 2017 to 1.01% in 2018) and cost efficiency (improvement in CIR from 55.2% in 2017 to 54.5% in 2018), as well as a strengthening of risk management abilities demonstrated by loan growth in prime assets (an increase in loan balance from Won 235 trillion in 2017 to Won 257 trillion in 2018) were considered, among others, to be major achievements reflected in the performance evaluation.
With respect tonon-financial results, the major achievements considered included securing a competitive advantage in the Company’s core businesses through an increase in market shares, broadening the Company’s overall customer base and expanding into global markets, as well as strengthening the Company’s overall capabilities and reinforcing the“One-Firm KB” policy through key improvements in areas of operational management, risk management and compliance. | ||||||||||
| Stock options | — | Not applicable | ||||||||
| Other earned income | — | Not applicable | ||||||||
| Retirement income | — | Not applicable | ||||||||
| Other income | — | Not applicable | ||||||||
| Chang Kwon Lee | Earned income | Salary | 220 | A monthly salary was paid in even installments each month in accordance with the amount of annual salary determined pursuant to internal policy regarding executive officers based on position and responsibilities. | ||||||
Bonus | 347 | The bonus paid in 2019 was Won 347 million, of which (i) Won 326 million was paid asshort- and long-term performance-based compensation pursuant to a performance evaluation for 2018 and over the period from 2017 to 2018 (based on the resolution of the Evaluation & Compensation Committee), consisting of Won 244 million paid as an upfront lump sum payment and Won 82 million (representing 1,726 shares) paid as the first installment of deferred payments and (ii) Won 21 million (representing 439 shares) was paid as the second installment of short-term performance-based compensation pursuant to a performance evaluation for 2017 (based on the resolution of the Evaluation & Compensation Committee).
The short-term performance evaluation index for 2018 included financial results of the Company’s financial performance as well as non-financial results relating to various responsibilities that pertain to the executive officer’s position of a chief strategy officer. The amount of the short-term incentive payment is determined by the Evaluation & Compensation Committee based on the aggregate score of the index items above and is within the range of0%-120% of the base salary.
With respect to financial results, improvements in asset quality and cost efficiency, and loan growth in prime assets were considered to be major achievements. With respect tonon-financial results, major achievements included strengthening the competitiveness of the Company’s core businesses for increased market shares and establishing an operational management system for reinforcing the“One-Firm KB” policy.
The long-term performance evaluation index for the period from 2017 to 2018 included relative total shareholder return, the Company’s financial results and results relating to the executive officer’s roles and responsibilities. The long-term performance-based compensation is calculated within the range of 0%-100% of the base salary.
With respect to the relative total shareholder return, the Company’s stock performance, which outperformed the industry average during the period from January 1, 2017 to December 31, 2018, was considered. With respect to the Company’s financial results and results relating to the executive officer’s roles and responsibilities, the annual evaluation results over the two-year period from 2017 to 2018 were considered. |
| Stock options | — | Not applicable | ||||||||
| Other earned income | 9 | Welfare benefits | ||||||||
| Retirement income | — | Not applicable | ||||||||
| Other income | — | Not applicable | ||||||||
Kyung Yup Cho | Earned income | Salary | 250 | A monthly salary was paid in even installments each month in accordance with the amount of annual salary determined pursuant to internal policy regarding executive officers based on position and responsibilities. | ||||||
Bonus | 281 | The bonus paid in 2019 was Won 281 million, of which (i) Won 126 million was paid as short-term performance-based compensation pursuant to a performance evaluation for 2018 (based on the resolution of the Evaluation & Compensation Committee), consisting of Won 94 million paid as an upfront lump sum payment and Won 32 million (representing 666 shares) paid as the first installment of deferred payments and (ii) Won 155 million (representing 3,255 shares) was paid as deferredshort- and long-term performance-based compensation pursuant to a performance evaluation over the period from 2016 to 2017 (based on the resolution of the Evaluation & Compensation Committee).
The short-term performance evaluation index for 2018 included the financial results of the Company’s financial performance as well as non-financial results relating to various responsibilities that pertain to the executive officer’s position as the deputy president of KB Research. The amount of the short-term incentive payment is determined by the Evaluation & Compensation Committee based on the aggregate score of the index items above and is within the range of0%-120% of the base salary.
With respect to financial results, improvements in asset quality and cost efficiency, and loan growth in prime assets were considered to be major achievements. With respect tonon-financial results, major achievements included contributing to the Company’s sustainable management initiatives through conducting relevant research. | ||||||||
| Stock options | — | Not applicable | ||||||
| Other earned income | 26 | Welfare benefits | ||||||
Retirement income | — | Not applicable | ||||||
Other income | — | Not applicable | ||||||
Young Hyuk Jo | Earned income | Salary | 250 | A monthly salary was paid in even installments each month in accordance with the amount of annual salary determined pursuant to internal policy regarding executive officers based on position and responsibilities. | ||||
Bonus | 245 | The bonus paid in 2019 was Won 245 million, of which (i) Won 120 million was paid as short-term performance-based compensation pursuant to a performance evaluation for 2018 (based on the resolution of the Evaluation & Compensation Committee), consisting of Won 90 million paid as an upfront lump sum payment and Won 30 million (representing 636 shares) paid as the first installment of deferred payments and (ii) Won 125 million (representing 2,611 shares) was paid as deferredshort- and long-term performance-based compensation pursuant to a performance evaluation over the period from 2016 to 2017 (based on the resolution of the Evaluation & Compensation Committee).
The short-term performance evaluation index for 2018 consisted of non-financial results pertaining to the executive officer’s responsibility as the deputy president of the audit department to efficiently conduct internal audit and establish a transparent internal control environment. The amount of the short-term incentive payment is determined by the Audit Committee and the Evaluation & Compensation Committee based on the aggregate score of the index items above and is within the range of0%-120% of the base salary. | ||||||
With respect tonon-financial results, major achievements included establishing an internal control environment within the Company and contributing to stable management results by reinforcing stronger standards for audits conducted by external auditors and by implementing improvements for internal control, as well as effectively responding to audit probes and regulatory policies through proactive outreach efforts. | ||||||||
| Stock options | — | Not applicable | ||||||
| Other earned income | 9 | Welfare benefits | ||||||
Retirement income | — | Not applicable | ||||||
Other income | — | Not applicable | ||||||
| 5.5. | Affiliated Companies |
5.5.1. List of Affiliated Companies
Affiliated companies of KB Financial Group that are first-tier subsidiaries and KB Financial Group’s ownership of such companies as of December 31, 2019 are as follows.
1) Kookmin Bank (100.00%)
2) KB Securities Co., Ltd. (100.00%)
3) KB Insurance Co., Ltd. (100.00%)
4) KB Kookmin Card Co., Ltd. (100.00%)
5) KB Asset Management Co., Ltd. (100.00%)
6) KB Capital Co., Ltd. (100.00%)
7) KB Life Insurance Co., Ltd. (100.00%)
8) KB Real Estate Trust Co., Ltd. (100.00%)
9) KB Savings Bank Co., Ltd. (100.00%)
10) KB Investment Co., Ltd. (100.00%)
11) KB Data Systems Co., Ltd. (100.00%)
12) KB Credit Information Co., Ltd. (100.00%)
| 6. | Directors, Senior Management and Employees |
| 6.1. | Executive Directors |
As of March 30, 2020, we had one executive director. The name, position and the end of the term of our executive director and the number of shares of our common stock he owned as of December 31, 2019 are set forth below.
Name | Date of Birth | Position | Common Shares Owned | End of Term | ||||
Jong Kyoo Yoon | October 1955 | Chairman & Chief Executive Officer | 21,000 | November 20, 2020 |
| 6.2. | Non-standing Directors |
As of March 30, 2020, we had onenon-standing director. The name, position and the end of the term of ournon-standing director and the number of shares of our common stock he owned as of December 31, 2019 are set forth below.
Name | Date of Birth | Position | Common Shares Owned | End of Term | ||||
Yin Hur | December 1961 | Non-standing Director | 7,500 | November 20, 2020 |
| 6.3. | Non-executive Directors |
As of March 30, 2020, we had sevennon-executive directors. The name, position and the end of the term of ournon-executive directors and the number of shares of our common stock they respectively owned as of December 31, 2019 were as follows.
Name | Date of Birth | Position | Common Shares Owned | End of Term | ||||||
Suk Ho Sonu | September 1951 | Non-executive Director | — | March 19, 2021 | ||||||
Stuart B. Solomon | July 1949 | Non-executive Director | — | March 19, 2021 | ||||||
Myung Hee Choi | February 1952 | Non-executive Director | — | March 19, 2021 | ||||||
Kouwhan Jeong | September 1953 | Non-executive Director | — | March 19, 2021 | ||||||
Kyung Ho Kim | December 1954 | Non-executive Director | — | March 26, 2021 | ||||||
Seon-joo Kwon | November 1956 | Non-executive Director | — | March 19, 2022 | ||||||
Gyutaeg Oh | February 1959 | Non-executive Director | — | March 19, 2022 | ||||||
As of March 30, 2020, the followingnon-executive director also served as a director at another company.
Name | Company | Position | Appointment Date | |||
| Kouwhan Jeong | Nambujeil Law and Notary Office Inc. | Co-president Attorney at Law | May 2016 |
| 6.4. | Senior Management |
Members of our senior management as of March 30, 2020 are as follows. The number of common shares owned is as of December 31, 2019.
Name | Date of Birth | Position | Common Shares Owned | End of Term | ||||||
Chang Kwon Lee | November 1965 | Deputy President, Chief Strategy Officer and Head of Global Business Unit | 500 | December 31, 2020 | ||||||
Ki-Hwan Kim | March 1963 | Deputy President and Chief Finance Officer | 1,541 | December 31, 2020 | ||||||
Nam Jong Seo | June 1963 | Deputy President and Chief Risk Management Officer | 119 | December 31, 2021 | ||||||
Pil Kyu Im | March 1964 | Deputy President and Chief Human Resources Officer | 1,005 | December 31, 2020 | ||||||
Kyung Yup Cho | September 1961 | Deputy President; KB Research | 1,500 | December 31, 2020 | ||||||
Young Hyuk Jo | April 1963 | Deputy President; Audit Department | 961 | December 31, 2020 | ||||||
Nam Hoon Cho | June 1968 | Senior Managing Director and Chief Global Strategy Officer | 1,000 | December 31, 2020 | ||||||
Chan Il Park | March 1963 | Managing Director and Chief Compliance Officer | 1,129 | December 31, 2020 | ||||||
Seok Mun Choi | August 1968 | Managing Director and Head of Office of Board of Directors | 654 | December 31, 2021 | ||||||
Soon Bum Kwon | October 1966 | Managing Director | 1,390 | December 31, 2020 | ||||||
Jeong Rim Park | November 1963 | Head of Capital Market Business Unit | 3,150 | December 31, 2020 | ||||||
Sung Hyun Kim | August 1963 | Head of Corporate and Investment Banking Business Unit | 10,468 | December 31, 2020 | ||||||
Jong Hee Yang | June 1961 | Head of Insurance Business Unit | 914 | December 31, 2020 | ||||||
Dong Cheol Lee | October 1961 | Head of Retail Customer Business Unit | 2,065 | December 31, 2020 | ||||||
Young Gil Kim | January 1963 | Head of Wealth Management Business Unit | 152 | December 31, 2020 | ||||||
Woon Tae Kim | May 1963 | Head of Small and Medium Enterprise Business Unit | — | December 31, 2020 | ||||||
Mun-Cheol Jeong | August 1968 | Chief Public Relation Officer | 509 | December 31, 2020 | ||||||
Dong Whan Han | January 1965 | Chief Digital Innovation Officer | 1,100 | December 31, 2020 | ||||||
Woo Yeul Lee | November 1964 | Chief Information Technology Officer | 1,193 | December 31, 2020 | ||||||
Jin Soo Yoon | February 1964 | Chief Data Officer | — | March 31, 2021 | ||||||
Sang-Hyeon Woo | February 1964 | Corporate and Investment Banking Business Unit | 348 | December 31, 2020 | ||||||
Jeong Ha | January 1967 | Capital Market Business Unit | — | December 31, 2020 | ||||||
Chai Hyun Sung | September 1965 | Retail Customer Business Unit | 2,432 | December 31, 2020 | ||||||
Yun Sang Song | July 1964 | Insurance Business Unit | — | December 31, 2020 | ||||||
Jae Young Choi | June 1967 | Head of Pension Business Division | 652 | May 26, 2021 | ||||||
Jin Gyu Maeng | January 1966 | General Manager of Planning and Coordination Office | 691 | December 31, 2020 | ||||||
As of March 30, 2020, the following management also served as senior management at our subsidiaries.
Name | Subsidiary | Position | Appointment Date | |||
Yin Hur | Kookmin Bank | President and Chief Executive Officer | November 2017 | |||
Jeong Rim Park | KB Securities | Chief Executive Officer | January 2019 | |||
Sung Hyun Kim | KB Securities | Chief Executive Officer | January 2019 | |||
Jong Hee Yang | KB Insurance | Chief Executive Officer | March 2016 | |||
Dong Cheol Lee | KB Kookmin Card | Chief Executive Officer | January 2018 | |||
Young Gil Kim | Kookmin Bank | Senior Executive Vice President; Wealth Management Group | January 2020 | |||
| KB Securities | Deputy President; Wealth Management Division | January 2019 | ||||
Woon Tae Kim | Kookmin Bank | Senior Managing Director; Small and Medium Enterprise Group | January 2020 | |||
Mun-Cheol Jeong | Kookmin Bank | Managing Director; Brand·ESG Group | January 2020 | |||
Dong Whan Han | Kookmin Bank | Senior Executive Vice President; Digital Finance Group | January 2020 | |||
Woo Yeul Lee | Kookmin Bank | Senior Executive Vice President; Information Technology Group | January 2020 | |||
Jin Soo Yoon | Kookmin Bank | Senior Managing Director; Data Strategy Group | April 2019 | |||
| KB Kookmin Card | Senior Managing Director; Data Strategic Division | April 2019 | ||||
Sang-Hyeon Woo | Kookmin Bank | Senior Managing Director; Corporate Investment Banking Customer Group | January 2020 | |||
| KB Securities | Deputy President; Investment Banking Division | January 2020 | ||||
Jeong Ha | Kookmin Bank | Senior Managing Director; Capital Markets Group | January 2020 | |||
Chai Hyun Sung | Kookmin Bank | Senior Executive Vice President; Retail Customer Group | January 2020 | |||
Yun Sang Song | KB Life Insurance | Senior Managing Director; Strategy & Finance Planning Division | January 2020 | |||
Jae Young Choi | Kookmin Bank | Head of Pension Business Division | May 2019 | |||
| KB Securities | Managing Director; Pension Business Division | January 2020 | ||||
| KB Insurance | Managing Director; Pension Business Division | January 2020 | ||||
Jin Gyu Maeng | Kookmin Bank | General Manager; Planning and Coordination Office | January 2019 | |||
Ki-Hwan Kim | KB Insurance | Non-standing Director | February 2018 | |||
| KB Kookmin Card | Non-standing Director | February 2018 | ||||
Chang Kwon Lee | KB Securities | Non-standing Director | February 2018 |
| 6.5. | Employees |
The following table shows information regarding our employees and compensation paid to them as of December 31, 2019.
(Unit: in millions of Won) | ||||||||
Number of | Average Tenure of Employees | Total Amount of Annual Salaries(B) | Average Annual Salary per Person(B/A) | |||||
162 | 4 years (14 years and 6 months)(2) | 23,854(3) | 147(3) | |||||
| (1) | Includes executive officers. |
| (2) | Includes tenure at our subsidiaries. |
| (3) | Includes retroactive payments of wage increases and bonuses from 2018. The average annual salary per person excluding such amounts is Won 137.6 million. |
The following table shows information regarding our executive officers and compensation paid to them as of December 31, 2019.
| (Unit: in millions of Won) | ||||||||
Number of Executive Officers(A)(1) | Total Amount of Annual Salaries(B) | Average Annual Salary per Person(B/A) | ||||||
| 9 | 3,442 | 382 | ||||||
| (1) | Excludes twelve executive officers who serve primarily as executive officers of our subsidiaries. |
| 7. | Major Shareholders and Related Party Transactions |
| 7.1. | Major Shareholders |
The following table presents information regarding holders of 5% or more of our total issued shares as of December 31, 2019.
| (Unit: shares, %) | ||||||||
Name | Number of Shares of Common Stock(1) | Percentage of Total Issued Shares(2) | ||||||
Korean National Pension Service | 41,468,003 | 9.97 | ||||||
JP Morgan Chase Bank, N.A.(3) | 26,622,633 | 6.40 | ||||||
| (1) | Based on our shareholder registry as of December 31, 2019. |
| (2) | Based on 415,807,920 shares of our common stock issued as of December 31, 2019 |
| (3) | Depositary under the Company’s ADR program. The voting rights are held by ADR holders. |
| 7.2. | Changes in the Largest Shareholder |
| (As of December 31, 2019) | (Unit: shares, %) | |||||||||||
Name of Largest Shareholder | Date of Change in Largest Shareholder/Date of Change in Number of Shares Owned | Number of Shares of Common Stock | Percentage of Total Issued Shares(1) | |||||||||
Korean National Pension Service | December 31, 2015 | 35,534,667 | 9.20 | |||||||||
Korean National Pension Service | August 12, 2016 | 36,826,207 | 9.53 | |||||||||
Korean National Pension Service | December 31, 2016 | 41,190,896 | 9.85 | |||||||||
Korean National Pension Service | April 24, 2017 | 40,950,453 | 9.79 | |||||||||
Korean National Pension Service | October 16, 2017 | 40,479,793 | 9.68 | |||||||||
Korean National Pension Service | December 31, 2017 | 40,204,583 | 9.62 | |||||||||
Korean National Pension Service | December 31, 2018 | 39,704,733 | 9.50 | |||||||||
Korean National Pension Service | December 31, 2019 | 41,468,003 | 9.97 | |||||||||
| (1) | Total number of shares of common stock issued as of the following dates: |
Prior to October 19, 2016: 386,351,693
From October 19, 2016 to December 12, 2019: 418,111,537
After December 12, 2019: 415,807,920
| 7.3. | Employee Stock Ownership Association |
| (As of December 31, 2019) | (Unit: shares) | |||
Company Name | Number of Shares of Common Stock Owned | |||
KB Financial Group Inc. | 33,652 | |||
Kookmin Bank | 4,146,652 | |||
KB Securities Co., Ltd. | 18,595 | |||
KB Insurance Co., Ltd. | 160,633 | |||
KB Kookmin Card Co., Ltd. | 159,074 | |||
KB Asset Management Co., Ltd. | 5,959 | |||
KB Capital Co., Ltd. | 23,006 | |||
KB Life Insurance Co., Ltd. | 8,216 | |||
KB Real Estate Trust Co., Ltd. | 12,043 | |||
KB Savings Bank Co., Ltd. | 2,993 | |||
KB Investment Co., Ltd. | 980 | |||
KB Data Systems Co., Ltd. | 9,866 | |||
KB Credit Information Co., Ltd. | 6,987 | |||
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Total | 4,588,656 | |||
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| 7.4. | Investments in Affiliated Companies |
| (As of December 31, 2019) | (Units: shares, %, millions of Won) | |||||||||||||||||||
Company Name | Ending Balance | Total assets(1) | Net income (loss) (1) | |||||||||||||||||
| Number of shares owned | Ownership | Book value | ||||||||||||||||||
Kookmin Bank | 404,379,116 | 100 | 14,821,721 | 387,425,038 | 2,439,079 | |||||||||||||||
KB Securities Co., Ltd. | 298,620,424 | 100 | 3,342,391 | 47,816,512 | 257,893 | |||||||||||||||
KB Insurance Co., Ltd. | 66,500,000 | 100 | 2,375,430 | 36,552,368 | 234,327 | |||||||||||||||
KB Kookmin Card Co., Ltd. | 92,000,000 | 100 | 1,953,175 | 22,990,115 | 316,546 | |||||||||||||||
KB Asset Management Co., Ltd. | 7,667,550 | 100 | 96,312 | 310,018 | 48,899 | |||||||||||||||
KB Capital Co., Ltd. | 23,349,208 | 100 | 623,811 | 11,190,568 | 117,028 | |||||||||||||||
KB Life Insurance Co., Ltd. | 91,200,000 | 100 | 485,314 | 9,801,904 | 15,963 | |||||||||||||||
KB Real Estate Trust Co., Ltd. | 16,000,000 | 100 | 121,553 | 377,938 | 61,713 | |||||||||||||||
KB Savings Bank Co., Ltd. | 8,001,912 | 100 | 157,544 | 1,361,031 | 16,301 | |||||||||||||||
KB Investment Co., Ltd. | 22,525,328 | 100 | 154,910 | 756,972 | 11,311 | |||||||||||||||
KB Data Systems Co., Ltd. | 800,000 | 100 | 6,334 | 27,834 | (256 | ) | ||||||||||||||
KB Credit Information Co., Ltd. | 1,252,400 | 100 | 23,621 | 41,690 | 4,664 | |||||||||||||||
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Total | — | — | 24,162,116 | — | — | |||||||||||||||
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(1) Based onK-IFRS (on a consolidated basis).
| 7.5. | Related Party Transactions |
7.5.1. Purchase of capital securities issued by KB Capital Co., Ltd.
| (Unit: in billions of Won) | ||||||||||||||
Issuer | Relationship | Type | Issue | Issue Date | Interest | Maturity Date | Use of | |||||||
KB Capital Co., Ltd. | Subsidiary | No. 299 Private Placement of Capital Securities in Won | 50 | March 27, 2015 | 5.011% | March 27, 2045 (may be extended) | Working capital | |||||||
| (Unit: in billions of Won) | ||||||||||||||
Issuer | Relationship | Type | Issue | Issue Date | Interest | Maturity Date | Use of | |||||||
KB Capital Co., Ltd. | Subsidiary | No. 320 Private Placement of Capital Securities in Won | 50 | September 24, 2015 | 4.606% | September 24, 2045 (may be extended) | Working capital | |||||||
| (Unit: in billions of Won) | ||||||||||||||
Issuer | Relationship | Type | Issue | Issue Date | Interest | Maturity Date | Use of | |||||||
KB Capital Co., Ltd. | Subsidiary | No. 343 Private Placement of Capital Securities in Won | 50 | March 29, 2016 | 4.396% | March 29, 2046 (may be extended) | Working capital | |||||||
| (Unit: in billions of Won) | ||||||||||||||
Issuer | Relationship | Type | Issue | Issue Date | Interest | Maturity Date | Use of | |||||||
KB Capital Co., Ltd. | Subsidiary | No. 352 Private Placement of Capital Securities in Won | 50 | June 28, 2016 | 4.064% | June 28, 2046 (may be extended) | Working capital | |||||||
| (Unit: in billions of Won) | ||||||||||||||
Issuer | Relationship | Type | Issue | Issue Date | Interest | Maturity Date | Use of | |||||||
KB Capital Co., Ltd. | Subsidiary | No. 367 Private Placement of Capital Securities in Won | 50 | November 28, 2016 | 4.744% | November 28, 2046 (may be extended) | Working capital | |||||||
| (Unit: in billions of Won) | ||||||||||||||
Issuer | Relationship | Type | Issue | Issue Date | Interest | Maturity Date | Use of | |||||||
KB Capital Co., Ltd. | Subsidiary | No. 378 Private Placement of Capital Securities in Won | 50 | April 27, 2017 | 4.431% | April 27, 2047 (may be extended) | Working capital | |||||||
7.5.2. Prepayments and Loans to Subsidiaries
| (Unit: in billions of Won) | ||||||||||||||
Name | Relationship | Account | Loan Amount | Current | Credit Offering | Interest | Maturity Date | |||||||
KB Investment Co., Ltd. | Subsidiary | Loans(1) | 10 | 10 | July 14, 2017 | 2.195%(2) | July 12, 2020 | |||||||
| (1) | Unsecured credit loans. |
| (2) | Changed from 2.150% to 2.195% upon extension of the loans on July 13, 2019. |
| (Unit: in billions of Won) | ||||||||||||||
Name | Relationship | Account | Loan Amount | Current | Credit Offering | Interest | Maturity Date | |||||||
KB Investment Co., Ltd. | Subsidiary | Loans(1) | 40 | 40 | July 13, 2018 | 2.195%(2) | July 12, 2020 | |||||||
| (1) | Unsecured credit loans. |
| (2) | Changed from 2.150% to 2.195% upon extension of the loans on July 13, 2019 |
| (Unit: in billions of Won) | ||||||||||||||
Name | Relationship | Account | Loan Amount | Current | Credit Offering | Interest | Maturity Date | |||||||
KB Investment Co., Ltd. | Subsidiary | Loans(1) | 70 | 70 | March 8, 2019 | 2.176% | March 7, 2020 | |||||||
| (1) | Unsecured credit loans. |
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized.
KB Financial Group Inc. | ||||||||
| (Registrant) | ||||||||
Date: March 30, 2020 | By: /s/Ki-Hwan Kim | |||||||
| (Signature) | ||||||||
| Name: | Ki-Hwan Kim | |||||||
| Title: | Deputy President and Chief Finance Officer | |||||||
