UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
Form 6-K
REPORT OF FOREIGN PRIVATE ISSUER
PURSUANT TO RULE 13a-16 OR 15d-16 UNDER
THE SECURITIES EXCHANGE ACT OF 1934
For the month of November 2020
Commission File Number: 000-53445
KB Financial Group Inc.
(Translation of registrant’s name into English)
141, Uisadang-daero, Yeongdeungpo-gu, Seoul 07332, Korea
(Address of principal executive office)
Indicate by check mark whether the registrant files or will file annual reports under cover of Form 20-F or Form 40-F.
Form 20-F ☒ Form 40-F ☐
Indicate by check mark if the registrant is submitting the Form 6-K in paper as permitted by Regulation S-T Rule 101(b)(1): ☐
Note: Regulation S-T Rule 101(b)(1) only permits the submission in paper of a Form 6-K if submitted solely to provide an attached annual report to security holders.
Indicate by check mark if the registrant is submitting the Form 6-K in paper as permitted by Regulation S-T Rule 101(b)(7): ☐
Note: Regulation S-T Rule 101(b)(7) only permits the submission in paper of a Form 6-K if submitted to furnish a report or other document that the registrant foreign private issuer must furnish and make public under the laws of the jurisdiction in which the registrant is incorporated, domiciled or legally organized (the registrant’s “home country”), or under the rules of the home country exchange on which the registrant’s securities are traded, as long as the report or other document is not a press release, is not required to be and has not been distributed to the registrant’s security holders, and, if discussing a material event, has already been the subject of a Form 6-K submission or other Commission filing on EDGAR.
Summary of 2020 Third Quarter Business Report
On November 16, 2020, KB Financial Group Inc. (“KB Financial Group”) filed its business report for the third quarter of 2020 (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 |
Changed the name of KB Venture Capital Co., Ltd. to KB Investment Co., Ltd. (“KB Investment”)
| • | January 22, 2010 |
The largest shareholder of the Company changed from the Korean National Pension Service to ING Bank N.V.
| • | March 2, 2011 |
Added KB Kookmin Card Co., Ltd. (“KB Kookmin Card”) as a first-tier subsidiary
| • | March 14, 2011 |
KB Futures Co., Ltd. was merged into KB Investment & Securities Co., Ltd. (“KB Investment & Securities”)
| • | July 8, 2011 |
The largest shareholder of the Company changed from ING Bank N.V. to the Korean National Pension Service
| • | January 13, 2012 |
Added KB Savings Bank Co., Ltd. (“KB Savings Bank”) as a first-tier subsidiary
| • | May 11, 2012 |
Added KoFC POSCO HANWHA KB Shared Growth No. 2. Private Equity Fund as a second-tier subsidiary
| • | July 2, 2012 |
Added KoFC Value-up Private Equity Fund as a second-tier subsidiary
| • | October 10, 2012 |
Added Kookmin Bank (China) Ltd. as a second-tier subsidiary
| • | June 20, 2013 |
Acquired the remaining shares of KB Life Insurance, which increased the Company’s shareholding to 100%
| • | September 2, 2013 |
Added Yehansoul Savings Bank as a first-tier subsidiary
| • | January 13, 2014 |
Yehansoul Savings Bank was merged into KB Savings Bank
| • | March 20, 2014 |
Added KB Capital Co., Ltd. (“KB Capital”) as a first-tier subsidiary
| • | June 24, 2015 |
Added KB Insurance Co., Ltd. (“KB Insurance”) as a non-consolidated first-tier subsidiary
| • | November 23, 2015 |
Acquired additional shares of KB Insurance, which increased the Company’s shareholding from 19.47% to 33.29%
| • | May 31, 2016 |
Added Hyundai Securities Co., Ltd. (“Hyundai Securities”) as a non-consolidated first-tier subsidiary
| • | June 21, 2016 |
Disposed of LIG Investment & Securities, Co., Ltd., a second-tier subsidiary
| • | June 28, 2016 |
Acquired treasury shares of Hyundai Securities, which increased the Company’s equity ownership in Hyundai Securities from 22.56% to 29.62%
| • | December 1, 2016 |
Added KB Golden Life Care Co., Ltd. as a second-tier subsidiary
| • | December 29, 2016 |
Established KB Private Equity Fund III as a second-tier subsidiary
| • | December 30, 2016 |
Purchased new shares of KB Insurance in a rights offering, which increased the Company’s shareholding in KB Insurance from 33.29% to 39.81%
| • | December 30, 2016 |
Merged KB Investment & Securities with and into Hyundai Securities, with Hyundai Securities as the surviving entity, then changed its name to KB Securities Co., Ltd. (“KB Securities”)
| • | February 8, 2017 |
Added KB KOLAO LEASING Co., Ltd. as a second-tier subsidiary
| • | March 8, 2017 |
Added KB Microfinance Myanmar Co., Ltd. as a second-tier subsidiary
| • | May 19, 2017 |
Acquired additional shares of KB Insurance in a tender offer, which increased the Company’s shareholding in KB Insurance from 39.81% to 94.30%
| • | May 19, 2017 |
Acquired additional shares of KB Capital in a tender offer, which increased the Company’s shareholding in KB Capital from 52.02% to 79.70%
| • | July 7, 2017 |
Converted KB Insurance and KB Capital into wholly-owned subsidiaries of the Company through comprehensive stock swaps
| • | September 29, 2017 |
Added KB Asset Management Singapore Pte. Ltd. as a second-tier subsidiary (changed from a second-tier subsidiary of KB Securities to a first-tier subsidiary of KB Asset Management Co., Ltd.)
| • | October 9, 2017 |
Added KB Securities Vietnam Joint Stock Company (formerly Maritime Securities Incorporation) as a second-tier subsidiary
| • | October 16, 2017 |
Disposed of Hyundai Savings Bank, Co., Ltd., a second-tier subsidiary
| • | December 22, 2017 |
Disposed of Hyundai Asset Management, Co., Ltd., a second-tier subsidiary
| • | January 17, 2018 |
Added KB-TS Technology Venture Private Equity Fund as a second-tier subsidiary (equity interests of 16%, 30% and 10% held by KB Securities, Kookmin Bank and KB Capital, respectively)
| • | July 6, 2018 |
Added KB Daehan Specialized Bank PLC. as a second-tier subsidiary
| • | August 21, 2018 |
Added KBAM Shanghai Advisory Services Co., Ltd. as a second-tier subsidiary
| • | December 31, 2018 |
Added KB-Stonebridge Secondary Private Equity Fund as a second-tier subsidiary
| • | January 9, 2019 |
Added KB-SPROTT Renewable Private Equity Fund I as a second-tier subsidiary
| • | September 17, 2019 |
Added KB-SP Private Equity Fund IV as a second-tier subsidiary
| • | February 28, 2020 |
Added KB-NAU Special Situation Corporate Restructuring Private Equity Fund as a second-tier subsidiary
| • | April 9, 2020 |
Disposed of KB-IGen Private Equity Fund No.1, a second-tier subsidiary
| • | April 10, 2020 |
Added PRASAC Microfinance Institution PLC. as a second-tier subsidiary
| • | May 18, 2020 |
Added PT Sunindo Kookmin Best Finance as a second-tier subsidiary
| • | July 3, 2020 |
Added PT KB Finansia Multi Finance as a second-tier subsidiary
| • | August 31, 2020 |
Added Prudential Life Insurance Company of Korea, Ltd. as a first-tier subsidiary
| • | September 2, 2020 |
Added PT Bukopin Bank TBK as a second-tier subsidiary
| 1.3. | Overview of the Business Group |
| (As of September 30, 2020) | ||||||
Type | Name of Company | Controlling Company | Remarks | |||
Holding Company | KB Financial Group | — | Listed | |||
1st Tier Subsidiaries | Kookmin Bank | KB Financial Group | Not listed | |||
| KB Securities Co., Ltd. | KB Financial Group | Not listed | ||||
| KB Insurance Co., Ltd. | KB Financial Group | Not listed | ||||
| KB Kookmin Card Co., Ltd. | KB Financial Group | Not listed | ||||
| Prudential Life Insurance Company of Korea, Ltd. | KB Financial Group | Not listed | ||||
| KB Asset Management Co., Ltd. | KB Financial Group | Not listed | ||||
| KB Capital Co., Ltd. | KB Financial Group | Not listed | ||||
| KB Life Insurance Co., Ltd. | KB Financial Group | Not listed | ||||
| KB Real Estate Trust Co., Ltd. | KB Financial Group | Not listed | ||||
| KB Savings Bank Co., Ltd. | KB Financial Group | Not listed | ||||
| KB Investment Co., Ltd. | KB Financial Group | Not listed | ||||
| KB Data Systems Co., Ltd. | KB Financial Group | Not listed | ||||
| KB Credit Information Co., Ltd. | KB Financial Group | Not listed | ||||
2nd Tier Subsidiaries | Kookmin Bank Cambodia PLC. | Kookmin Bank | Not listed (Overseas) | |||
| Kookmin Bank (China) Ltd. | Kookmin Bank | Not listed (Overseas) | ||||
| KB Microfinance Myanmar Co., Ltd. | Kookmin Bank | Not listed (Overseas) | ||||
| PRASAC Microfinance Institution PLC. | Kookmin Bank | Not listed (Overseas) | ||||
| PT Bukopin Bank TBK | Kookmin Bank | Listed (Overseas) | ||||
| KBFG Securities America Inc. | KB Securities | Not listed (Overseas) | ||||
| KB Securities Hong Kong Ltd. | KB Securities | Not listed (Overseas) | ||||
| Keystone-Hyundai Securities No. 1 Private Equity Fund | KB Securities | Not listed | ||||
| KB 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-NAU Special Situation Corporate Restructuring Private Equity Fund | 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) | ||||
| PT KB Finansia Multi Finance | 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) | ||||
| PT Sunindo Kookmin Best Finance | KB Capital | Not listed (Overseas) | ||||
| KoFC POSCO HANWHA KB Shared Growth No. 2. Private Equity Fund | KB Investment | Not listed | ||||
| KoFC Value-up Private Equity Fund | KB Investment | Not listed |
| 1.4. | Capital Structure |
| 1.4.1. | Common Shares |
Changes in Capital
Not included in quarterly business reports.
Number of Shares
| (As of September 30, 2020) | (Unit: shares) | |||||||||||||||
| Type | ||||||||||||||||
| Common Shares | Preferred Shares | Total | Remarks | |||||||||||||
Shares Authorized for Issuance | 1,000,000,000 | — | 1,000,000,000 | | As specified in the Articles of Incorporation | | ||||||||||
Total Shares Issued (A) | 418,111,537 | — | 418,111,537 | — | ||||||||||||
Decrease in Number of Shares (B) | 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 September 30, 2020 (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 treasury shares above include five million treasury shares that are expected to be exchanged for the exchangeable bonds issued by the Company on June 30, 2020. Such treasury shares are currently deposited with Korea Securities Depositary and will be disposed upon the exercise of the exchange option of the exchangeable bonds. For more information, please refer to the Company’s report on Form 6-K furnished to the Securities and Exchange Commission on June 18, 2020. |
1.4.2. Voting Rights
(As of September 30, 2020) | (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 | — | — | ||||||
| Note: | The treasury shares above include five million treasury shares that are expected to be exchanged for the exchangeable bonds issued by the Company on June 30, 2020. Such treasury shares are currently deposited with Korea Securities Depositary and will be disposed upon the exercise of the exchange option of the exchangeable bonds. For more information, please refer to the Company’s report on Form 6-K furnished to the Securities and Exchange Commission on June 18, 2020. |
| 2. | Business |
| 2.1. | Results of Operations |
| (Unit: in millions of Won) | ||||||||||||||||
| For the nine months ended September 30, 2020 | For the nine months ended September 30, 2019 | For the year ended December 31, 2019 | For the year ended December 31, 2018 | |||||||||||||
Net interest income | 7,143,391 | 6,868,587 | 9,196,787 | 8,904,928 | ||||||||||||
Interest income | 10,800,535 | 11,011,986 | 14,639,187 | 13,734,569 | ||||||||||||
Interest expense | (3,657,144 | ) | (4,143,399 | ) | (5,442,400 | ) | (4,829,641 | ) | ||||||||
Net fee and commission income | 2,170,480 | 1,716,494 | 2,355,004 | 2,243,376 | ||||||||||||
Fee and commission income | 3,339,828 | 2,844,405 | 3,879,247 | 3,717,720 | ||||||||||||
Fee and commission expense | (1,169,348 | ) | (1,127,911 | ) | (1,524,243 | ) | (1,474,344 | ) | ||||||||
Net insurance income | 289,647 | 300,447 | 299,512 | 490,116 | ||||||||||||
Insurance income | 10,390,123 | 9,202,914 | 12,317,182 | 11,975,070 | ||||||||||||
Insurance expense | (10,100,476 | ) | (8,902,467 | ) | (12,017,670 | ) | (11,484,954 | ) | ||||||||
Net gains on financial assets/liabilities at fair value through profit or loss | 470,790 | 433,761 | 643,872 | 351,303 | ||||||||||||
Net other operating expenses | (827,700 | ) | (685,108 | ) | (1,063,324 | ) | (1,130,036 | ) | ||||||||
General and administrative expenses | (4,646,217 | ) | (4,456,696 | ) | (6,271,017 | ) | (5,918,512 | ) | ||||||||
Operating profit before provision for credit losses | 4,600,391 | 4,177,485 | 5,160,834 | 4,941,175 | ||||||||||||
Provision for credit losses | (754,292 | ) | (459,888 | ) | (670,185 | ) | (673,694 | ) | ||||||||
Net operating profit | 3,846,099 | 3,717,597 | 4,490,649 | 4,267,481 | ||||||||||||
| Note: | The consolidated financial information for the nine months ended September 30, 2020, the nine months ended September 30, 2019 and the year ended December 31, 2019 is based on K-IFRS 1116. The corresponding financial information for the year ended December 31, 2018 has not been restated. |
| 2.2. | Sources and Uses of Funds |
2.2.1. Sources of Funds
| (Unit: in millions of Won) | ||||||||||||||||||||||||||||||||||||||
| For the nine months ended September 30, 2020 | For the year ended December 31, 2019 | For the year ended December 31, 2018 | ||||||||||||||||||||||||||||||||||||
| Average Balance | Interest Rate (%) | Ratio (%) | Average Balance | Interest Rate (%) | Ratio (%) | Average Balance | Interest Rate (%) | Ratio (%) | ||||||||||||||||||||||||||||||
| Deposits | 282,154,528 | 1.14 | 51.65 | 255,533,447 | 1.44 | 52.09 | 238,468,014 | 1.39 | 52.82 | |||||||||||||||||||||||||||||
| Certificate of deposit | 3,911,683 | 1.46 | 0.72 | 4,780,665 | 1.95 | 0.97 | 3,044,609 | 1.91 | 0.67 | |||||||||||||||||||||||||||||
Won Currency | Borrowings | 16,617,975 | 1.31 | 3.04 | 11,332,972 | 1.67 | 2.31 | 10,312,988 | 1.59 | 2.28 | ||||||||||||||||||||||||||||
| Call money | 1,331,738 | 0.75 | 0.24 | 891,357 | 1.55 | 0.18 | 1,437,887 | 1.53 | 0.32 | |||||||||||||||||||||||||||||
| Debentures | 51,250,261 | 2.09 | 9.38 | 47,127,572 | 2.33 | 9.61 | 44,072,110 | 2.29 | 9.76 | |||||||||||||||||||||||||||||
| Others | 18,878,924 | 1.09 | 3.46 | 15,203,562 | 1.88 | 3.11 | 16,665,395 | 1.60 | 3.69 | |||||||||||||||||||||||||||||
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Subtotal | 374,145,109 | 1.28 | 68.49 | 334,869,575 | 1.60 | 68.27 | 314,001,003 | 1.54 | 69.54 | |||||||||||||||||||||||||||||
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Foreign Currency | Deposits | 19,036,203 | 1.26 | 3.48 | 13,370,035 | 1.25 | 2.73 | 11,039,672 | 1.15 | 2.45 | ||||||||||||||||||||||||||||
| Borrowings | 12,205,562 | 1.87 | 2.23 | 9,668,310 | 2.19 | 1.97 | 8,249,765 | 2.02 | 1.83 | |||||||||||||||||||||||||||||
| Call money | 1,094,907 | 1.01 | 0.20 | 527,809 | 2.34 | 0.11 | 751,171 | 2.35 | 0.17 | |||||||||||||||||||||||||||||
| Debentures | 6,174,031 | 1.93 | 1.13 | 5,447,017 | 2.62 | 1.11 | 4,076,096 | 3.40 | 0.90 | |||||||||||||||||||||||||||||
| Others | 969,110 | 0.88 | 0.19 | 463,266 | 1.38 | 0.09 | 297,657 | 0.89 | 0.07 | |||||||||||||||||||||||||||||
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Subtotal | 39,479,813 | 1.54 | 7.23 | 29,476,437 | 1.83 | 6.01 | 24,414,361 | 1.85 | 5.42 | |||||||||||||||||||||||||||||
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Others | Total shareholders’ equity | 40,853,212 | — | 7.48 | 38,464,863 | — | 7.84 | 35,690,200 | — | 7.90 | ||||||||||||||||||||||||||||
| Allowances | 868,106 | — | 0.16 | 873,017 | — | 0.18 | 750,262 | — | 0.17 | |||||||||||||||||||||||||||||
| Others | 90,896,469 | — | 16.64 | 86,839,627 | — | 17.70 | 76,643,695 | — | 16.97 | |||||||||||||||||||||||||||||
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| |||||||||||||||||||||
Subtotal | 132,617,787 | — | 24.28 | 126,177,507 | — | 25.72 | 113,084,157 | — | 25.04 | |||||||||||||||||||||||||||||
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| |||||||||||||||||||||
Total | 546,242,709 | — | 100.00 | 490,523,519 | — | 100.00 | 451,499,521 | — | 100.00 | |||||||||||||||||||||||||||||
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| Note: | Based on K-IFRS (on a consolidated basis). |
| 2.2.2. | Uses of Funds |
| (Unit: in millions of Won) | ||||||||||||||||||||||||||||||||||||||
| For the nine months ended September 30, 2020 | For the year ended December 31, 2019 | For the year ended December 31, 2018 | ||||||||||||||||||||||||||||||||||||
| Average Balance | Interest Rate (%) | Ratio (%) | Average Balance | Interest Rate (%) | Ratio (%) | Average Balance | Interest Rate (%) | Ratio (%) | ||||||||||||||||||||||||||||||
Won Currency | Due from banks | 5,199,659 | 1.02 | 0.95 | 5,939,242 | 1.51 | 1.21 | 4,817,024 | 1.43 | 1.07 | ||||||||||||||||||||||||||||
| Securities | 118,654,841 | 2.07 | 21.72 | 103,204,928 | 2.31 | 21.04 | 95,395,973 | 2.84 | 21.13 | |||||||||||||||||||||||||||||
| Loans | 312,018,969 | 3.03 | 57.12 | 287,653,938 | 3.45 | 58.64 | 269,569,916 | 3.43 | 59.71 | |||||||||||||||||||||||||||||
Guarantee payments under payment guarantee | 13,585 | 0.78 | — | 8,803 | 0.98 | — | 8,206 | 1.87 | — | |||||||||||||||||||||||||||||
| Call loan | 880,456 | 0.78 | 0.16 | 640,485 | 1.69 | 0.13 | 632,317 | 1.48 | 0.14 | |||||||||||||||||||||||||||||
Private placement corporate bonds | 1,274,607 | 3.97 | 0.23 | 1,319,460 | 3.61 | 0.27 | 1,452,396 | 3.44 | 0.32 | |||||||||||||||||||||||||||||
| Credit cards | 18,380,523 | 7.65 | 3.36 | 17,945,697 | 7.92 | 3.66 | 16,722,691 | 8.15 | 3.70 | |||||||||||||||||||||||||||||
| Others | 4,762,138 | 4.75 | 0.89 | 3,874,774 | 4.93 | 0.79 | 4,209,878 | 4.08 | 0.93 | |||||||||||||||||||||||||||||
| Allowance | (2,387,667 | ) | — | (0.44 | ) | (2,406,757 | ) | — | (0.49 | ) | (2,434,872 | ) | — | (0.54 | ) | |||||||||||||||||||||||
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Subtotal | 458,797,111 | 2.98 | 83.99 | 418,180,570 | 3.36 | 85.25 | 390,373,529 | 3.49 | 86.46 | |||||||||||||||||||||||||||||
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Foreign Currency | Due from banks | 7,080,421 | 0.66 | 1.30 | 4,782,706 | 1.44 | 0.98 | 3,666,805 | 1.36 | 0.81 | ||||||||||||||||||||||||||||
| Securities | 15,181,856 | 4.06 | 2.78 | 13,323,102 | 4.35 | 2.72 | 12,704,025 | 2.47 | 2.81 | |||||||||||||||||||||||||||||
| Loans | 18,360,255 | 4.00 | 3.36 | 11,384,009 | 3.04 | 2.32 | 8,050,597 | 2.96 | 1.78 | |||||||||||||||||||||||||||||
| Call loan | 3,045,421 | 0.92 | 0.56 | 2,444,020 | 2.59 | 0.50 | 2,553,987 | 2.38 | 0.57 | |||||||||||||||||||||||||||||
| Bills bought | 1,531,565 | 1.73 | 0.28 | 2,944,008 | 2.66 | 0.60 | 4,113,332 | 1.93 | 0.91 | |||||||||||||||||||||||||||||
| Allowance | (228,415 | ) | — | (0.04 | ) | (180,649 | ) | — | (0.04 | ) | (262,835 | ) | — | (0.06 | ) | |||||||||||||||||||||||
| Others | 1,258,577 | — | 0.22 | 660,572 | — | 0.13 | 153,277 | — | 0.03 | |||||||||||||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| |||||||||||||||||||||
Subtotal | 46,229,680 | 3.17 | 8.46 | 35,357,768 | 3.28 | 7.21 | 30,979,188 | 2.41 | 6.85 | |||||||||||||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| |||||||||||||||||||||
Others | Cash | 1,819,524 | — | 0.33 | 1,763,413 | — | 0.36 | 1,769,656 | — | 0.39 | ||||||||||||||||||||||||||||
Fixed assets held for business | 7,964,820 | — | 1.46 | 7,398,134 | — | 1.51 | 5,639,374 | — | 1.25 | |||||||||||||||||||||||||||||
| Others | 31,431,574 | — | 5.76 | 27,823,634 | — | 5.67 | 22,737,774 | — | 5.05 | |||||||||||||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| |||||||||||||||||||||
Subtotal | 41,215,918 | — | 7.55 | 36,985,181 | — | 7.54 | 30,146,804 | — | 6.69 | |||||||||||||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| |||||||||||||||||||||
Total | 546,242,709 | — | 100.00 | 490,523,519 | — | 100.00 | 451,499,521 | — | 100.00 | |||||||||||||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| |||||||||||||||||||||
| Note: | Based on K-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 September 30, 2020(1)(2) | As of December 31, 2019 | As of December 31, 2018 | ||||||||||
Total capital (A) | 38,766 | 36,995 | 34,476 | |||||||||
Risk-weighted assets (B) | 263,967 | 255,549 | 236,099 | |||||||||
BIS ratio (A/B) | 14.69 | % | 14.48 | % | 14.60 | % | ||||||
Notes: Calculated in accordance with Basel III.
| (1) | Preliminary figures |
| (2) | Calculated in accordance with Basel III credit risk framework, as implemented early. |
Kookmin Bank | (Unit: in billions of Won) | |||||||||||
| As of September 30, 2020(1) | As of December 31, 2019 | As of December 31, 2018 | ||||||||||
Total capital (A) | 31,634 | 29,810 | 27,694 | |||||||||
Risk-weighted assets (B) | 183,908 | 188,075 | 178,433 | |||||||||
BIS ratio (A/B) | 17.20 | % | 15.85 | % | 15.52 | % | ||||||
Note: Calculated in accordance with Basel III.
| (1) | Calculated in accordance with Basel III credit risk framework, as implemented early. |
KB Securities Co., Ltd. | (Unit: in billions of Won) | |||||||||||
| As of September 30, 2020 | As of December 31, 2019 | As of December 31, 2018 | ||||||||||
Net operating capital (A) | 3,406 | 3,170 | 2,969 | |||||||||
Total amount at risk (B) | 1,749 | 1,561 | 1,251 | |||||||||
Maintenance equity margin (C) | 134 | 134 | 134 | |||||||||
Net capital ratio (A-B)/(C) | 1,234.24 | % | 1,198.74 | % | 1,278.45 | % | ||||||
Capital surplus (A-B) | 1,657 | 1,609 | 1,718 | |||||||||
KB Insurance Co., Ltd. | (Unit: in billions of Won) | |||||||||||
| As of September 30, 2020 | As of December 31, 2019 | As of December 31, 2018 | ||||||||||
Available capital (A) | 3,914 | 3,657 | 3,333 | |||||||||
Required capital (B) | 2,076 | 1,941 | 1,782 | |||||||||
RBC ratio (A/B) | 188.6 | % | 188.5 | % | 187.1 | % | ||||||
| Note: | RBC ratio: Risk-Based Capital ratio. |
| 2.3.2. | Overseas Credit Ratings |
| (As of September 30, 2020) | ||||||||
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 | Type | Credit Rating | Rating Company (Rating Range) | |||
| 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) | |||
| 1/15/2020 | Debentures | AAA | Korea Ratings (AAA ~ D) / KIS Ratings (AAA ~ D) / NICE Investors Service (AAA ~ D) | |||
| 2/12/2020 | Contingent Convertible Bonds | AA | Korea Ratings (AAA ~ D) / KIS Ratings (AAA ~ D) / NICE Investors Service (AAA ~ D) | |||
| 3/24/2020 | Contingent Convertible Bonds | AA- | Korea Ratings (AAA ~ D) / KIS Ratings (AAA ~ D) / NICE Investors Service (AAA ~ D) | |||
| 5/12/2020 | Debentures | AAA | Korea Ratings (AAA ~ D) / KIS Ratings (AAA ~ D) / NICE Investors Service (AAA ~ D) | |||
| 6/12/2020 | Debentures | AAA | Korea Ratings (AAA ~ D) / KIS Ratings (AAA ~ D) / NICE Investors Service (AAA ~ D) | |||
| 6/26/2020 | Commercial Paper | A1 | Korea Ratings (A1 ~ D) / KIS Ratings (A1 ~ D) / NICE Investors Service (A1 ~ D) | |||
| 7/1/2020 | Contingent Convertible Bonds | AA- | Korea Ratings (AAA ~ D) / KIS Ratings (AAA ~ D) / NICE Investors Service (AAA ~ D) | |||
| 8/6/2020 | Debentures | AAA | Korea Ratings (AAA ~ D) / KIS Ratings (AAA ~ D) / NICE Investors Service (AAA ~ D) | |||
| 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 PT Bukopin Bank TBK |
On July 30, 2020, Kookmin Bank acquired 2,967,600,372 additional common shares of PT Bukopin Bank TBK (“Bank Bukopin”) for IDR 534,168,066,960 (Won 43,909 million) through a shareholder-allocated capital increase. Subsequently, on September 2, 2020, Kookmin Bank acquired 16,360,578,947 additional common shares for IDR 3,108,509,999,930 (Won 252,721 million) through a third party-allocated capital increase. Following such acquisitions, Kookmin Bank’s ownership in Bank Bukopin is as follows:
| (Unit: in millions of Won) | ||
Ownership | Acquisition Amount | |
67% | 413,052(1)(2) (IDR 5,146,832,211,231) |
| Notes: | (1) The acquisition amount in IDR is converted to Won at the exchange rate on each of the respective acquisition dates. |
(2) Includes consulting fees of Won 3,348 million paid in connection with the acquisition. |
| 2.3.6. | Acquisition of Shares of PRASAC Microfinance Institution PLC. of Cambodia |
On April 10, 2020, Kookmin Bank acquired 70% of the total number of shares of PRASAC Microfinance Institution PLC. (“PRASAC”), a provider of microfinance and deposit-taking services in Cambodia, for USD 603 million, and has since incorporated PRASAC as a subsidiary. 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. If PRASAC’s shareholders do not exercise such put option, Kookmin Bank may exercise a call option to purchase the remaining 30% of PRASAC’s shares, and such call option may be exercised during the six months following the expiry of the put option held by PRASAC’s shareholders. The right to buy, sell, pledge or exercise any influence over the remaining 30% of PRASAC’s shares will be limited prior to the exercise of such put or call option.
| (Unit: in millions of Won) | ||
Ownership | Acquisition Amount | |
70% | 733,976(1) (USD 603,400,000) |
| Note: | (1) The acquisition amount in USD is converted to Won at the exchange rate on April 10, 2020, the acquisition date. |
| 2.3.7. | Completion of the Acquisition of Prudential Life Insurance Company of Korea, Ltd. and Addition as a New Subsidiary |
On August 31, 2020, KB Financial Group completed the acquisition of Prudential Life Insurance Company of Korea, Ltd., a provider of life insurance services in Korea, and added it as a new first-tier subsidiary. Through such acquisition, KB Financial Group aims not only to strengthen its life insurance business but also to solidify its balanced business portfolio of banking and non-banking businesses. For more information regarding the acquisition, please refer to the Company’s report on Form 6-K furnished to the Securities and Exchange Commission on August 31, 2020.
| (Unit: in millions of Won) | ||
Ownership | Acquisition Amount | |
100% | 2,299,541(1) |
| Note: | (1) The acquisition amount consists of the base purchase price (Won 2,265.0 billion) plus a fixed interest amount accrued on such base purchase price up to the date of the completion of the acquisition (Won 75.0 billion), less leakage adjustments during the period (Won 40.5 billion). |
| 2.3.8. | The Ongoing Outbreak of the Global Pandemic of COVID-19 |
The ongoing outbreak of the global pandemic of COVID-19 has resulted in significant global and domestic economic and financial disruptions in recent months. Although there have been some signs of recovery, the economic outlook for Korea and its financial services sector in the remainder of 2020 and for the foreseeable future continues to remain highly uncertain as a result of, among others, (i) uncertainty regarding the scope and duration of the COVID-19 outbreak and its lasting social, political and economic effects, and the fiscal and monetary policies being implemented by the Korean government and regulatory authorities to alleviate such effects, (ii) adverse conditions in the Korean and global economies and financial markets due to the COVID-19 pandemic and (iii) factors such as fluctuations in oil and commodity prices and interest and exchange rates, higher unemployment, lower consumer confidence and stock market volatility due to the impact of the COVID-19 pandemic.
| 3. | Financial Information |
| 3.1. | Consolidated Financial Information |
| 3.1.1. | Consolidated Statements of Financial Position |
| (Unit: in millions of Won) | ||||||||||||
| As of September 30, 2020 | As of December 31, 2019 | As of December 31, 2018 | ||||||||||
Cash and due from financial institutions | 25,380,724 | 20,837,878 | 20,274,490 | |||||||||
Financial assets at fair value through profit or loss | 58,835,919 | 53,549,086 | 50,987,847 | |||||||||
Derivative financial assets | 3,577,805 | 3,190,673 | 2,025,962 | |||||||||
Loans at amortized cost | 378,090,798 | 339,684,059 | 319,201,603 | |||||||||
Financial investments | 96,714,715 | 71,782,606 | 61,665,094 | |||||||||
Investments in associates and joint ventures | 892,315 | 598,240 | 504,932 | |||||||||
Property and equipment | 5,467,106 | 5,067,377 | 4,272,127 | |||||||||
Investment property | 2,893,443 | 2,827,988 | 2,119,811 | |||||||||
Intangible assets | 3,202,052 | 2,737,813 | 2,755,783 | |||||||||
Net defined benefit assets | — | 946 | — | |||||||||
Current income tax assets | 100,224 | 19,095 | 10,004 | |||||||||
Deferred income tax assets | 54,866 | 3,597 | 4,158 | |||||||||
Assets held for sale | 205,257 | 23,151 | 16,952 | |||||||||
Other assets | 30,091,129 | 18,215,608 | 15,749,535 | |||||||||
|
|
|
|
|
| |||||||
Total assets | 605,506,353 | 518,538,117 | 479,588,298 | |||||||||
|
|
|
|
|
| |||||||
Financial liabilities at fair value through profit or loss | 13,270,633 | 15,368,153 | 15,326,859 | |||||||||
Derivative financial liabilities | 3,780,286 | 3,007,341 | 2,901,247 | |||||||||
Deposits | 337,986,622 | 305,592,771 | 276,770,449 | |||||||||
Debts | 47,797,949 | 37,818,860 | 33,004,834 | |||||||||
Debentures | 60,254,491 | 50,935,583 | 53,278,697 | |||||||||
Provisions | 605,917 | 527,929 | 525,859 | |||||||||
Net defined benefit liabilities | 446,402 | 253,989 | 262,213 | |||||||||
Current income tax liabilities | 704,575 | 432,431 | 698,634 | |||||||||
Deferred income tax liabilities | 1,107,606 | 777,793 | 492,534 | |||||||||
Insurance contract liabilities | 53,503,349 | 34,966,683 | 33,412,949 | |||||||||
Other liabilities | 43,940,622 | 29,737,259 | 27,200,996 | |||||||||
|
|
|
|
|
| |||||||
Total liabilities | 563,398,452 | 479,418,792 | 443,875,271 | |||||||||
|
|
|
|
|
| |||||||
| As of September 30, 2020 | As of December 31, 2019 | As of December 31, 2018 | ||||||||||
Equity attributable to shareholders of the parent company | 41,211,390 | 38,533,918 | 35,703,916 | |||||||||
Share capital | 2,090,558 | 2,090,558 | 2,090,558 | |||||||||
Hybrid financial instrument | 1,197,137 | 399,205 | — | |||||||||
Capital surplus | 16,723,589 | 17,122,777 | 17,121,660 | |||||||||
Accumulated other comprehensive income | 386,367 | 348,021 | 177,806 | |||||||||
Retained earnings | 21,949,927 | 19,709,545 | 17,282,441 | |||||||||
Treasury shares | (1,136,188 | ) | (1,136,188 | ) | (968,549 | ) | ||||||
Non-controlling interests | 896,511 | 585,407 | 9,111 | |||||||||
Total equity | 42,107,901 | 39,119,325 | 35,713,027 | |||||||||
|
|
|
|
|
| |||||||
Total liabilities and equity | 605,506,353 | 518,538,117 | 479,588,298 | |||||||||
|
|
|
|
|
| |||||||
| Note: | The consolidated financial information as of September 30, 2020 and December 31, 2019 is based on K-IFRS 1116. The corresponding financial information as of December 31, 2018 has not been restated. |
| 3.1.2. | Consolidated Statements of Comprehensive Income |
| (Unit: in millions of Won, except per share amounts) | ||||||||||||||||
| For the nine months ended September 30, 2020 | For the nine months ended September 30, 2019 | For the year ended December 31, 2019 | For the year ended December 31, 2018 | |||||||||||||
Net interest income | 7,143,391 | 6,868,587 | 9,196,787 | 8,904,928 | ||||||||||||
Net fee and commission income | 2,170,480 | 1,716,494 | 2,355,004 | 2,243,376 | ||||||||||||
Net insurance income | 289,647 | 300,447 | 299,512 | 490,116 | ||||||||||||
Net gains on financial assets/liabilities at fair value through profit or loss | 470,790 | 433,761 | 643,872 | 351,303 | ||||||||||||
Net other operating expenses | (827,700 | ) | (685,108 | ) | (1,063,324 | ) | (1,130,036 | ) | ||||||||
General and administrative expenses | (4,646,217 | ) | (4,456,696 | ) | (6,271,017 | ) | (5,918,512 | ) | ||||||||
Operating profit before provision for credit losses | 4,600,391 | 4,177,485 | 5,160,834 | 4,941,175 | ||||||||||||
Provision for credit losses | (754,292 | ) | (459,888 | ) | (670,185 | ) | (673,694 | ) | ||||||||
Net operating income | 3,846,099 | 3,717,597 | 4,490,649 | 4,267,481 | ||||||||||||
Net non-operating income | 120,377 | 67,298 | 43,337 | 34,051 | ||||||||||||
Profit before income tax | 3,966,476 | 3,784,895 | 4,533,986 | 4,301,532 | ||||||||||||
Income tax expense | (1,040,842 | ) | (1,006,813 | ) | (1,220,787 | ) | (1,239,586 | ) | ||||||||
Profit for the period | 2,925,634 | 2,778,082 | 3,313,199 | 3,061,946 | ||||||||||||
Other comprehensive income (loss) for the period, net of tax | 266,502 | 305,056 | 152,023 | (10,482 | ) | |||||||||||
Total comprehensive income for the period | 3,192,136 | 3,083,138 | 3,465,222 | 3,051,464 | ||||||||||||
Profit attributable to: | 2,925,634 | 2,778,082 | 3,313,199 | 3,061,946 | ||||||||||||
Shareholders of the parent company | 2,877,923 | 2,777,128 | 3,311,828 | 3,061,191 | ||||||||||||
Non-controlling interests | 47,711 | 954 | 1,371 | 755 | ||||||||||||
Total comprehensive income for the period attributable to: | 3,192,136 | 3,083,138 | 3,465,222 | 3,051,464 | ||||||||||||
Shareholders of the parent company | 3,152,913 | 3,081,497 | 3,463,567 | 3,050,805 | ||||||||||||
Non-controlling interests | 39,223 | 1,641 | 1,655 | 659 | ||||||||||||
Earnings per share | ||||||||||||||||
Basic earnings per share (Won) | 7,353 | 7,083 | 8,451 | 7,721 | ||||||||||||
Diluted earnings per share (Won) | 7,280 | 7,032 | 8,389 | 7,676 | ||||||||||||
| Note: | The consolidated financial information for the nine months ended September 30, 2020, the nine months ended September 30, 2019 and the year ended December 31, 2019 is based on K-IFRS 1116. The corresponding financial information for the year ended December 31, 2018 has not been restated. |
| 3.2. | Separate Financial Information |
| 3.2.1. | Separate Statements of Financial Position |
| (Unit: in millions of Won) | ||||||||||||
| As of September 30, 2020 | As of December 31, 2019 | As of December 31, 2018 | ||||||||||
Cash and due from financial institutions | 44,239 | 18,537 | 344,302 | |||||||||
Financial assets at fair value through profit or loss | 466,575 | 413,909 | 289,179 | |||||||||
Loans at amortized cost | 180,000 | 120,000 | 50,000 | |||||||||
Investments in subsidiaries | 26,522,170 | 24,162,116 | 24,062,116 | |||||||||
Property and equipment | 4,005 | 4,170 | 2,185 | |||||||||
Intangible assets | 12,021 | 11,092 | 9,646 | |||||||||
Deferred income tax assets | 2,609 | 7,526 | 8,184 | |||||||||
Other assets | 795,750 | 609,286 | 857,462 | |||||||||
|
|
|
|
|
| |||||||
Total assets | 28,027,369 | 25,346,636 | 25,623,074 | |||||||||
|
|
|
|
|
| |||||||
Debts | 340,000 | — | 300,000 | |||||||||
Debentures | 6,316,734 | 5,543,446 | 5,373,266 | |||||||||
Net defined benefit liabilities | 2,040 | 437 | 183 | |||||||||
Current income tax liabilities | 648,398 | 417,414 | 691,909 | |||||||||
Other liabilities | 166,675 | 203,440 | 186,481 | |||||||||
|
|
|
|
|
| |||||||
Total liabilities | 7,473,847 | 6,164,737 | 6,551,839 | |||||||||
|
|
|
|
|
| |||||||
Share capital | 2,090,558 | 2,090,558 | 2,090,558 | |||||||||
Hybrid financial instrument | 1,197,017 | 399,085 | — | |||||||||
Capital surplus | 14,754,747 | 14,742,814 | 14,742,814 | |||||||||
Accumulated other comprehensive loss | (7,693 | ) | (7,664 | ) | (7,144 | ) | ||||||
Retained earnings | 3,655,081 | 3,093,294 | 3,213,556 | |||||||||
Treasury Shares | (1,136,188 | ) | (1,136,188 | ) | (968,549 | ) | ||||||
|
|
|
|
|
| |||||||
Total equity | 20,553,522 | 19,181,899 | 19,071,235 | |||||||||
|
|
|
|
|
| |||||||
Total liabilities and equity | 28,027,369 | 25,346,636 | 25,623,074 | |||||||||
|
|
|
|
|
| |||||||
| Note: | The separate financial information as of September 30, 2020 and December 31, 2019 is based on K-IFRS 1116. The corresponding financial information as of December 31, 2018 has not been restated. |
| 3.2.2. | Separate Statements of Comprehensive Income |
| (Unit: in millions of Won, except per share amounts) | ||||||||||||||||
| For the nine months ended September 30, 2020 | For the nine months ended September 30, 2019 | For the year ended December 31, 2019 | For the year ended December 31, 2018 | |||||||||||||
Net interest expense | (92,040 | ) | (88,757 | ) | (118,045 | ) | (115,835 | ) | ||||||||
Net fee and commission expense | (6,567 | ) | (4,072 | ) | (6,283 | ) | (5,208 | ) | ||||||||
Net gains on financial assets at fair value through profit or loss | 10,360 | 13,292 | 15,947 | 18,319 | ||||||||||||
Net other operating income | 1,573,528 | 926,934 | 926,934 | 1,089,556 | ||||||||||||
General and administrative expenses | (49,332 | ) | (47,354 | ) | (71,171 | ) | (57,845 | ) | ||||||||
Operating profit before provision for credit losses | 1,435,949 | 800,043 | 747,382 | 928,987 | ||||||||||||
Provision for credit losses | — | — | — | — | ||||||||||||
Operating profit | 1,435,949 | 800,043 | 747,382 | 928,987 | ||||||||||||
Net non-operating income(loss) | 426 | (451 | ) | (541 | ) | (259 | ) | |||||||||
Profit before income tax | 1,436,375 | 799,592 | 746,841 | 928,728 | ||||||||||||
Income tax expense | (403 | ) | (847 | ) | (854 | ) | (2,823 | ) | ||||||||
Profit for the period | 1,435,972 | 798,745 | 745,987 | 925,905 | ||||||||||||
Other comprehensive income (loss) for the period, net of tax | (29 | ) | (61 | ) | (520 | ) | (1,911 | ) | ||||||||
Total comprehensive income for the period | 1,435,943 | 798,684 | 745,467 | 923,994 | ||||||||||||
Earnings per share | ||||||||||||||||
Basic earnings per share (Won) | 3,652 | 2,031 | 1,891 | 2,335 | ||||||||||||
Diluted earnings per share (Won) | 3,616 | 2,017 | 1,877 | 2,322 | ||||||||||||
| Note: | The separate financial information for the nine months ended September 30, 2020, the nine months ended September 30, 2019 and the year ended December 31, 2019 is based on K-IFRS 1116. The corresponding financial information for the year ended December 31, 2018 has not been restated. |
| 3.3. | Other Selected Financial Data |
| 3.3.1. | Won-denominated Liquidity Ratio |
| (Unit: in millions of Won) | ||||||||||||
| As of September 30, 2020 | As of December 31, 2019 | As of December 31, 2018 | ||||||||||
Current assets in Won (A) | 309,407 | 142,683 | 30,150 | |||||||||
Current liabilities in Won (B) | 186,080 | 110,398 | 9,300 | |||||||||
Liquidity ratio (A/B) | 166.28 | % | 129.24 | % | 324.20 | % | ||||||
| Notes: | 1) Based on K-IFRS (on a separate basis). |
2) Calculated based on Won-denominated assets and liabilities due within one month. |
| 3.3.2. | Profitability Ratios |
| (Unit: %) | ||||||||||||
| For the nine months ended September 30, 2020 | For the year ended December 31, 2019 | For the year ended December 31, 2018 | ||||||||||
Net income as a percentage of average total assets (ROA) | 0.70 | 0.66 | 0.66 | |||||||||
Net income as a percentage of average shareholders’ equity (ROE) | 9.76 | 8.93 | 8.82 | |||||||||
| Note: | Based on K-IFRS (on a consolidated basis). |
| 3.3.3. | 20 Largest Exposures of Kookmin Bank by Borrower |
| (As of September 30, 2020) | ||||
| (Unit: in billions of Won) | ||||
Company | Credit Extended | |||
LG Display Co., Ltd. | 1,112 | |||
Samsung Electronics Co., Ltd. | 1,077 | |||
Hyundai Steel Co., Ltd. | 1,008 | |||
Hyundai Heavy Industries Co., Ltd. | 837 | |||
Kia Motors Corporation | 804 | |||
NH-Amundi Asset Management Co., Ltd. | 723 | |||
Samsung Heavy Industries Co., Ltd. | 704 | |||
Hyundai Motor Company | 663 | |||
Kyobo AXA Investment Managers Co., Ltd. | 661 | |||
Lotte Shopping Co., Ltd. | 607 | |||
LG Electronics Inc. | 598 | |||
Lotte Property and Development Co., Ltd. | 587 | |||
Hyundai Capital Services, Inc. | 540 | |||
GS Caltex Corporation | 521 | |||
Samsung SDI Co., Ltd. | 517 | |||
S-Oil Corporation | 473 | |||
CJ Cheiljedang Corp. | 472 | |||
LG Chem Co., Ltd. | 452 | |||
Hanwha Solutions Corporation | 450 | |||
SK Holdings | 435 | |||
|
| |||
Total | 13,241 | |||
|
| |||
| 3.3.4. | 10 Largest Exposures of Kookmin Bank by Chaebol Group |
| (As of September 30, 2020) | ||||
| (Unit: in billions of Won) | ||||
Group | Credit Extended | |||
Hyundai Motor | 4,701 | |||
Samsung | 3,864 | |||
SK | 3,049 | |||
LG | 2,883 | |||
Lotte | 2,579 | |||
Hanwha | 2,076 | |||
Hyundai Heavy Industries | 1,685 | |||
GS | 1,107 | |||
CJ | 1,085 | |||
POSCO | 955 | |||
|
| |||
Total | 23,984 | |||
|
| |||
| 3.3.5. | Kookmin Bank’s Loan Concentration by Industry |
| (As of September 30, 2020) | ||||||||
| (Unit: in billions of Won) | ||||||||
Industry | Total Credit | Percentage of Total Credit | ||||||
Manufacturing | 47,565 | 30.8 | ||||||
Real estate | 33,830 | 21.9 | ||||||
Retail and wholesale | 22,744 | 14.7 | ||||||
Hotel, lodging and food services | 9,814 | 6.3 | ||||||
Financial institutions | 3,524 | 2.3 | ||||||
Construction | 3,521 | 2.3 | ||||||
Others | 33,533 | 21.7 | ||||||
|
|
|
| |||||
Total | 154,531 | 100.0 | ||||||
|
|
|
| |||||
| 3.3.6. | Top 20 Non-Performing Loans of Kookmin Bank |
| (As of September 30, 2020) | ||||||||||
| (Unit: in billions of Won) | ||||||||||
Borrower | Industry | Total Credit | Allowance for Loan Losses | |||||||
Borrower A | Shipbuilding | 51.6 | 17.0 | |||||||
Borrower B | Construction | 40.1 | 39.3 | |||||||
Borrower C | Shipping | 23.8 | 23.3 | |||||||
Borrower D | Construction | 21.1 | 20.7 | |||||||
Borrower E | Manufacturing | 12.9 | 6.3 | |||||||
Borrower F | Retail and wholesale | 12.8 | 10.4 | |||||||
Borrower G | Manufacturing | 9.8 | 3.2 | |||||||
Borrower H | Manufacturing | 9.8 | 9.5 | |||||||
Borrower I | Manufacturing | 9.4 | 3.3 | |||||||
Borrower J | Manufacturing | 9.1 | 5.4 | |||||||
Borrower K | Shipbuilding | 9.0 | 8.6 | |||||||
Borrower L | Manufacturing | 8.6 | 0.9 | |||||||
Borrower M | Health and social services | 6.5 | 0.4 | |||||||
Borrower N | Manufacturing | 6.4 | 5.3 | |||||||
Borrower O | Real estate and leasing | 5.7 | 0.3 | |||||||
Borrower P | Manufacturing | 5.0 | 2.9 | |||||||
Borrower Q | Manufacturing | 4.8 | 2.5 | |||||||
Borrower R | Manufacturing | 4.7 | 3.8 | |||||||
Borrower S | Manufacturing | 4.6 | 2.6 | |||||||
Borrower T | Construction | 4.4 | 4.4 | |||||||
|
|
|
| |||||||
Total | 260.1 | 170.1 | ||||||||
|
|
|
| |||||||
| 3.4. | Other Financial Information |
See Exhibits 99.1 and 99.2 attached hereto for our consolidated and separate financial statements and relevant notes, which have been prepared in accordance with K-IFRS and reviewed by our independent auditors as stated in their review reports. The review reports will also be available on our website at www.kbfg.com.
| 4. | Independent Public Accountants |
| 4.1. | Audit / Review Services |
| (Unit: in millions of Won) | ||||||||||||||||||||
Period | Auditor | Activity | Agreed Per Contract(1) | Actual(2) | ||||||||||||||||
| Compensation(3) | Estimated Hours | Compensation(3) | Accrued Hours | |||||||||||||||||
January 1 to September 30, 2020 | KPMG Samjong Accounting Corp. | Quarterly, half-year and annual review & audit, review of internal accounting management system (including audit of internal control over financial reporting) | 1,246 | 11,570 | 1,145 | 8,206 | ||||||||||||||
January 1 to September 30, 2020 | KPMG Samjong Accounting Corp. | Additional audit services provided in connection with the Company’s acquisition of Prudential Life Insurance Company of Korea, Ltd. | 481 | 4,829 | 176 | 1,534 | ||||||||||||||
January 1 to December 31, 2019 | Samil PricewaterhouseCoopers | Quarterly, half-year and annual review & audit, review of internal accounting management system (including audit of internal control over financial reporting) | 1,081 | 11,234 | 1,081 | 10,832 | ||||||||||||||
January 1 to December 31, 2018 | Samil PricewaterhouseCoopers | Quarterly, half-year and annual review & audit, review of internal accounting management system (including audit of internal control over financial reporting) | 949 | 11,034 | 949 | 9,820 | ||||||||||||||
| Notes: | (1) Total compensation and estimated hours established at the time of the execution of the audit and review services contract. |
| (2) | Actual compensation paid and hours accrued from January 1 of each applicable year to the date of the audit or review report issued during such year. |
| (3) | Excluding value-added taxes. |
| 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 September 30, 2020 | KPMG Samjong Accounting Corp. | PCAOB audit of consolidated financial statements and internal control over financial reporting | May 1, 2020 to April 30, 2021 | 662 | ||||||
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 | ||||||
| Note: | (1) Total compensation (excluding value-added taxes) established at the time of the execution of the audit and review services contract. |
| 4.3. | Change in Auditor |
Pursuant to the Act on External Audit of Stock Companies and the related regulations thereunder, the Securities and Futures Commission of the Financial Services Commission designated KPMG Samjong Accounting Corp. as the new external auditor for the Company for the fiscal years ending December 31, 2020, 2021 and 2022. As such, the external auditor for the Company and its subsidiaries (except Prudential Life Insurance Company of Korea, Ltd. which will keep Samil Pricewaterhouse Coopers as its external auditor) for the fiscal year ending December 31, 2020 has been 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 September 30, 2020, our board of directors consisted of nine directors, comprising one executive director, one non-standing director and seven non-executive directors. The following committees currently serve under our board of directors:
| • | Audit Committee; |
| • | Risk Management Committee; |
| • | Evaluation & Compensation Committee; |
| • | Non-Executive Director Nominating Committee; |
| • | Audit Committee Member Nominating Committee (ad hoc committee) ; |
| • | CEO Nominating Committee; |
| • | Subsidiaries’ CEO Director Nominating Committee; and |
| • | ESG 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 an as-needed basis.
The following table shows a list of audit committee requirements under Articles 415 and 542 of the Commercial Act and how we fulfill each requirement as of September 30, 2020.
The Commercial Act Requirements | KB Financial Group | |
| The Audit Committee must consist of three or more directors. | We have four Audit Committee members. | |
| At least two-thirds of the Audit Committee members must be non-executive directors. | All four Audit Committee members, including the chairman of the committee, are non-executive directors. | |
| The chairman of the Audit Committee must be a non-executive director. | ||
| At least one Audit Committee member must be an accounting or financial expert. | Three Audit Committee members (Kyung Ho Kim, Myung Hee Choi and Gyutaeg Oh) 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 | 9 (7) | 3,000 | — | |||||||||
| Notes: | (1) Represents the total number of applicable persons as of September 30, 2020. |
| (2) | Represents the aggregate amount for all directors (including non-executive directors). Excludes compensation in the form of long-term performance-based stock grants. |
| 5.3.2. | Total Amount of Compensation Paid |
| (As of September 30, 2020) | (Unit: in millions of Won) | |||||||||||
Total number of persons(1) | Total payment(2)(3) | Average payment per person(4) | Notes | |||||||||
9 | 1,263 | 140 | — | |||||||||
| Notes: | (1) Represents the total number of applicable persons as of September 30, 2020. |
| (2) | Represents the total amount paid (rounded to the nearest million) for the nine months ended September 30, 2020. |
| (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 nine months ended September 30, 2020, divided by (ii) the number of applicable persons for the applicable reporting period. |
| 5.3.3. | Compensation Breakdown |
| (As of September 30, 2020) | (Unit: in millions of Won) | |||||||||||||||
| Total number of persons(1) | Total payment(2)(3) | Average payment per person(4) | Notes | |||||||||||||
Registered Directors (excluding non-executive directors and Audit Committee members) | 2 | 807 | 404 | — | ||||||||||||
Non-executive Directors (excluding Audit Committee members) | 3 | 192 | 64 | — | ||||||||||||
Audit Committee members | 4 | 263 | 65 | — | ||||||||||||
Internal Auditor | — | — | — | — | ||||||||||||
| Notes: | (1) Represents the total number of applicable persons as of September 30, 2020. |
| (2) | Represents the total amount paid (rounded to the nearest million) for the nine months ended September 30, 2020. |
| (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 nine months ended September 30, 2020, divided by (ii) the number of applicable persons for the applicable reporting period. |
| 5.4. | Highest-Paid Individuals |
Not included in quarterly business reports.
| 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 September 30, 2020 are as follows.
| 1) | Kookmin Bank (100.00%) |
| 2) | KB Securities Co., Ltd. (100.00%) |
| 3) | KB Insurance Co., Ltd. (100.00%) |
| 4) | KB Kookmin Card Co., Ltd. (100.00%) |
| 5) | Prudential Life Insurance Company of Korea, Ltd. (100.00%) |
| 6) | KB Asset Management Co., Ltd. (100.00%) |
| 7) | KB Capital Co., Ltd. (100.00%) |
| 8) | KB Life Insurance Co., Ltd. (100.00%) |
| 9) | KB Real Estate Trust Co., Ltd. (100.00%) |
| 10) | KB Savings Bank Co., Ltd. (100.00%) |
| 11) | KB Investment Co., Ltd. (100.00%) |
| 12) | KB Data Systems Co., Ltd. (100.00%) |
| 13) | KB Credit Information Co., Ltd. (100.00%) |
| 6. | Directors, Senior Management and Employees |
| 6.1. | Executive Directors |
As of September 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 September 30, 2020 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 September 30, 2020, we had one non-standing director. The name, position and the end of the term of our non-standing director and the number of shares of our common stock he owned as of September 30, 2020 are set forth below.
Name | Date of Birth | Position | Common Shares Owned | End of Term | ||||||||||||
Yin Hur | December 1961 | Non-standing Director | 13,500 | November 20, 2020 | ||||||||||||
| 6.3. | Non-executive Directors |
As of September 30, 2020, we had seven non-executive directors. The name, position and the end of the term of our non-executive directors and the number of shares of our common stock they respectively owned as of September 30, 2020 were as follows.
Name | Date of Birth | Position | Common Shares Owned | End of Term | ||||||
Suk Ho Sonu | September 1951 | Non-executive Director | 1,300 | March 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 September 30, 2020, the following non-executive director also served as a director at another company.
Name | Company | Position | Appointment Date | |||
Kouwhan Jeong | Nambujeil Law and Notary Office Inc. | Co-president Attorney at Law | May 2016 |
| 6.4. | Senior Management |
Members of our senior management as of September 30, 2020 are as follows. The number of common shares owned is as of September 30, 2020.
Name | Date of Birth | Position | Common Shares Owned | End of Term | ||||||
Chang Kwon Lee | November 1965 | Senior Executive Vice President, Chief Strategy Officer and Head of Global Business Unit | 2,010 | December 31, 2020 | ||||||
Ki-Hwan Kim | March 1963 | Senior Executive Vice President and Chief Finance Officer | 2,662 | December 31, 2020 | ||||||
Nam Jong Seo | June 1963 | Senior Executive Vice President and Chief Risk Management Officer | 1,119 | December 31, 2021 | ||||||
Pil Kyu Im | March 1964 | Senior Executive Vice President and Chief Human Resources Officer | 1,005 | December 31, 2020 | ||||||
Kyung Yup Cho | September 1961 | Senior Executive Vice President; KB Research | 1,500 | December 31, 2020 | ||||||
Young Hyuk Jo | April 1963 | Senior Executive Vice President; Audit Department | 1,961 | 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 | 1,371 | December 31, 2020 | ||||||
Seok Mun Choi | August 1968 | Managing Director and Head of Office of Board of Directors | 775 | December 31, 2021 | ||||||
Soon Bum Kwon | October 1966 | Managing Director | 1,500 | 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 | 15,468 | 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 | 3,325 | December 31, 2020 | ||||||
Young Gil Kim | January 1963 | Head of Wealth Management Business Unit | 229 | December 31, 2020 | ||||||
Woon Tae Kim | May 1963 | Head of Small and Medium Enterprise Business Unit | 1,348 | December 31, 2020 | ||||||
Mun-Cheol Jeong | August 1968 | Chief Public Relation Officer | 1,486 | 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 | 1,508 | December 31, 2020 | ||||||
Jin Soo Yoon | February 1964 | Chief Data Officer | 100 | March 31, 2021 | ||||||
Sang-Hyeon Woo | February 1964 | Senior Managing Director; Corporate and Investment Banking Business Unit | 348 | December 31, 2020 | ||||||
Jeong Ha | January 1967 | Senior Managing Director; Capital Market Business Unit | — | December 31, 2020 | ||||||
Chai Hyun Sung | September 1965 | Senior Executive Vice President; Retail Customer Business Unit | 7,086 | December 31, 2020 | ||||||
Yun Sang Song | July 1964 | Senior Managing Director; Insurance Business Unit | — | December 31, 2020 | ||||||
Jae Young Choi | June 1967 | Head of Pension Business Division | 665 | May 26, 2021 | ||||||
Jin Gyu Maeng | January 1966 | Head of Office of Planning and Coordination | 800 | December 31, 2020 | ||||||
As of September 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 September 30, 2020.
| (Unit: in millions of Won) | ||||||||||||
Number of Employees(A)(1) | Average Tenure of Employees(2) | Total Amount of Annual Salaries(B) | Average Annual Salary per Person(B/A) | |||||||||
164 | | 4 years (14 years and 11 months | ) | 19,178 | (3) | 117 | (3) | |||||
| Notes: | (1) Includes executive officers. |
| (2) | The duration in parentheses includes tenure at our subsidiaries. |
| (3) | Includes retroactive payments of wage increases and bonuses from 2019. The average annual salary per person excluding such amounts is Won 106.4 million. |
The following table shows information regarding our executive officers and compensation paid to them as of September 30, 2020.
| (Unit: in millions of Won) | ||||||||
Number of Executive Officers(A)(1) | Total Amount of Annual Salaries(B) | Average Annual Salary per Person(B/A) | ||||||
10 | 3,290 | 329 | ||||||
| Note: | (1) Excludes 16 executive officers who serve primarily as executive officers at our subsidiaries. |
| 7. | Major Shareholders and Related Party Transactions |
| 7.1. | Major Shareholders |
The following table presents information regarding holders of 5% or more of our total issued shares as of September 30, 2020.
| (Unit: shares, %) | ||||||||
Name | Number of Shares of Common Stock | Percentage of Total Issued Shares(1) | ||||||
Korean National Pension Service(2) | 41,462,588 | 9.97 | ||||||
JP Morgan Chase Bank, N.A.(3)(4) | 26,622,633 | 6.40 | ||||||
| Notes: | (1) Based on 415,807,920 shares of our common stock issued. |
| (2) | The above number of shares and the percentage of total issued shares held by the Korean National Pension Service are based on disclosure made by the Korean National Pension Service in a statement of acquisition filing on February 7, 2020. Based on our shareholder registry as of October 12, 2020, the Korean National Pension Service holds 9.96% of our total issued shares. |
| (3) | The above number of shares and the percentage of total issued shares held by JP Morgan Bank, N.A. are based on our shareholder registry as of December 31, 2019. Based on our shareholder registry as of October 12, 2020, JP Morgan Chase Bank, N.A. holds 5.77% of our total issued shares. |
| (4) | Depositary under the Company’s ADR program. The voting rights are held by ADR holders. |
| 7.2. | Changes in the Largest Shareholder |
| (As of September 30, 2020) | (Unit: shares, %) | |||||||||||
Name of Largest Shareholder | Date of Change in Largest Shareholder/ Date of Change in Number of Shares Owned | Number of Shares of Common Stock(1) | Percentage of Total Issued Shares(2) | |||||||||
Korean National Pension Service | December 31, 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 | |||||||||
Korean National Pension Service | February 1, 2020 | 41,462,588 | (3) | 9.97 | ||||||||
Korean National Pension Service | October 12, 2020 | 41,402,150 | (4) | 9.96 | ||||||||
| Notes: | (1) Based on our shareholder registry as of the end of each applicable year unless specified otherwise. |
| (2) | 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 |
| (3) | Based on disclosure made by the Korean National Pension Service in a statement of acquisition filing on February 7, 2020. |
| (4) | Based on our shareholder registry as of October 12, 2020. |
| 7.3. | Employee Stock Ownership Association |
| (As of September 30, 2020) | (Unit: shares) | |||
Company Name | Number of Shares of Common Stock Owned | |||
KB Financial Group Inc. | 37,656 | |||
Kookmin Bank | 4,853,605 | |||
KB Securities Co., Ltd. | 21,986 | |||
KB Insurance Co., Ltd. | 270,507 | |||
KB Kookmin Card Co., Ltd. | 245,687 | |||
Prudential Life Insurance Company of Korea, Ltd. | — | |||
KB Asset Management Co., Ltd. | 7,728 | |||
KB Capital Co., Ltd. | 23,395 | |||
KB Life Insurance Co., Ltd. | 22,965 | |||
KB Real Estate Trust Co., Ltd. | 12,980 | |||
KB Savings Bank Co., Ltd. | 4,858 | |||
KB Investment Co., Ltd. | 1,292 | |||
KB Data Systems Co., Ltd. | 13,144 | |||
KB Credit Information Co., Ltd. | 9,404 | |||
|
| |||
Total | 5,525,207 | |||
|
| |||
| 7.4. | Investments in Affiliated Companies |
| (As of September 30, 2020) | (Units: shares, %, millions of Won) | |||||||||||||||||||
Company Name | Ending Balance | Total assets as of the latest fiscal year(1) | Net income(loss) for the latest fiscal year(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 | |||||||||||||||
Prudential Life Insurance Company of Korea, Ltd. | 15,000,000 | 100 | 2,310,054 | 21,084,604 | (2) | 140,755 | (2) | |||||||||||||
KB Asset Management Co., Ltd. | 7,667,550 | 100 | 96,312 | 310,018 | 48,899 | |||||||||||||||
KB Capital Co., Ltd. | 25,227,566 | 100 | 673,811 | 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 | 41,690 | 4,664 | |||||||||||||||
KB Credit Information Co., Ltd. | 1,252,400 | 100 | 23,621 | 27,834 | (256 | ) | ||||||||||||||
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Total | — | — | 26,522,170 | — | — | |||||||||||||||
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| Notes: | (1) Based on K-IFRS (on a consolidated basis) unless otherwise specified. |
| (2) | Based on K-IFRS (on a separate 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 Amount | Issue Date | Interest Rate | Maturity Date | Use of Proceeds | |||||||||||
KB Capital Co., Ltd. | Subsidiary | No. 299 Private Placement of Capital Securities in Won | 50 | March 27, 2015 | | 6.548 | %(1) | March 27, 2045 (may be extended) | Working capital | |||||||||
| Note: | (1) The increase in interest rate is due to the non-exercise of the option to redeem. |
| (Unit: in billions of Won) | ||||||||||||||||||
Issuer | Relationship | Type | Issue Amount | Issue Date | Interest Rate | Maturity Date | Use of Proceeds | |||||||||||
KB Capital Co., Ltd. | Subsidiary | No. 320 Private Placement of Capital Securities in Won | 50 | September 24, 2015 | | 5.989 | %(1) | September 24, 2045 (may be extended) | Working capital | |||||||||
| Note: | (1) The increase in interest rate is due to the non-exercise of the option to redeem. |
| (Unit: in billions of Won) | ||||||||||||||||||
Issuer | Relationship | Type | Issue Amount | Issue Date | Interest Rate | Maturity Date | Use of Proceeds | |||||||||||
KB Capital Co., Ltd. | Subsidiary | No. 343 Private Placement of Capital Securities in Won | 50 | March 29, 2016 | 4.396 | % | March 29, 2046 (may be extended) | Working capital | ||||||||||
| (Unit: in billions of Won) | ||||||||||||||||||
Issuer | Relationship | Type | Issue Amount | Issue Date | Interest Rate | Maturity Date | Use of Proceeds | |||||||||||
KB Capital Co., Ltd. | Subsidiary | No. 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 Amount | Issue Date | Interest Rate | Maturity Date | Use of Proceeds | |||||||||
KB Capital Co., Ltd. | Subsidiary | No. 367 Private Placement of Capital Securities in Won | 50 | November 28, 2016 | 4.744 | % | November 28, 2046 (may be extended) | Working capital | ||||||||
| (Unit: in billions of Won) | ||||||||||||||||
Issuer | Relationship | Type | Issue Amount | Issue Date | Interest Rate | Maturity Date | Use of Proceeds | |||||||||
KB Capital Co., Ltd. | Subsidiary | No. 378 Private Placement of Capital Securities in Won | 50 | April 27, 2017 | 4.431 | % | April 27, 2047 (may be extended) | Working capital | ||||||||
| (Unit: in billions of Won) | ||||||||||||||||
Issuer | Relationship | Type | Issue Amount | Issue Date | Interest Rate | Maturity Date | Use of Proceeds | |||||||||
KB Capital Co., Ltd. | Subsidiary | No. 460 Private Placement of Capital Securities in Won | 100 | September 25, 2020 | 3.376 | % | September 25, 2050 (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 Rate | Maturity Date | |||||||
KB Investment Co., Ltd. | Subsidiary | Loans(1) | 10 | 10 | July 14, 2017 | 2.141%(2) | July 12, 2021 | |||||||
| Notes: | (1) Unsecured credit loans. |
| (2) | Changed from 2.195% to 2.141% upon extension of the loans on July 13, 2020. |
| (Unit: in billions of Won) | ||||||||||||||
Name | Relationship | Account | Loan Amount | Current | Credit Offering | Interest Rate | Maturity Date | |||||||
KB Investment Co., Ltd. | Subsidiary | Loans(1) | 40 | 40 | July 13, 2018 | 2.141%(2) | July 12, 2021 | |||||||
| Notes: | (1) Unsecured credit loans. |
| (2) | Changed from 2.195% to 2.141% upon extension of the loans on July 13, 2020. |
| (Unit: in billions of Won) | ||||||||||||||
Name | Relationship | Account | Loan Amount | Current | Credit Offering | Interest Rate | Maturity Date | |||||||
KB Investment Co., Ltd. | Subsidiary | Loans(1) | 70 | 70 | March 8, 2019 | 2.189%(2) | March 8, 2021 | |||||||
| Notes: | (1) Unsecured credit loans. |
| (2) | Changed from 2.176% to 2.189% upon extension of the loans on March 9, 2020. |
| (Unit: in billions of Won) | ||||||||||||||
Name | Relationship | Account | Loan Amount | Current | Credit Offering | Interest Rate | Maturity Date | |||||||
KB Investment Co., Ltd. | Subsidiary | Loans(1) | 30 | 30 | March 9, 2020 | 2.189% | March 8, 2021 | |||||||
| Note: | (1) Unsecured credit loans. |
| (Unit: in billions of Won) | ||||||||||||||
Name | Relationship | Account | Loan Amount | Current | Credit Offering | Interest Rate | Maturity Date | |||||||
KB Investment Co., Ltd. | Subsidiary | Loans(1) | 30 | 30 | July 13, 2020 | 2.141% | July 12, 2021 | |||||||
| Note: | (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: November 16, 2020 | By: | /s/ Ki-Hwan Kim | ||||
| (Signature) | ||||||
| Name: Ki-Hwan Kim | ||||||
| Title: | Senior Executive Vice President and Chief Finance Officer | |||||
