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 March 2022
Commission File Number: 000-53445
KB Financial Group Inc.
(Translation of registrant’s name into English)
26, Gukjegeumyung-ro 8-gil, Yeongdeungpo-gu, Seoul 07331, Korea
(Address of principal executive office)
Indicate by check mark whether the registrant files or will file annual reports under cover of Form 20-F or Form 40-F.
Form 20-F ☒ Form 40-F ☐
Indicate by check mark if the registrant is submitting the Form 6-K in paper as permitted by Regulation S-T Rule 101(b)(1): ☐
Note: Regulation S-T Rule 101(b)(1) only permits the submission in paper of a Form 6-K if submitted solely to provide an attached annual report to security holders.
Indicate by check mark if the registrant is submitting the Form 6-K in paper as permitted by Regulation S-T Rule 101(b)(7): ☐
Note: Regulation S-T Rule 101(b)(7) only permits the submission in paper of a Form 6-K if submitted to furnish a report or other document that the registrant foreign private issuer must furnish and make public under the laws of the jurisdiction in which the registrant is incorporated, domiciled or legally organized (the registrant’s “home country”), or under the rules of the home country exchange on which the registrant’s securities are traded, as long as the report or other document is not a press release, is not required to be and has not been distributed to the registrant’s security holders, and, if discussing a material event, has already been the subject of a Form 6-K submission or other Commission filing on EDGAR.
Summary of Business Report for Fiscal Year 2021
On March 17, 2022, KB Financial Group Inc. (“KB Financial Group” or the “Group”) filed its business report for the fiscal year ended December 31, 2021 (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 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. (“Prudential Life Insurance”) as a first-tier subsidiary
| • | September 2, 2020 |
Added PT Bank Bukopin Tbk as a second-tier subsidiary (renamed PT Bank KB Bukopin, Tbk. on February 8, 2021)
| • | October 28, 2020 |
Added KB Material and Parts Private Equity Fund I as a second-tier subsidiary
| • | December 4, 2020 |
Added FineKB Private Equity Fund I as a second-tier subsidiary
| • | December 16, 2020 |
Added KB FINA JOINT STOCK COMPANY as a second-tier subsidiary
| • | December 23, 2020 |
Added KB Bank Myanmar Co., Ltd. as a second-tier subsidiary
| • | January 15, 2021 |
Added KB Bio Private Equity Fund III as a second-tier subsidiary
| • | January 29, 2021 |
Added J Fintech Co., Ltd as a second-tier subsidiary (renamed KB J Capital Co., Ltd. on February 16, 2021)
| • | March 2, 2021 |
Added PT KB Data Systems Indonesia as a second-tier subsidiary
| • | September 23, 2021 |
Added KB Bio Global Expansion Private Equity Fund I as a second-tier subsidiary
| • | October 8, 2021 |
Added KB Healthcare Co., Ltd. as a second-tier subsidiary
| • | December 24, 2021 |
Added KB Co-investment Private Equity Fund I as a second-tier subsidiary
| 1.3. | Overview of the Business Group |
| (As of December 31, 2021) | ||||||
Type | Name of Company | Controlling Company | Remarks | |||
Holding Company | KB Financial Group | - | Listed | |||
1st Tier Subsidiaries | Kookmin Bank | KB Financial Group | Not listed | |||
| KB Securities Co., Ltd. | KB Financial Group | Not listed | ||||
| KB Insurance Co., Ltd. | KB Financial Group | Not listed | ||||
| KB Kookmin Card Co., Ltd. | KB Financial Group | Not listed | ||||
| Prudential Life Insurance Company of Korea, Ltd. | KB Financial Group | Not listed | ||||
| KB Asset Management Co., Ltd. | KB Financial Group | Not listed | ||||
| KB Capital Co., Ltd. | KB Financial Group | Not listed | ||||
| KB Life Insurance Co., Ltd. | KB Financial Group | Not listed | ||||
| KB Real Estate Trust Co., Ltd. | KB Financial Group | Not listed | ||||
| KB Savings Bank Co., Ltd. | KB Financial Group | Not listed | ||||
| KB Investment Co., Ltd. | KB Financial Group | Not listed | ||||
| KB Data Systems Co., Ltd. | KB Financial Group | Not listed | ||||
| KB Credit Information Co., Ltd. | KB Financial Group | Not listed | ||||
2nd Tier Subsidiaries | Kookmin Bank Cambodia PLC. | Kookmin Bank | Not listed (Overseas) | |||
| Kookmin Bank (China) Ltd. | Kookmin Bank | Not listed (Overseas) | ||||
| KB Microfinance Myanmar Co., Ltd. | Kookmin Bank | Not listed (Overseas) | ||||
| KB Bank Myanmar Co., Ltd. | Kookmin Bank | Not listed (Overseas) | ||||
| PRASAC Microfinance Institution PLC. | Kookmin Bank | Not listed (Overseas) | ||||
| PT Bank KB Bukopin Tbk.(1) | Kookmin Bank | Listed (Overseas) | ||||
| KBFG Securities America Inc. | KB Securities | Not listed (Overseas) | ||||
| KB Securities Hong Kong Ltd. | KB Securities | Not listed (Overseas) | ||||
| Keystone-Hyundai Securities No. 1 Private Equity Fund(2) | KB Securities | Not listed | ||||
| KB SECURITIES VIETNAM JOINT STOCK COMPANY | KB Securities | Not listed (Overseas) | ||||
| KB-TS Technology Venture Private Equity Fund | KB Securities | Not listed | ||||
| KB-Stonebridge Secondary Private Equity Fund | KB Securities | Not listed | ||||
| KB-SPROTT Renewable Private Equity Fund I | KB Securities | Not listed | ||||
| KB-SP Private Equity Fund IV | KB Securities | Not listed | ||||
| KB-NAU Special Situation Corporate Restructuring Private Equity Fund | KB Securities | Not listed | ||||
| KB Material and Parts Private Equity Fund I | KB Securities | Not listed | ||||
| KB FINA JOINT STOCK COMPANY | KB Securities | Not listed (Overseas) | ||||
| KB Bio Private Equity Fund III | KB Securities | Not listed | ||||
| KB Claims Survey & Adjusting Co., Ltd. | KB Insurance | Not listed | ||||
| KB Sonbo CNS | KB Insurance | Not listed | ||||
| Leading Insurance Services, Inc. | KB Insurance | Not listed (Overseas) | ||||
| KBFG Insurance (China) Co., Ltd.(3) | KB Insurance | Not listed (Overseas) | ||||
| PT. KB Insurance Indonesia | KB Insurance | Not listed (Overseas) | ||||
| KB Golden Life Care Co., Ltd. | KB Insurance | Not listed | ||||
| KB Healthcare Co., Ltd. | KB Insurance | Not listed | ||||
| KB Daehan Specialized Bank PLC. | KB Kookmin Card | Not listed (Overseas) | ||||
| PT KB Finansia Multi Finance | KB Kookmin Card | Not listed (Overseas) | ||||
| KB J Capital Co., Ltd(4) | KB Kookmin Card | Not listed (Overseas) | ||||
| KB Asset Management Singapore Pte. Ltd. | KB Asset Management | Not listed (Overseas) | ||||
| KBAM Shanghai Advisory Services Co., Ltd. | KB Asset Management | Not listed (Overseas) | ||||
KB Co-investment Private Equity Fund I | KB Asset Management | Not listed | ||||
| KB KOLAO LEASING Co., Ltd. | KB Capital | Not listed (Overseas) | ||||
| PT Sunindo Kookmin Best Finance | KB Capital | Not listed (Overseas) | ||||
| KoFC POSCO HANWHA KB Shared Growth No. 2. Private Equity Fund | KB Investment | Not listed | ||||
| KoFC Value-up Private Equity Fund | KB Investment | Not listed | ||||
| FineKB Private Equity Fund I | KB Investment | Not listed | ||||
| KB Bio Global Expansion Private Equity Fund I | KB Investment | Not listed | ||||
| PT KB Data Systems Indonesia | KB Data Systems | Not listed (Overseas) | ||||
3rd Tier Subsidiaries | PT Bukopin Finance | PT Bank KB Bukopin Tbk. | Not listed (Overseas) | |||
| PT Bank Syariah Bukopin | PT Bank KB Bukopin Tbk. | Not listed (Overseas) | ||||
| Mangrove Master Fund | KB Asset Management Singapore Pte. Ltd. | Not listed (Overseas) | ||||
| Mangrove Feeder Fund | KB Asset Management Singapore Pte. Ltd. | Not listed (Overseas) | ||||
| Notes: | (1) Renamed to PT Bank KB Bukopin, Tbk. from PT Bank Bukopin, Tbk. on February 8, 2021 |
(2) Currently in the process of being liquidated |
(3) Renamed to KBFG Insurance (China) Co., Ltd. from LIG Insurance (China) Co., Ltd. on April 9, 2021 |
(4) Renamed to KB J Capital Co., Ltd from J Fintech Co., Ltd on February 16, 2021 |
| 1.4. | Capital Structure |
| 1.4.1. | Common Shares |
Changes in Capital
| (As of December 31, 2021) | (Unit: Won, shares) | |||||||||||||||
Date | Type | Number of Shares Issued or Cancelled | Par Value | Price | Remarks | |||||||||||
September 29, 2008 | Common Stock | 356,351,693 | 5,000 | 48,444 | Establishment of the Company | |||||||||||
September 2, 2009 | Common Stock | 30,000,000 | 5,000 | 37,250 | % increase in number of common shares: 8.41865% | |||||||||||
October 19, 2016 | Common Stock | 31,759,844 | 5,000 | 35,474 | % increase in number of common shares: 8.22045% | |||||||||||
December 12, 2019 | Common Stock | 2,303,617 | 5,000 | — | Share Cancellation(1) | |||||||||||
| Note: (1) | The cancelled shares constituted treasury shares acquired pursuant to a resolution of the board of directors of the Company within the limits of profit available for dividend payment, and as such, there was no change in paid-in capital. |
Number of Shares
| (As of December 31, 2021) | (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 December 31, 2021 (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 | — | ||||||||||
| Notes: (1) | 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) | On February 14, 2022, the Company cancelled 3,455,426 shares of its treasury shares, and as a result, the Company has a total of 412,352,494 issued shares and 22,718,159 treasury shares as of March 17, 2022. |
1.4.2. Voting Rights
| (As of December 31, 2021) | (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 | — | — | ||||||
| Notes: (1) | 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 the Korea Securities Depositary and will be disposed upon the exercise of the exchange option of the exchangeable bonds. |
| (2) | On February 14, 2022, the Company cancelled 3,455,426 shares of its treasury shares, and as a result, the Company has a total of 412,352,494 issued shares and 22,718,159 treasury shares as of March 17, 2022. |
| 1.5. | Dividends |
KB Financial Group maintains a progressive dividend policy and aims to increase its payout ratio to 30% in the mid- to long-term. With regard to the acquisition and cancellation of treasury shares, KB Financial Group plans to consider using treasury shares in its capital policy to improve shareholder return once market uncertainties, including those related to COVID-19, have been alleviated.
Although KB Financial Group has continued to increase its payout ratio, for example, from 24.8% in 2018 to 26% in 2019, it has decided on a payout ratio of 20% in 2020 based on the Financial Services Commission’s recommendation to temporarily limit the payout ratio to 20% in consideration of uncertainties related to the COVID-19 pandemic.
Following the termination of the Financial Services Commission’s recommendation as described above on June 25, 2021, KB Financial Group, for the first time in its history, announced a quarterly dividend of Won 750 per share as of June 30, 2021. KB Financial Group increased its payout ratio from 20% in 2020 to 26% in 2021, which was the same level of payout ratio as 2019. It will continue to strive to improve its shareholder value by pursuing various shareholder return policies, including a progressive dividend policy, regularization of quarterly dividends, and the acquisition and/or cancellation of its treasury shares.
| (Unit: in millions of Won, except per share amounts) | ||||||||||||||||
Items | January 1, 2021 to December 31, 2021(1)(2) | January 1, 2020 to December 31, 2020 | January 1, 2019 to December 31, 2019 | |||||||||||||
Par value per share (Won) |
| 5,000 | 5,000 | 5,000 | ||||||||||||
(Consolidated) Net income |
| 4,409,543 | 3,455,151 | 3,311,828 | ||||||||||||
(Consolidated) Earnings per share (Won) |
| 11,134 | 8,809 | 8,451 | ||||||||||||
Total cash dividends |
| 1,145,525 | 689,653 | 861,092 | ||||||||||||
Total stock dividends |
| — | — | — | ||||||||||||
(Consolidated) Cash dividend payout ratio (%) |
| 26.0 | 20.0 | 26.0 | ||||||||||||
Cash dividend yield (%) | Common Shares | 5.2 | 3.9 | 4.5 | ||||||||||||
| — | — | — | — | |||||||||||||
Stock dividend yield (%) | Common Shares | — | — | — | ||||||||||||
| — | — | — | — | |||||||||||||
Cash dividend per share (Won) | Common Shares | 2,940 | 1,770 | 2,210 | ||||||||||||
| — | — | — | — | |||||||||||||
Stock dividend per share | Common Shares | — | — | — | ||||||||||||
| — | — | — | — | |||||||||||||
Notes: | (1) | The dividends for this period are based on amounts prior to their approval at the annual general meeting of shareholders. If such proposal is rejected or modified, then KB Financial Group will disclose such matter through a separate amendment filing. |
| (2) | Includes the quarterly dividend amount of Won 292,226 million (Won 750 per common share) for the first half of Fiscal Year 2021. |
| (3) | Consolidated Net Income for Fiscal Years 2020 and 2019 have been restated retrospectively as Won 3,468,448 million (consolidated earnings per share of Won 8,843, consolidated cash dividend payout ratio of 19.9%) and Won 3,311,257 million (consolidated earnings per share of Won 8,451, consolidated cash dividend payout ratio of 26.0%), respectively, to reflect the accounting policy changes in connection with the IFRIC decision regarding K-IFRS No. 1019. |
| 1.6. | Amendments to the Articles of Incorporation |
The Company’s Articles of Incorporation were most recently amended on March 20, 2020.
Date | Shareholder meeting through which the amendments were approved and ratified | Major changes | Notes | |||
| March 20, 2020 | Annual General Meeting of Shareholders for Fiscal Year 2019 | Establishment of the ESG Committee within the board of directors through the amendment of article 48 | Establishment of the basis for creating a new committee within the board of directors | |||
| March 27, 2019 | Annual General Meeting of Shareholders for Fiscal Year 2018 | Establishment of the basis for electronic registration of shares and bonds, and modification of the processing activities of transfer agents through the amendment of articles 9, 16, 17, 19 and 22 | Amendment to articles pursuant to enforcement of the Act on Electronic Registration of Stocks, Bonds, Etc. (Effective as of September 2019) | |||
| March 23, 2018 | Annual General Meeting of Shareholders for Fiscal Year 2017 | Partition of the corporate governance committee according to its different functions, and implementation of changes in the appointment process of the external auditor and the shareholder meeting through which such changes must be reported, through the amendment of articles 48, 52, 55 and 56 | Establishment of the basis for creating and abolishing committees within the board of directors and;
amendment to articles pursuant to the Act on the External Audit of Stock Companies, Etc. (Effective as of November 2018) | |||
| 2. | Business |
| 2.1. | Results of Operations |
| (Unit: in millions of Won) | ||||||||||||
| For the year ended December 31, 2021 | For the year ended December 31, 2020 | For the year ended December 31, 2019 | ||||||||||
Net interest income | 11,229,572 | 9,722,274 | 9,196,787 | |||||||||
Interest income | 15,210,878 | 14,485,747 | 14,639,187 | |||||||||
Interest expense | (3,981,306) | (4,763,473) | (5,442,400) | |||||||||
Net fee and commission income | 3,625,583 | 2,958,939 | 2,355,004 | |||||||||
Fee and commission income | 5,323,606 | 4,527,024 | 3,879,247 | |||||||||
Fee and commission expense | (1,698,023) | (1,568,085) | (1,524,243) | |||||||||
Net insurance income | 556,711 | 299,993 | 299,512 | |||||||||
Insurance income | 16,107,858 | 14,386,640 | 12,317,182 | |||||||||
Insurance expense | (15,551,147) | (14,086,647) | (12,017,670) | |||||||||
Net gains on financial assets/liabilities at fair value through profit or loss | 995,304 | 1,011,366 | 643,872 | |||||||||
Net other operating expenses | (1,923,567) | (1,499,930) | (1,063,324) | |||||||||
General and administrative expenses | (7,200,853) | (6,814,812) | (6,271,805) | |||||||||
Operating profit before provision for credit losses | 7,282,750 | 5,677,830 | 5,160,046 | |||||||||
Provision for credit losses | (1,185,133) | (1,043,498) | (670,185) | |||||||||
Net operating profit | 6,097,617 | 4,634,332 | 4,489,861 | |||||||||
Notes: | (1) | Based on K-IFRS (on a consolidated basis). |
| (2) | Figures for the years ended December 31, 2020 and 2019 have been restated retrospectively to reflect the accounting policy changes in connection with the IFRIC decision regarding K-IFRS No. 1019, and the related information is included in the consolidated financial statements available on the Company’s website and in the Company’s report on Form 6-K furnished to the Securities and Exchange Commission on March 17, 2022. |
| 2.2. | Sources and Uses of Funds |
2.2.1. Sources of Funds
| (Unit: in millions of Won) | ||||||||||||||||||||||||||||||||||||||
| For the year ended December 31, 2021 | For the year ended December 31, 2020 | For the year ended December 31, 2019 | ||||||||||||||||||||||||||||||||||||
| Average Balance | Interest Rate (%) | Ratio (%) | Average Balance | Interest Rate (%) | Ratio (%) | Average Balance | Interest Rate (%) | Ratio (%) | ||||||||||||||||||||||||||||||
Won Currency | Deposits | 309,428,469 | 0.74 | 49.09 | 286,168,968 | 1.07 | 50.88 | 255,533,447 | 1.44 | 52.09 | ||||||||||||||||||||||||||||
Certificate of deposit | 3,618,303 | 0.87 | 0.57 | 3,635,870 | 1.37 | 0.65 | 4,780,665 | 1.95 | 0.97 | |||||||||||||||||||||||||||||
Borrowings | 24,900,706 | 0.96 | 3.95 | 17,330,480 | 1.20 | 3.08 | 11,332,972 | 1.67 | 2.31 | |||||||||||||||||||||||||||||
Call money | 1,324,902 | 0.65 | 0.21 | 1,617,841 | 0.65 | 0.29 | 891,357 | 1.55 | 0.18 | |||||||||||||||||||||||||||||
Debentures | 57,214,310 | 1.82 | 9.08 | 52,843,837 | 2.02 | 9.39 | 47,127,572 | 2.33 | 9.61 | |||||||||||||||||||||||||||||
Others | 20,305,205 | 0.84 | 3.22 | 19,792,619 | 1.01 | 3.52 | 15,203,562 | 1.88 | 3.11 | |||||||||||||||||||||||||||||
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Subtotal | 416,791,895 | 0.91 | 66.12 | 381,389,615 | 1.21 | 67.81 | 334,869,575 | 1.60 | 68.27 | |||||||||||||||||||||||||||||
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Foreign Currency | Deposits | 26,607,162 | 1.70 | 4.22 | 20,488,109 | 1.46 | 3.64 | 13,370,035 | 1.25 | 2.73 | ||||||||||||||||||||||||||||
Borrowings | 12,976,574 | 1.16 | 2.06 | 12,071,802 | 1.81 | 2.15 | 9,668,310 | 2.19 | 1.97 | |||||||||||||||||||||||||||||
Call money | 995,957 | 0.75 | 0.16 | 976,153 | 0.97 | 0.17 | 527,809 | 2.34 | 0.11 | |||||||||||||||||||||||||||||
Debentures | 8,544,738 | 1.49 | 1.36 | 6,535,922 | 1.84 | 1.16 | 5,447,017 | 2.62 | 1.11 | |||||||||||||||||||||||||||||
Others | 2,029,862 | 0.82 | 0.32 | 1,126,379 | 1.12 | 0.20 | 463,266 | 1.38 | 0.09 | |||||||||||||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| |||||||||||||||||||||
Subtotal | 51,154,293 | 1.47 | 8.12 | 41,198,365 | 1.60 | 7.32 | 29,476,437 | 1.83 | 6.01 | |||||||||||||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| |||||||||||||||||||||
Others | Total shareholders’ equity | 46,705,724 | — | 7.41 | 41,495,072 | — | 7.38 | 38,464,863 | — | 7.84 | ||||||||||||||||||||||||||||
Allowances | 1,040,835 | — | 0.17 | 912,721 | — | 0.16 | 873,017 | — | 0.18 | |||||||||||||||||||||||||||||
Others | 114,646,087 | — | 18.18 | 97,476,975 | — | 17.33 | 86,839,627 | — | 17.70 | |||||||||||||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| |||||||||||||||||||||
Subtotal | 162,392,646 | — | 25.76 | 139,884,768 | — | 24.87 | 126,177,507 | — | 25.72 | |||||||||||||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| |||||||||||||||||||||
Total | 630,338,834 | — | 100.00 | 562,472,748 | — | 100.00 | 490,523,519 | — | 100.00 | |||||||||||||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| |||||||||||||||||||||
| Note: | Based on K-IFRS (on a consolidated basis). |
2.2.2. Uses of Funds
| (Unit: in millions of Won) | ||||||||||||||||||||||||||||||||||||||
| For the year ended December 31, 2021 | For the year ended December 31, 2020 | For the year ended December 31, 2019 | ||||||||||||||||||||||||||||||||||||
| Average Balance | Interest Rate (%) | Ratio (%) | Average Balance | Interest Rate (%) | Ratio (%) | Average Balance | Interest Rate (%) | Ratio (%) | ||||||||||||||||||||||||||||||
Won Currency | Due from banks | 15,212,672 | 0.30 | 2.41 | 7,400,343 | 0.67 | 1.32 | 5,939,242 | 1.51 | 1.21 | ||||||||||||||||||||||||||||
| Securities | 147,320,309 | 1.31 | 23.37 | 125,573,646 | 1.97 | 22.33 | 103,204,928 | 2.31 | 21.04 | |||||||||||||||||||||||||||||
| Loans | 340,131,319 | 2.80 | 53.96 | 315,871,106 | 2.98 | 56.16 | 287,653,938 | 3.45 | 58.64 | |||||||||||||||||||||||||||||
Guarantee payments under payment guarantee | 5,053 | 1.31 | — | 13,421 | 0.73 | — | 8,803 | 0.98 | — | |||||||||||||||||||||||||||||
Call loan | 695,721 | 0.67 | 0.11 | 885,951 | 0.73 | 0.16 | 640,485 | 1.69 | 0.13 | |||||||||||||||||||||||||||||
Private placement corporate bonds | 882,497 | 3.02 | 0.14 | 1,264,212 | 3.98 | 0.22 | 1,319,460 | 3.61 | 0.27 | |||||||||||||||||||||||||||||
| Credit cards | 19,862,308 | 7.09 | 3.15 | 18,560,207 | 7.57 | 3.30 | 17,945,697 | 7.92 | 3.66 | |||||||||||||||||||||||||||||
| Others | 4,193,384 | 6.53 | 0.67 | 4,614,823 | 5.04 | 0.82 | 3,874,774 | 4.93 | 0.79 | |||||||||||||||||||||||||||||
| Allowance | (2,480,441 | ) | — | (0.39 | ) | (2,416,823 | ) | — | (0.43 | ) | (2,406,757 | ) | — | (0.49 | ) | |||||||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| |||||||||||||||||||||
Subtotal | 525,822,822 | 2.51 | 83.42 | 471,766,886 | 2.89 | 83.88 | 418,180,570 | 3.36 | 85.25 | |||||||||||||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| |||||||||||||||||||||
Foreign Currency | Due from banks | 6,868,969 | 0.38 | 1.09 | 6,989,553 | 0.64 | 1.24 | 4,782,706 | 1.44 | 0.98 | ||||||||||||||||||||||||||||
| Securities | 16,052,962 | 3.90 | 2.55 | 15,131,521 | 3.87 | 2.69 | 13,323,102 | 4.35 | 2.72 | |||||||||||||||||||||||||||||
Loans | 26,409,776 | 5.05 | 4.19 | 19,818,889 | 4.30 | 3.52 | 11,384,009 | 3.04 | 2.32 | |||||||||||||||||||||||||||||
Call loan | 3,275,072 | 0.45 | 0.52 | 3,149,433 | 0.82 | 0.56 | 2,444,020 | 2.59 | 0.50 | |||||||||||||||||||||||||||||
Bills bought | 1,940,984 | 0.73 | 0.31 | 1,573,725 | 1.48 | 0.28 | 2,944,008 | 2.66 | 0.60 | |||||||||||||||||||||||||||||
Allowance | (978,088 | ) | — | (0.16 | ) | (404,041 | ) | — | (0.07 | ) | (180,649 | ) | — | (0.04 | ) | |||||||||||||||||||||||
Others | 2,229,707 | — | 0.35 | 1,294,119 | — | 0.22 | 660,572 | — | 0.13 | |||||||||||||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| |||||||||||||||||||||
Subtotal | 55,799,382 | 3.63 | 8.85 | 47,553,199 | 3.24 | 8.44 | 35,357,768 | 3.28 | 7.21 | |||||||||||||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| |||||||||||||||||||||
Others | Cash | 1,917,967 | — | 0.30 | 1,889,892 | — | 0.34 | 1,763,413 | — | 0.36 | ||||||||||||||||||||||||||||
Fixed assets held for business | 8,130,268 | — | 1.29 | 8,048,120 | — | 1.43 | 7,398,134 | — | 1.51 | |||||||||||||||||||||||||||||
Others | 38,668,395 | — | 6.14 | 33,214,651 | — | 5.91 | 27,823,634 | — | 5.67 | |||||||||||||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| |||||||||||||||||||||
Subtotal | 48,716,630 | — | 7.73 | 43,152,663 | — | 7.68 | 36,985,181 | — | 7.54 | |||||||||||||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| |||||||||||||||||||||
Total | 630,338,834 | — | 100.00 | 562,472,748 | — | 100.00 | 490,523,519 | — | 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(1) | (Unit: in billions of Won, except percentages) | |||||||||||
| As of December 31, 2021 | As of December 31, 2020(2) | As of December 31, 2019 | ||||||||||
Total capital (A) | 45,883 | 40,080 | 36,995 | |||||||||
Risk-weighted assets (B) | 290,914 | 262,349 | 255,549 | |||||||||
BIS ratio (A/B) | 15.77% | 15.28% | 14.48% | |||||||||
| Notes: | (1) Calculated in accordance with Basel III. |
(2) Calculated in accordance with the early adoption of the Basel III Credit Risk Framework in 2020. |
| Kookmin Bank(1) | (Unit: in billions of Won, except percentages) | |||||||||||
| As of December 31, 2021 | As of December 31, 2020(1) | As of December 31, 2019 | ||||||||||
Total capital (A) | 35,572 | 32,555 | 29,810 | |||||||||
Risk-weighted assets (B) | 203,569 | 183,148 | 188,075 | |||||||||
BIS ratio (A/B) | 17.47% | 17.78% | 15.85% | |||||||||
| Notes: | (1) Calculated in accordance with Basel III. |
(2) Calculated in accordance with the early adoption of the Basel III Credit Risk Framework in 2020. |
| KB Securities Co., Ltd. | (Unit: in billions of Won, except percentages) | |||||||||||
As of December 31, 2021 | As of December 31, 2020 | As of December 31, 2019 | ||||||||||
Net operating capital (A) | 3,982 | 3,656 | 3,170 | |||||||||
Total amount at risk (B) | 2,072 | 1,678 | 1,561 | |||||||||
Maintenance equity margin (C) | 134 | 134 | 134 | |||||||||
Net capital ratio (A-B)/(C) | 1,422.3% | 1,474.1% | 1,198.7% | |||||||||
Capital surplus (A-B) | 1,909 | 1,979 | 1,609 | |||||||||
| KB Insurance Co., Ltd. | (Unit: in billions of Won, except percentages) | |||||||||||
| As of December 31, 2021 | As of December 31, 2020 | As of December 31, 2019 | ||||||||||
Available capital (A) | 4,354 | 3,812 | 3,657 | |||||||||
Required capital (B) | 2,424 | 2,181 | 2,005 | |||||||||
RBC ratio (A/B) | 179.6% | 174.8% | 182.4% | |||||||||
| Note: | The RBC ratio figure as of December 31, 2021 is preliminary. |
2.3.2. Overseas Credit Ratings
| (As of December 31, 2021) | ||||||||
| 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) | |||
| 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) | |||
| 10/6/2020 | Contingent Convertible Bonds | AA- | Korea Ratings (AAA ~ D) / KIS Ratings (AAA ~ D) / NICE Investors Service (AAA ~ D) | |||
| 11/19/2020 | Debentures | AAA | Korea Ratings (AAA ~ D) / KIS Ratings (AAA ~ D) / NICE Investors Service (AAA ~ D) | |||
| 1/12/2021 | Debentures | AAA | Korea Ratings (AAA ~ D) / KIS Ratings (AAA ~ D) / NICE Investors Service (AAA ~ D) | |||
| 2/3/2021 | Contingent Convertible Bonds | AA- | Korea Ratings (AAA ~ D) / KIS Ratings (AAA ~ D) / NICE Investors Service (AAA ~ D) | |||
| 2/19/2021 | Debentures | AAA | KIS Ratings (AAA ~ D) | |||
| 2/22/2021 | Debentures | AAA | Korea Ratings (AAA ~ D) / NICE Investors Service (AAA ~ D) | |||
| 5/14/2021 | Contingent Convertible Bonds | AA- | Korea Ratings (AAA ~ D) / KIS Ratings (AAA ~ D) / NICE Investors Service (AAA ~ D) | |||
| 6/25/2021 | Commercial Paper | A1 | Korea Ratings (A1 ~ D) / KIS Ratings (A1 ~ D) / NICE Investors Service (A1 ~ D) | |||
| 9/24/2021 | Contingent Convertible Bonds | AA- | Korea Ratings (AAA ~ D) / KIS Ratings (AAA ~ D) / NICE Investors Service (AAA ~ D) |
2.3.4. Early Retirement Program
To enhance productivity by improving its labor structure, Kookmin Bank implemented a voluntary early retirement program following negotiations with its labor union.
Subsidiary | Date of Retirement | Number of Retired Persons | ||
| Kookmin Bank | January 30, 2021 | 200 | ||
| January 21, 2022 | 674 |
2.3.5. Acquisition of the Remaining Shares of PRASAC Microfinance Institution PLC. of Cambodia
Following Kookmin Bank’s acquisition of 70% of the total number of shares of PRASAC Microfinance Institution PLC (“PRASAC”) in April 2020, the Board of Directors of Kookmin Bank resolved on August 18, 2021 to purchase the remaining 30% of PRASAC’s shares. The acquisition closed on October 19, 2021, upon which Kookmin Bank’s ownership of PRASAC increased to 100%. The total acquisition price was Won 1,087.9 billion, including Won 3,027 million of advisory fees.
2.3.6. The Ongoing Outbreak of the Global Pandemic of COVID-19
The ongoing outbreak of the global pandemic of COVID-19 resulted in significant global and domestic economic and financial disruptions in recent years. Despite efforts made by the Korean government to combat the COVID-19 pandemic, its plans to have the country return to life as normal in 2021 had been put on hold in light of the ongoing spread of the new Omicron variant of COVID-19 beginning in November 2021 as well as a significant surge in the number of new daily cases of COVID-19 infections 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 2022 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, rising inflationary pressures leading to increases in the costs of goods and services, disruptions in the global supply chain for raw materials and natural resources, 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 December 31, 2021 | As of December 31, 2020 | As of December 31, 2019 | ||||||||||
Cash and due from financial institutions | 31,009,374 | 25,608,842 | 20,837,878 | |||||||||
Financial assets at fair value through profit or loss | 66,005,815 | 61,035,455 | 53,549,086 | |||||||||
Derivative financial assets | 3,721,370 | 5,545,385 | 3,190,673 | |||||||||
Loans measured at amortized cost | 417,900,273 | 377,166,984 | 339,684,059 | |||||||||
Financial investments | 104,847,871 | 98,695,426 | 71,782,606 | |||||||||
Investments in associates and joint ventures | 448,718 | 771,435 | 598,240 | |||||||||
Property and equipment | 5,239,898 | 5,433,554 | 5,067,377 | |||||||||
Investment property | 2,514,944 | 2,533,539 | 2,827,988 | |||||||||
Intangible assets | 3,266,357 | 3,351,133 | 2,737,813 | |||||||||
Net defined benefit assets | 100,083 | 50,597 | 25,965 | |||||||||
Current income tax assets | 98,798 | 109,772 | 19,095 | |||||||||
Deferred income tax assets | 159,093 | 65,058 | 3,597 | |||||||||
Assets held for sale | 237,318 | 197,727 | 23,151 | |||||||||
Assets of a disposal group held for sale | 171,749 | — | — | |||||||||
Other assets | 28,174,173 | 30,155,037 | 18,215,608 | |||||||||
|
|
|
|
|
| |||||||
Total assets | 663,895,834 | 610,719,944 | 518,563,136 | |||||||||
|
|
|
|
|
| |||||||
Financial liabilities at fair value through profit or loss | 12,088,980 | 11,810,058 | 15,368,153 | |||||||||
Derivative financial liabilities | 3,682,258 | 5,222,897 | 3,007,341 | |||||||||
Deposits | 372,023,918 | 338,580,220 | 305,592,771 | |||||||||
Borrowings | 56,912,374 | 49,827,156 | 37,818,860 | |||||||||
Debentures | 67,430,188 | 62,760,687 | 50,935,583 | |||||||||
Provisions | 808,604 | 714,903 | 527,929 | |||||||||
Net defined benefit liabilities | 225,521 | 239,567 | 236,731 | |||||||||
Current income tax liabilities | 662,672 | 764,981 | 432,431 | |||||||||
Deferred income tax liabilities | 1,470,981 | 1,177,799 | 789,420 | |||||||||
Insurance contract liabilities | 57,165,936 | 54,415,296 | 34,966,683 | |||||||||
Other liabilities | 43,130,482 | 41,804,023 | 29,737,259 | |||||||||
|
|
|
|
|
| |||||||
Total liabilities | 615,601,914 | 567,317,587 | 479,413,161 | |||||||||
| As of December 31, 2021 | As of December 31, 2020 | As of December 31, 2019 | ||||||||||
Equity attributable to shareholders of the parent company | 47,460,582 | 42,544,574 | 38,564,568 | |||||||||
Share capital | 2,090,558 | 2,090,558 | 2,090,558 | |||||||||
Hybrid securities | 2,838,221 | 1,695,988 | 399,205 | |||||||||
Capital surplus | 16,940,231 | 16,723,589 | 17,122,777 | |||||||||
Accumulated other comprehensive income | 1,047,274 | 630,011 | 368,744 | |||||||||
Accumulated other comprehensive income relating to assets of a disposal group held for sale | 7,671 | — | — | |||||||||
Retained earnings | 25,672,815 | 22,540,616 | 19,719,472 | |||||||||
Treasury shares | (1,136,188 | ) | (1,136,188 | ) | (1,136,188 | ) | ||||||
Non-controlling interests | 833,338 | 857,783 | 585,407 | |||||||||
|
|
|
|
|
| |||||||
Total equity | 48,293,920 | 43,402,357 | 39,149,975 | |||||||||
|
|
|
|
|
| |||||||
Total liabilities and equity | 663,895,834 | 610,719,944 | 518,563,136 | |||||||||
|
|
|
|
|
| |||||||
| Notes: (1) | The consolidated financial information for the years ended December 31, 2020 and 2019 have been restated retrospectively to reflect the accounting policy changes in connection with the IFRIC decision regarding K-IFRS No. 1019, and the related information is included in the consolidated financial statements available on the Company’s website and in the Company’s report on Form 6-K furnished to the Securities and Exchange Commission on March 17, 2022. |
| (2) | The consolidated financial information for the year ended December 31, 2021 is expected to be approved at the annual general meeting of shareholders. If such proposal is rejected or modified, then KB Financial Group will disclose such matter through a separate amendment filing. |
3.1.2. Consolidated Statements of Comprehensive Income
| (Unit: in millions of Won, except per share amounts) | ||||||||||||
| For the year ended December 31, 2021 | For the year ended December 31, 2020 | For the year ended December 31, 2019 | ||||||||||
Net interest income | 11,229,572 | 9,722,274 | 9,196,787 | |||||||||
Interest income | 15,210,878 | 14,485,747 | 14,639,187 | |||||||||
Interest income from financial instruments at fair value through other comprehensive income and amortized cost | 14,620,490 | 13,826,382 | 13,935,124 | |||||||||
Interest income from financial instruments at fair value through profit or loss | 590,388 | 659,365 | 704,063 | |||||||||
Interest expense | (3,981,306 | ) | (4,763,473 | ) | (5,442,400 | ) | ||||||
Net fee and commission income | 3,625,583 | 2,958,939 | 2,355,004 | |||||||||
Fee and commission income | 5,323,606 | 4,527,024 | 3,879,247 | |||||||||
Fee and commission expense | (1,698,023 | ) | (1,568,085 | ) | (1,524,243 | ) | ||||||
Net insurance income | 556,711 | 299,993 | 299,512 | |||||||||
Insurance income | 16,107,858 | 14,386,640 | 12,317,182 | |||||||||
Insurance expense | (15,551,147 | ) | (14,086,647 | ) | (12,017,670 | ) | ||||||
Net gains on financial assets/liabilities at fair value through profit or loss | 995,304 | 1,011,366 | 643,872 | |||||||||
Net gains on financial instruments at fair value through profit or loss before applying overlay approach | 1,160,981 | 1,221,610 | 912,187 | |||||||||
Losses on overlay adjustments | (165,677 | ) | (210,244 | ) | (268,315 | ) | ||||||
Net other operating expenses | (1,923,567 | ) | (1,499,930 | ) | (1,063,324 | ) | ||||||
General and administrative expenses | (7,200,853 | ) | (6,814,812 | ) | (6,271,805 | ) | ||||||
Operating profit before provision for credit losses | 7,282,750 | 5,677,830 | 5,160,046 | |||||||||
Provision for credit losses | (1,185,133 | ) | (1,043,498 | ) | (670,185 | ) | ||||||
Net operating income | 6,097,617 | 4,634,332 | 4,489,861 | |||||||||
Net non-operating income (expenses) | (16,011 | ) | 145,640 | 43,337 | ||||||||
Share of profit (loss) of associates and joint ventures | 93,526 | (43,750 | ) | 16,451 | ||||||||
Net other non-operating income (expenses) | (109,537 | ) | 189,390 | 26,886 | ||||||||
Profit before income tax | 6,081,606 | 4,779,972 | 4,533,198 | |||||||||
Income tax expense | (1,697,225 | ) | (1,264,394 | ) | (1,220,570 | ) | ||||||
Profit for the year | 4,384,381 | 3,515,578 | 3,312,628 | |||||||||
Other comprehensive income (loss) for the year, net of tax | 222,758 | 472,270 | 153,327 | |||||||||
Items that will not be reclassified to profit or loss: | 871,654 | 817,524 | (83,329 | ) | ||||||||
Remeasurements of net defined benefit liabilities | (45,510 | ) | (13,434 | ) | (54,523 | ) | ||||||
| For the year ended December 31, 2021 | For the year ended December 31, 2020 | For the year ended December 31, 2019 | ||||||||||
Share of other comprehensive income (loss) of associates and joint ventures | 51 | (1 | ) | (105 | ) | |||||||
Gains (losses) on equity securities at fair value through other comprehensive income | 903,398 | 822,140 | (17,329 | ) | ||||||||
Fair value changes of financial liabilities designated at fair value through profit or loss due to own credit risk | 13,715 | 8,819 | (11,372 | ) | ||||||||
Items that may be reclassified subsequently to profit or loss: | (648,896 | ) | (345,254 | ) | 236,656 | |||||||
Currency translation differences | 255,907 | (187,283 | ) | 37,861 | ||||||||
Gains (losses) on debt securities at fair value through other comprehensive income | (924,698 | ) | (356,572 | ) | 35,490 | |||||||
Share of other comprehensive income (loss) of associates and joint ventures | 498 | (6,846 | ) | 7,800 | ||||||||
Gains (losses) on cash flow hedging instruments | 20,864 | (1,264 | ) | (33,182 | ) | |||||||
Gains (losses) on hedging instruments of net investments in foreign operations | (57,935 | ) | 64,269 | (8,900 | ) | |||||||
Other comprehensive income (losses) arising from separate account | (63,814 | ) | (9,683 | ) | 3,364 | |||||||
Gains on overlay adjustment | 120,282 | 152,125 | 194,223 | |||||||||
Total comprehensive income for the year | 4,607,139 | 3,987,848 | 3,465,955 | |||||||||
Profit (losses) attributable to: | 4,384,381 | 3,515,578 | 3,312,628 | |||||||||
Shareholders of the parent company | 4,409,543 | 3,468,448 | 3,311,257 | |||||||||
Non-controlling interests | (25,162 | ) | 47,130 | 1,371 | ||||||||
Total comprehensive income (expenses) for the year attributable to: | 4,607,139 | 3,987,848 | 3,465,955 | |||||||||
Shareholders of the parent company | 4,610,549 | 3,966,361 | 3,464,300 | |||||||||
Non-controlling interests | (3,410 | ) | 21,487 | 1,655 | ||||||||
Earnings per share | ||||||||||||
Basic earnings per share (Won) | 11,134 | 8,843 | 8,451 | |||||||||
Diluted earnings per share (Won) | 10,890 | 8,730 | 8,389 | |||||||||
| Notes: (1) | The consolidated financial information for the years ended December 31, 2020 and 2019 have been restated retrospectively to reflect the accounting policy changes in connection with the IFRIC decision regarding K-IFRS No. 1019, and the related information is included in the consolidated financial statements available on the Company’s website and in the Company’s report on Form 6-K furnished to the Securities and Exchange Commission on March 17, 2022. |
| (2) | The consolidated financial information for the year ended December 31, 2021 is expected to be approved at the annual general meeting of shareholders. If such proposal is rejected or modified, then KB Financial Group will disclose such matter through a separate amendment filing. |
| 3.2. | Separate Financial Information |
3.2.1. Separate Statements of Financial Position
| (Unit: in millions of Won) | ||||||||||||
| As of December 31, 2021 | As of December 31, 2020 | As of December 31, 2019 | ||||||||||
Cash and due from financial institutions | 608,076 | 23,084 | 18,537 | |||||||||
Financial assets at fair value through profit or loss | 440,760 | 474,262 | 413,909 | |||||||||
Loans measured at amortized cost | 249,128 | 179,542 | 120,000 | |||||||||
Investments in subsidiaries | 26,741,438 | 26,519,880 | 24,162,116 | |||||||||
Property and equipment | 4,444 | 7,730 | 4,170 | |||||||||
Intangible assets | 16,673 | 13,267 | 11,092 | |||||||||
Net defined benefit assets | 221 | — | — | |||||||||
Deferred income tax assets | 5,583 | 3,189 | 7,526 | |||||||||
Other assets | 805,056 | 887,537 | 609,286 | |||||||||
|
|
|
|
|
| |||||||
Total assets | 28,871,379 | 28,108,491 | 25,346,636 | |||||||||
|
|
|
|
|
| |||||||
Borrowings | — | 100,000 | — | |||||||||
Debentures | 5,552,791 | 6,128,043 | 5,543,446 | |||||||||
Net defined benefit liabilities | — | 59 | 437 | |||||||||
Current income tax liabilities | 570,519 | 716,473 | 417,414 | |||||||||
Other liabilities | 235,095 | 178,296 | 203,440 | |||||||||
|
|
|
|
|
| |||||||
Total liabilities | 6,358,405 | 7,122,871 | 6,164,737 | |||||||||
|
|
|
|
|
| |||||||
Share capital | 2,090,558 | 2,090,558 | 2,090,558 | |||||||||
Hybrid securities | 2,837,981 | 1,695,778 | 399,085 | |||||||||
Capital surplus | 14,754,747 | 14,754,747 | 14,742,814 | |||||||||
Accumulated other comprehensive loss | (8,330 | ) | (8,032 | ) | (7,664 | ) | ||||||
Retained earnings | 3,974,206 | 3,588,757 | 3,093,294 | |||||||||
Treasury Shares | (1,136,188 | ) | (1,136,188 | ) | (1,136,188 | ) | ||||||
|
|
|
|
|
| |||||||
Total equity | 22,512,974 | 20,985,620 | 19,181,899 | |||||||||
|
|
|
|
|
| |||||||
Total liabilities and equity | 28,871,379 | 28,108,491 | 25,346,636 | |||||||||
|
|
|
|
|
| |||||||
| Note: | The separate financial information for the year ended December 31, 2021 is expected to be approved at the annual general meeting of shareholders. If such proposal is rejected or modified, then KB Financial Group will disclose such matter through a separate amendment filing. |
3.2.2. Separate Statements of Comprehensive Income
(Unit: in millions of Won, except per share amounts) | ||||||||||||
| For the year ended December 31, 2021 | For the year ended December 31, 2020 | For the year ended December 31, 2019 | ||||||||||
Net interest income | (111,077 | ) | (124,393 | ) | (118,045 | ) | ||||||
Interest income | 9,392 | 8,044 | 8,020 | |||||||||
Interest income from financial instruments at amortized cost | 6,548 | 3,788 | 5,215 | |||||||||
Interest income from financial instruments at fair value through profit or loss | 2,844 | 4,256 | 2,805 | |||||||||
Interest expense | (120,469 | ) | (132,437 | ) | (126,065 | ) | ||||||
Net fee and commission income | (8,157 | ) | (8,338 | ) | (6,283 | ) | ||||||
Fee and commission income | 975 | 841 | 847 | |||||||||
Fee and commission expense | (9,132 | ) | (9,179 | ) | (7,130 | ) | ||||||
Net gains on financial assets at fair value through profit or loss | 20,250 | 12,663 | 15,947 | |||||||||
Net other operating income | 1,620,238 | 1,571,239 | 926,934 | |||||||||
General and administrative expenses | (85,417 | ) | (71,854 | ) | (71,171 | ) | ||||||
Operating profit before provision for credit losses | 1,435,837 | 1,379,317 | 747,382 | |||||||||
Provision for credit losses | (417 | ) | (465 | ) | — | |||||||
Operating profit | 1,435,420 | 1,378,852 | 747,382 | |||||||||
Net non-operating income(loss) | 1,165 | 514 | (541 | ) | ||||||||
Profit before income tax | 1,436,585 | 1,379,366 | 746,841 | |||||||||
Income tax income(expense) | 2,281 | 49 | (854 | ) | ||||||||
Profit for the year | 1,438,866 | 1,379,415 | 745,987 | |||||||||
Other comprehensive loss for the year, net of tax | (298 | ) | (368 | ) | (520 | ) | ||||||
Items that will not be reclassified to profit or loss: | (298 | ) | (368 | ) | (520 | ) | ||||||
Remeasurements of net defined benefit liabilities | (298 | ) | (368 | ) | (520 | ) | ||||||
|
|
|
|
|
| |||||||
Total comprehensive income for the year | 1,438,568 | 1,379,047 | 745,467 | |||||||||
|
|
|
|
|
| |||||||
Earnings per share | ||||||||||||
Basic earnings per share (Won) | 3,509 | 3,482 | 1,891 | |||||||||
Diluted earnings per share (Won) | 3,436 | 3,438 | 1,877 | |||||||||
| Note: | The separate financial information for the year ended December 31, 2021 is expected to be approved at the annual general meeting of shareholders. If such proposal is rejected or modified, then KB Financial Group will disclose such matter through a separate amendment filing. |
| 3.3. | Other Selected Financial Data |
3.3.1. Won-denominated Liquidity Ratio
| (Unit: in millions of Won, except percentages) | ||||||||||||
| As of December 31, 2021 | As of December 31, 2020 | As of December 31, 2019 | ||||||||||
Current assets in Won (A) | 713,908 | 112,754 | 142,683 | |||||||||
Current liabilities in Won (B) | 317,184 | 92,328 | 110,398 | |||||||||
Liquidity ratio (A/B) | 225.08 | % | 122.12 | % | 129.24 | % | ||||||
| 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 year ended December 31, 2021 | For the year ended | For the year ended | ||||||
Net income as a percentage of average total assets (ROA) | 0.69 | 0.61 | 0.66 | |||||
Net income as a percentage of average shareholders’ equity (ROE) | 9.80 | 8.64 | 8.93 | |||||
| Note: | Based on K-IFRS (on a consolidated basis). |
3.3.3. 20 Largest Exposures of Kookmin Bank by Borrower (As of December 31, 2021)
| (Unit: in billions of Won) | ||||
Company | Credit Extended | |||
STRADA HOLDCO L.P. | 1,774 | |||
Samsung Electronics Co., Ltd. | 1,223 | |||
GS Caltex Corporation | 1,028 | |||
Hyundai Steel Co., Ltd. | 947 | |||
Samsung Heavy Industries Co., Ltd. | 944 | |||
Kia Corporation | 936 | |||
KB Kookmin Card Co., Ltd. | 900 | |||
E-MART Inc. | 862 | |||
Hyundai Heavy Industries Co., Ltd. | 800 | |||
Samsung SDI Co., Ltd. | 745 | |||
POSCO | 657 | |||
LG Display Co., Ltd. | 651 | |||
SK Inc. | 650 | |||
LG CHEM, LTD. | 635 | |||
PT Bank Bukopin Tbk | 593 | |||
INTESA SANPAOLO S.P.A | 593 | |||
FEDERAL RESERVE BANK OF NEWYORK | 583 | |||
CJ Cheiljedang Corp. | 556 | |||
LG Electronics Inc. | 536 | |||
LS-Nikko Copper Inc. | 514 | |||
|
| |||
Total | 16,127 | |||
|
| |||
3.3.4. 10 Largest Exposures of Kookmin Bank by Chaebol Group (As of December 31, 2021)
| (Unit: in billions of Won) | ||||
Group | Credit Extended | |||
Samsung | 4,350 | |||
Hyundai Motor | 4,296 | |||
SK | 3,565 | |||
LG | 2,584 | |||
Lotte | 2,233 | |||
Hyundai Heavy Industries | 2,151 | |||
Hanwha | 1,662 | |||
GS | 1,656 | |||
POSCO | 1,464 | |||
LS | 1,296 | |||
|
| |||
Total | 25,257 | |||
|
| |||
3.3.5. Kookmin Bank’s Loan Concentration by Industry (As of December 31, 2021)
| (Unit: in billions of Won, except percentages) | ||||||||
Industry | Total Credit | Percentage of Total Credit | ||||||
Manufacturing | 48,777 | 28.2 | % | |||||
Construction | 3,156 | 1.8 | % | |||||
Real estate | 39,719 | 23.0 | % | |||||
Retail and wholesale | 26,601 | 15.4 | % | |||||
Hotel, lodging and food services | 9,950 | 5.8 | % | |||||
Financial institutions | 4,114 | 2.4 | % | |||||
Others | 40,669 | 23.4 | % | |||||
|
|
|
| |||||
Total | 172,986 | 100.0 | % | |||||
|
|
|
| |||||
3.3.6. Top 20 Non-Performing Loans of Kookmin Bank (As of December 31, 2021)
| (Unit: in billions of Won) | ||||||||||
Borrower | Industry | Total Credit | Allowance for Loan Losses | |||||||
Borrower A | Construction | 41.6 | 40.7 | |||||||
Borrower B | Health and social services | 18.7 | 1.9 | |||||||
Borrower C | Shipbuilding | 17.7 | 8.1 | |||||||
Borrower D | Publishing, film, broadcasting and information services | 17.1 | 12.3 | |||||||
Borrower E | Retail and wholesale | 12.8 | 11.1 | |||||||
Borrower F | Manufacturing | 12.7 | 6.3 | |||||||
Borrower G | Manufacturing | 8.5 | 1.5 | |||||||
Borrower H | Manufacturing | 6.3 | 5.6 | |||||||
Borrower I | Manufacturing | 8.5 | 2.8 | |||||||
Borrower J | Manufacturing | 5.8 | 1.3 | |||||||
Borrower K | Manufacturing | 5.6 | 2.0 | |||||||
Borrower L | Manufacturing | 4.9 | 1.6 | |||||||
Borrower M | Retail and wholesale | 4.1 | 2.4 | |||||||
Borrower N | Manufacturing | 4.5 | 3.7 | |||||||
Borrower O | Manufacturing | 5.9 | 2.1 | |||||||
Borrower P | Manufacturing | 3.8 | 1.3 | |||||||
Borrower Q | Manufacturing | 3.8 | 3.6 | |||||||
Borrower R | Manufacturing | 5.3 | 3.7 | |||||||
Borrower S | Retail and wholesale | 3.6 | 0.2 | |||||||
Borrower T | Retail and wholesale | 3.2 | 0.2 | |||||||
|
|
|
| |||||||
Total | 194.4 | 112.4 | ||||||||
|
|
|
| |||||||
| 3.4. | Other Financial Information |
The Company’s audited consolidated and separate financial statements are available on its 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 December 31, 2021 | KPMG Samjong Accounting Corp. | Quarterly, semi-annual and annual review & audit, review of internal accounting management system (including audit of internal control over financial reporting) | 1,261 | 11,364 | 1,261 | 11,451 | ||||||||||||||
January 1 to December 31, 2020 | KPMG Samjong Accounting Corp. | Quarterly, semi-annual and annual review & audit, review of internal accounting management system (including audit of internal control over financial reporting) | 1,246 | 11,570 | 1,246 | 12,624 | ||||||||||||||
January 1 to December 31, 2020 | KPMG Samjong Accounting Corp. | Expansion of the scope of audit in connection with the acquisition of Prudential Life Insurance | 481 | 4,829 | 481 | 4,846 | ||||||||||||||
January 1 to December 31, 2019 | Samil PricewaterhouseCoopers | Quarterly, semi-annual 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 | ||||||||||||||
| Notes: | (1) | Total compensation and estimated hours are established at the time of the execution of the audit and review services contract. | ||
| (2) | Represents the total amount paid (rounded to the nearest million) for the year ended December 31, 2021. | |||
| (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 December 31, 2021 | KPMG Samjong Accounting Corp. | PCAOB audit of consolidated financial statements and internal control over financial reporting | May 1, 2021 to April 30, 2022 | 681 | ||||||
January 1 to December 31, 2020 | KPMG Samjong Accounting Corp. | PCAOB audit of consolidated financial statements and internal control over financial reporting | May 1, 2020 to April 30, 2021 | 662 | ||||||
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 | ||||||
| Note: | (1) Total compensation (excluding value-added taxes) is established at the time of the execution of the audit and review services contract. |
| 4.3. | Change in Auditor |
Pursuant to the Act on External Audit of Stock Companies and the related regulations thereunder, the Securities and Futures Commission of the Financial Services Commission designated KPMG Samjong Accounting Corp. as the new external auditor for the Company for the fiscal years ending December 31, 2020, 2021 and 2022. As such, the external auditor for the Company and its subsidiaries for the fiscal year ended December 31, 2021 continued to be KPMG Samjong Accounting Corp. Prudential Life Insurance, which kept Samil PricewaterhouseCoopers as its external auditor for the fiscal year ended December 31, 2020, has changed its external auditor for the fiscal year ended December 31, 2021 to KPMG Samjong Accounting Corp.
| 5. | Corporate Governance and Affiliated Companies |
| 5.1. | Board of Directors & Committees under the Board |
As of December 31, 2021, our board of directors consisted of nine directors, comprising one executive director, one non-standing director and seven non-executive directors. The following committees currently serve under our board of directors:
| • | Audit Committee; |
| • | Risk Management Committee; |
| • | Evaluation and Compensation Committee; |
| • | 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 December 31, 2021.
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. | Four Audit Committee members (Kyung Ho Kim, Suk Ho Sonu, 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 (Non-executive directors) | 9 (7) | 3,000 | — | |||||||
| Notes: | (1) | Represents the total number of applicable persons as of December 31, 2021. | ||
| (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 December 31, 2021) | (Unit: in millions of Won) | |||||
Total number of persons(1) | Total payment(2)(3) | Average payment per person(4) | Notes | |||
9 | 2,392 | 266 | — | |||
| Notes: | (1) | Represents the total number of applicable persons as of December 31, 2021. | ||
| (2) | Represents the total amount paid (rounded to the nearest million) for the year ended December 31, 2021. | |||
| (3) | Total payment amount in accordance with the Company’s internal policies on compensation to directors. | |||
| (4) | Represents (i) the total amount paid (rounded to the nearest million) for the year ended December 31, 2021, divided by (ii) the number of applicable persons for the applicable reporting period. |
5.3.3. Compensation Breakdown
| (As of December 31, 2021) | (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 | 1,726 | 863 | — | ||||||||||||
Non-executive Directors (excluding Audit Committee members) | 3 | 279 | 93 | — | ||||||||||||
Audit Committee members | 4 | 388 | 97 | — | ||||||||||||
Internal Auditor | — | — | — | — | ||||||||||||
| Notes: (1) | Represents the total number of applicable persons as of December 31, 2021. |
| (2) | Represents the total amount paid (rounded to the nearest million) for the year ended December 31, 2021. |
| (3) | Total payment amount in accordance with the Company’s internal policies on compensation to directors. |
| (4) | Represents (i) the total amount paid (rounded to the nearest million) for the year ended December 31, 2021, divided by (ii) the number of applicable persons for the applicable reporting period. |
| 5.4. | Top 5 Highest-Paid Individuals |
5.4.1 Compensation exceeding Won 500 million – Individual basis
| (As of December 31, 2021) | (Unit: in millions of Won) | |||||||
Name | Position | Total Amount | Deferred Compensation(1) | |||||
| Jong Kyoo Yoon | Chairman & CEO | 1,726 | - Deferred short-term performance-based payment, the amount of which corresponds to a total of 5,962 shares and deferred long-term performance-based payment, the amount of which corresponds to a total of 18,756 shares - Long-term performance-based payment (22,712 shares per year), the amount of which will be finalized at a future date pursuant to a performance evaluation over a three-year period from November 21, 2020 to November 20, 2023 | |||||
| Chang Kwon Lee | Senior Executive Vice President | 995 | - Deferred short-term performance-based payment, the amount of which corresponds to a total of 2,525 shares and deferred long-term performance-based payment, the amount of which corresponds to a total of 3,216 shares | |||||
Pil Kyu Im | Senior Executive Vice President | 582 | - Deferred short-term performance-based payment, the amount of which corresponds to a total of 2,456 shares and deferred long-term performance-based payment, the amount of which corresponds to a total of 1,127 shares | |||||
Jeong Soo Lee | General Manager | 573 | - Not applicable | |||||
Jieon Kim | Head of Unit | 567 | - Not applicable | |||||
| Note: (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
Name | Compensation Type | Total Compensation | Calculation Criteria and Method | |||||||
| Jong Kyoo Yoon | Earned income | Salary | 850 | A monthly salary was paid in even installments each month in accordance with the amount of annual salary determined by a resolution of the Evaluation and Compensation Committee within the limit of the total amount of compensation approved at the shareholders’ meeting. (This amount includes allowances for business expenses of Won 350 million.) | ||||||
Bonus | 876 | The bonus paid in 2021 consisted of Won 347 million in short-term performance-based compensation and Won 529 million in long-term performance-based compensation.
The short-term performance-based compensation consisted of Won 20 million paid as an upfront lump sum payment pursuant to a performance evaluation from November 21, 2020 to December 31, 2020, Won 106 million (1,883 shares) paid as the third installment of deferred payments pursuant to a performance evaluation in 2018, Won 105 million (1,870 shares) paid as the second installment of deferred payments pursuant to a performance evaluation in 2019, Won 103 million (1,822 shares) paid as the first installment of deferred payments pursuant to a performance evaluation from January 1, 2020 to November 20, 2020 (prior to re-election), and Won 13 million (223 shares) paid as the first installment of deferred payments pursuant to a performance evaluation from November 21, 2020 to December 31, 2020 (post re-election).
The short-term performance evaluation index for 2020 consisted of financial results (e.g., ROE, total operating income, CIR, real NPL ratio, Tier 1 ratio, net increase in the number of cross-selling customers among subsidiaries) as well as non-financial results (e.g., strengthening the overall position of the company by improving the core competitiveness of the Company, implementing customer-centric innovations of infrastructure and enhancement of efficiency). The amount of the short-term incentive payment is determined by the Evaluation and Compensation Committee based on the aggregate score of the index items above and is within the range of 0%-100% of the base salary.
With respect to financial results, the Company’s net profit for 2020 increased 4.3% YoY to Won 3,455 billion primarily due to a solid growth in core earnings and inorganic growth through M&As. Improvements in asset quality (improvement in comprehensive NPL ratio from 0.90% in 2019 to 0.78% in 2020) and the strengthening of risk management abilities, as demonstrated by loan growth in prime assets (an increase in loan balance from Won 269 trillion in 2019 to Won 295 trillion in 2020, constituting a 9.9% growth YoY), were considered, among others, to be major achievements reflected in the performance evaluation.
With respect to non-financial results, the major achievements considered included (i) contributing to the solid growth of fee income (25.6% YoY growth in 2020) by enhancing the performances of non-banking subsidiaries, (ii) contributing to the sustainable growth of the Group through loan growths of the Bank and the acquisition of Prudential Life Insurance despite the contraction of net interest margins due to decreasing interest rates, (iii) enhancing the competitive edge of the Group’s digital channels and (iv) reinforcing the “One-Firm KB” policy through empowerment of the cooperative business structure within the Group. | ||||||||
Name | Compensation Type | Total Compensation | Calculation Criteria and Method | |||||||
The long-term performance-based compensation consisted of Won 529 million (9,378 shares) paid as the first installment of deferred payments pursuant to a performance evaluation over a three-year period from November 21, 2017 to November 20, 2020.
The long-term performance evaluation index consisted of financial results (e.g., relative total shareholder return, earnings per share, asset quality, HCROI, net profit from non-banking businesses). The amount of the long-term incentive payment is determined by the Evaluation and Compensation Committee based on the aggregate score of the index items above and is within the range of 0%-200% of the base salary.
With respect to the financial results for long-term performance evaluation, the relative total shareholder return was calculated by measuring the increase in the Company’s share price relative to the average increase in the share price of competitors for each evaluation period, while the other items were calculated by averaging each year’s results. | ||||||||||
Stock Options | — | Not applicable | ||||||||
Other earned income | — | Not applicable | ||||||||
| Retirement income | — | Not applicable | ||||||||
| Other income | — | Not applicable | ||||||||
| Chang Kwon Lee | Earned income | Salary | 260 | 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 | 619 | The bonus paid in 2021 consisted of Won 243 million in short-term performance-based compensation and Won 377 million in long-term performance-based compensation.
The short-term performance-based compensation consisted of Won 123 million paid as an upfront lump sum payment pursuant to a performance evaluation in 2020, Won 29 million (513 shares) paid as the third installment of deferred payments pursuant to a performance evaluation in 2018, Won 40 million (710 shares) paid as the second installment of deferred payments pursuant to a performance evaluation in 2019, and Won 51 million (906 shares) paid as the first installment of deferred payments pursuant to a performance evaluation in 2020. | ||||||||
Name | Compensation Type | Total Compensation | Calculation Criteria and Method | |||||||
The short-term performance evaluation index for 2020 consisted of the financial results of the Company’s performance as well as non-financial results relating to various responsibilities that pertain to the executive officer’s position as the senior executive vice president and Chief Strategy Officer. The amount of the short-term incentive payment is determined by the Evaluation and Compensation Committee based on the aggregate score of the index items above and is within the range of 0%-120% of the base salary.
With respect to financial results, improvements in asset quality and loan growth in prime assets were considered to be major achievements. With respect to non-financial results, major achievements included (i) solidifying the Group’s competitiveness and strengthening the non-banking portfolio of the Group through the acquisition of Prudential Life Insurance and (ii) securing the competitive edge of the Group by enhancing the “One-Firm KB” synergy within the Group.
The long-term performance-based compensation consisted of Won 217 million (4,823 shares) paid as an upfront lump sum payment pursuant to a performance evaluation over the period from 2019 to 2020, Won 91 million (1,608 shares) paid as the first installment of deferred payments pursuant to a performance evaluation over the period from 2019 to 2020, and Won 69 million (1,215 shares) paid as the third installment of deferred payments pursuant to a performance evaluation over the period from 2017 to 2018.
The long-term performance evaluation index consisted of relative total shareholder return, the Company’s financial results and performance results based on the executive officer’s position and responsibilities. The amount of the long-term incentive payment is determined based on the aggregate score of the index items above and is within the range of 0%-100% of the base salary.
Relative total shareholder return was calculated by measuring the increase in the Company’s share price relative to the industry’s average of increase in share price for each evaluation period, while other items were calculated by averaging each year’s results. | ||||||||||
| Stock Options | — | Not applicable | ||||||||
| Other earned income | 8 | Welfare benefits | ||||||||
| Retirement income | 108 | Retirement income was determined in consideration of the executive officer’s tenure at the Company and his base salary at the time of retirement in accordance with internal policy regarding executive officers. | ||||||||
| Other income | — | Not applicable | ||||||||
| Pil Kyu Im | Earned income | Salary | 260 | 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 | 309 | The bonus paid in 2021 consisted of Won 246 million in short-term performance-based compensation and Won 63 million in long-term performance-based compensation. | ||||||||
Name | Compensation Type | Total Compensation | Calculation Criteria and Method | |||||||
The short-term performance-based compensation consisted of Won 122 million paid as an upfront lump sum payment pursuant to a performance evaluation in 2020, Won 36 million (638 shares) paid as the third installment of deferred payments pursuant to a performance evaluation in 2018, Won 36 million (645 shares) paid as the second installment of deferred payments pursuant to a performance evaluation in 2019, and Won 51 million (904 shares) paid as the first installment of deferred payments pursuant to a performance evaluation in 2020.
The short-term performance evaluation index for 2020 consisted of financial results pertaining to the executive officer’s responsibility as the senior executive vice president and non-financial results specific to the role as a Chief Human Resources Officer. The amount of the short-term incentive payment is determined by the Audit Committee and the Evaluation and Compensation Committee based on the aggregate score of the index items above and is within the range of 0%-120% of the base salary.
With respect to financial results, improvements in asset quality and loan growth in prime assets were considered to be major achievements.
With respect to non-financial results, major achievements included (i) the flexible management of human resources in consideration of both internal and external environments and enhancement of human resources portfolio, and (ii) accelerating the realization of “Smart Work” by executing HR Digitalization.
The long-term performance-based compensation consisted of Won 63 million (1,125 shares) paid as the second installment of deferred payments pursuant to a performance evaluation over the period from 2018 to 2019.
The long-term performance evaluation index consisted of the relative total shareholder return and performance results based on the executive officer’s position and responsibilities. The amount of the long-term incentive payment is determined based on the aggregate score of the index items above and is within the range of 0%-100% of the base salary.
Relative total shareholder return was calculated by measuring the increase in the Company’s share price relative to the industry’s average of increase in share price for each evaluation period, while the executive officer’s performance results were calculated by averaging each year’s results. | ||||||||||
| Stock Options | — | Not applicable | ||||||||
| Other earned income | 13 | Welfare benefits | ||||||||
| Retirement income | — | Not applicable | ||||||||
| Other income | — | Not applicable | ||||||||
Name | Compensation Type | Total Compensation | Calculation Criteria and Method | |||||||
| Jeong Soo Lee | Earned income | Salary | 119 | 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 | 130 | The bonus paid in 2021 consisted of performance-based compensation for Fiscal Year 2021, and compensation for the unused annual paid vacations, etc. | ||||||||
| Stock Options | — | Not applicable | ||||||||
| Other earned income | — | Not applicable | ||||||||
| Retirement income | 324 | Retirement income was determined in accordance with internal regulations and policies. | ||||||||
| Other income | — | Not applicable | ||||||||
| Jieon Kim | Earned income | Salary | 115 | 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 | 123 | The bonus paid in 2021 consisted of performance-based compensation for Fiscal Year 2021 and compensation for unused annual paid vacations, etc. | ||||||||
| Stock Options | — | Not applicable | ||||||||
| Other earned income | — | Not applicable | ||||||||
| Retirement income | 328 | Retirement income was determined in accordance with internal regulations and policies. | ||||||||
| 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, 2021 are as follows.
1) Kookmin Bank (100.00%)
2) KB Securities Co., Ltd. (100.00%)
3) KB Insurance Co., Ltd. (100.00%)
4) KB Kookmin Card Co., Ltd. (100.00%)
5) Prudential Life Insurance (100.00%)
6) KB Asset Management Co., Ltd. (100.00%)
7) KB Capital Co., Ltd. (100.00%)
8) KB Life Insurance Co., Ltd. (100.00%)
9) KB Real Estate Trust Co., Ltd. (100.00%)
10) KB Savings Bank Co., Ltd. (100.00%)
11) KB Investment Co., Ltd. (100.00%)
12) KB Data Systems Co., Ltd. (100.00%)
13) KB Credit Information Co., Ltd. (100.00%)
| 6. | Directors, Senior Management and Employees |
| 6.1. | Executive Directors |
As of December 31,2021 and March 17, 2022, we had one executive director. The name, position and the end of the term of our executive director and the number of shares of our common stock he owned as of December 31, 2021 are set forth below.
Name | Date of Birth | Position | Common Shares Owned | End of Term | ||||
Jong Kyoo Yoon | October 1955 | Chairman & Chief Executive Officer | 21,000 | November 20, 2023 |
| 6.2. | Non-standing Directors |
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 December 31, 2021 are set forth below.
Name | Date of Birth | Position | Common Shares Owned | End of Term | ||||
Yin Hur | December 1961 | Non-standing Director | 13,506 | December 31, 2021 |
Mr. Yin Hur retired from his position as the Group’s non-standing director as of December 31, 2021 in connection with his appointment as the Vice Chairman of the Group. A new non-standing director will be appointed at the general meeting of shareholders for fiscal year 2021, which is expected to be held on March 25, 2022. For information on the non-standing director candidate, please refer to the Company’s report on Form 6-K furnished to the Securities and Exchange Commission on March 7, 2022.
| 6.3. | Non-executive Directors |
As of December 31, 2021 and March 17, 2022, we had seven non-executive directors. The name, position and the end of the term of our non-executive directors and the number of shares of our common stock they respectively owned as of December 31, 2021 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 25, 2022 | ||||||
Stuart B. Solomon | July 1949 | Non-executive Director | — | March 25, 2022 | ||||||
Myung Hee Choi | February 1952 | Non-executive Director | — | March 25, 2022 | ||||||
Kouwhan Jeong | September 1953 | Non-executive Director | — | March 25, 2022 | ||||||
Kyung Ho Kim | December 1954 | Non-executive Director | — | March 25, 2022 | ||||||
Seon-joo Kwon | November 1956 | Non-executive Director | — | March 19, 2022 | ||||||
Gyutaeg Oh | February 1959 | Non-executive Director | — | March 19, 2022 | ||||||
As of December 31, 2021, 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. | Appointment of Directors to be proposed at the annual general meeting of shareholders |
The following is a list of non-standing director, non-executive director and audit committee member candidates, as of March 17, 2022, to be proposed to shareholders at the annual general meeting of shareholders for fiscal year 2021. If such proposal is rejected at the upcoming annual general meeting of shareholders, KB Financial Group will disclose such matter through a separate amendment filing. For more information regarding the annual general meeting of shareholders and agenda items, please refer to the Company’s report on Form 6-K furnished to the Securities and Exchange Commission on March 7, 2022.
Name | Date of Birth | Nominated Position | Expected Date of Appointment | |||
Jae Keun Lee (New Appointment) | May 1966 | Non-standing Director | March 25, 2022 | |||
Suk Ho Sonu (Re-appointment) | September 1951 | Audit Committee Member and Non-executive Director | March 25, 2022 | |||
Myung Hee Choi (Re-appointment) | February 1952 | Audit Committee Member and Non-executive Director | March 25, 2022 | |||
Kouwhan Jeong (Re-appointment) | September 1953 | Audit Committee Member and Non-executive Director | March 25, 2022 | |||
Kyung Ho Kim (Re-appointment) | December 1954 | Audit Committee Member and Non-executive Director | March 25, 2022 | |||
Seon-joo Kwon (Re-appointment) | November 1956 | Non-executive Director | March 25, 2022 | |||
Gyutaeg Oh (Re-appointment) | February 1959 | Non-executive Director | March 25, 2022 | |||
Jaehong Choi (New appointment) | August 1962 | Non-executive Director | March 25, 2022 | |||
Young Soo Kim (New appointment) | January 1960 | Non-executive Director | March 25, 2022 |
| 6.5. | Senior Management |
Members of our senior management as of March 17, 2022 are as follows.
Name | Date of Birth | Position | Common Shares Owned(1) | End of Term | ||||||
Yin Hur | December 1961 | Vice Chairman & Head of Business Group | 13,506 | December 31, 2022 | ||||||
Dong Cheol Lee | October 1961 | Vice Chairman & Head of Business Group | 3,325 | December 31, 2022 | ||||||
Jong Hee Yang | June 1961 | Vice Chairman & Head of Business Group | 914 | December 31, 2022 | ||||||
Woo Yeul Lee | November 1964 | Senior Executive Vice President and Chief Strategy Officer | 1,490 | December 31, 2022 | ||||||
Pil Kyu Im | March 1964 | Senior Executive Vice President and Chief Risk Management Officer | 1,005 | December 31, 2022 | ||||||
Dong Whan Han | January 1965 | Senior Executive Vice President and Head of KB Research | 1,100 | December 31, 2022 | ||||||
Young Ho Seo | March 1966 | Senior Managing Director and Chief Finance Officer | — | December 31, 2022 | ||||||
Yeo Woon Yoon | April 1967 | Senior Managing Director and Chief Human Resources Officer | 516 | December 31, 2022 | ||||||
Jin Gyu Maeng | January 1966 | Senior Managing Director and Head of Audit | 931 | December 31, 2022 | ||||||
Hye Sook Moon | September 1971 | Managing Director and Head of ESG Division | 200 | December 31, 2023 | ||||||
Bong Joong Kwon | November 1969 | Managing Director and Head of IR | 286 | December 31, 2022 | ||||||
Byung Joo Oh | January 1973 | Managing Director, Insurance Business Unit | 673 | December 31, 2022 | ||||||
Hye Ja Suh | September 1966 | Managing Director and Chief Compliance Officer | 1,233 | December 31, 2022 | ||||||
Jeong Rim Park | November 1963 | Head of Business Group, Head of Capital Market Business Unit | 3,150 | December 31, 2022 | ||||||
Sung Hyun Kim | August 1963 | Head of Corporate and Investment Banking Business Unit | 15,468 | December 31, 2022 | ||||||
Jin Young Kim | August 1969 | Chief Public Relation Officer | 765 | December 31, 2022 | ||||||
Chai Hyun Sung | September 1965 | Senior Executive Vice President, Retail Customer Business Unit | 7,693 | December 31, 2022 | ||||||
Jae Young Choi | June 1967 | Senior Managing Director, Wealth Management and Pension Business Unit | 824 | December 31, 2022 | ||||||
Mun Cheol Jeong | August 1968 | Senior Managing Director, Small and Medium Enterprise Business Unit | 2,294 | December 31, 2022 | ||||||
Nam Hoon Cho | June 1968 | Chief Global Strategy Officer | 1,000 | December 31, 2022 | ||||||
Young Suh Cho | February 1971 | Chief Digital Platform Officer | — | December 31, 2022 | ||||||
Jin Soo Yoon | February 1964 | Chief Information Technology Officer | 100 | December 31, 2022 | ||||||
Sungpyo Jeon | August 1966 | Chief Contact Center Officer | 859 | December 31, 2022 | ||||||
Jeong Ha | January 1967 | Senior Executive Vice President, Capital Market Business Unit | — | December 31, 2022 | ||||||
Sang-Hyeon Woo | February 1964 | Senior Executive Vice President, Corporate and Investment Banking Business Unit | 348 | December 31, 2022 | ||||||
Dong Sook Jeon | September 1968 | Head of Pension Division | 1,700 | December 31, 2022 | ||||||
Nam Che Kang | August 1967 | Head of Global Division | 213 | December 31, 2022 | ||||||
Chang Hwa Yook | December 1967 | Head of Data Division | 446 | December 31, 2022 | ||||||
Chan Yong Park | September 1965 | Head of the Office of Planning and Coordination | 855 | December 31, 2022 | ||||||
Yoo Shim Hur | April 1973 | Head of Digital Contents Center | — | December 31, 2022 | ||||||
Joo Hyun Kim | November 1970 | Head of Group Cloud Center | — | December 31, 2022 | ||||||
| Note: | (1) The number of common shares owned is as of December 31, 2021 and includes those owned in the holder’s name under the employee stock ownership association’s account, and may differ from the number of shares owned as reported pursuant to Article 173 of the Financial Investment Services and Capital Markets Act. |
As of March 17, 2022, the following management also served as senior management at our subsidiaries.
Name | Subsidiary | Position | Appointment Date | |||
Jeong Rim Park | KB Securities | Chief Executive Officer | January 2019 | |||
Sung Hyun Kim | KB Securities | Chief Executive Officer | January 2019 | |||
Hye Sook Moon | Kookmin Bank | Head of ESG Division | January 2022 | |||
Jin Young Kim | Kookmin Bank | Senior Managing Director; Brand Strategy Group | January 2021 | |||
Chai Hyun Sung | Kookmin Bank | Senior Executive Vice President; Retail Customer Group | January 2020 | |||
Jae Young Choi | Kookmin Bank | Senior Managing Director; Wealth Management Group | January 2022 | |||
| KB Securities | Senior Executive Vice President; Wealth Management Division | January 2022 | ||||
| KB Insurance | Senior Managing Director; WM/Pension Division | January 2022 | ||||
Mun Cheol Jeong | Kookmin Bank | Senior Managing Director; SME and SOHO Customer Group | January 2022 | |||
Nam Hoon Cho | Kookmin Bank | Senior Managing Director; Global Business Group | January 2022 | |||
Young Suh Cho | Kookmin Bank | Senior Managing Director; DT Strategy Division | January 2022 | |||
Jin Soo Yoon | Kookmin Bank | Senior Executive Vice President; Tech Group | January 2021 | |||
Sungpyo Jeon | Kookmin Bank | Senior Managing Director; Smart Customer Group | January 2022 | |||
Jeong Ha | Kookmin Bank | Senior Executive Vice President; Capital Markets Group | January 2021 | |||
Sang-Hyeon Woo | Kookmin Bank | Senior Executive Vice President; Corporate Investment Banking Customer Group | January 2021 | |||
| KB Securities | Senior Executive Vice President; Investment Banking Division | January 2020 | ||||
Dong Sook Jeon | Kookmin Bank | Head of Pension Business Division | January 2022 | |||
| KB Securities | Managing Director; Pension Business Division | January 2022 | ||||
Nam Che Kang | Kookmin Bank | Head of Global Growth Supporting Division | January 2022 | |||
Chang Hwa Yook | Kookmin Bank | Head of Data Division | January 2022 | |||
Chan Yong Park | Kookmin Bank | Managing Director; Planning & Coordination Department | January 2022 | |||
Yoo Shim Hur | Kookmin Bank | Managing Director; Digital Contents Center | January 2022 | |||
Joo Hyun Kim | Kookmin Bank | Head of Cloud Platform Department(P) | February 2022 | |||
Woo Yeul Lee | KB Securities | Non-standing Director | February 2022 | |||
| Prudential Life | Non-standing Director | February 2022 | ||||
Young Ho Seo | KB Insurance | Non-standing Director | February 2022 |
| 6.6. | Employees |
The following table shows information regarding our employees and compensation paid to them as of December 31, 2021.
| (Unit: in millions of Won) | ||||||||
Number of Employees(A)(1) | Average Tenure of Employees(2) | Total Amount of Annual | Average Annual Salary per Person(B/A) | |||||
| 161 | 4 years and 5 months (15 years and 7 months) | 27,573(3) | 170(3) | |||||
Notes: (1) Includes all employees as of December 31, 2021, including executive officers.
(2) The duration in parentheses includes tenure at our subsidiaries.
(3) Includes retroactive payment of bonuses from 2020 and 2021. The average annual salary per person excluding such amounts is Won 144 million.
The following table shows information regarding our executive officers and compensation paid to them as of December 31, 2021.
| (Unit: in millions of Won) | ||||||||
Number of Executive Officers(A)(1) | Total Amount of Annual Salaries(B) | Average Annual Salary per Person(B/A) | ||||||
12 | 4,137 | 345 | ||||||
Note: (1) Excludes 16 executive officers who served primarily as executive officers at our subsidiaries.
| 7. | Major Shareholders and Related Party Transactions |
| 7.1. | Major Shareholders |
The following table presents information regarding holders of 5% or more of our total issued shares based on our shareholder registry as of December 31, 2021, unless specified otherwise.
| (Unit: shares, %) | ||||||||
Name | Number of Shares of Common Stock | Percentage of Total Issued Shares(1) | ||||||
Korean National Pension Service | 37,626,516 | (2) | 9.05 | |||||
JP Morgan Chase Bank, N.A.(3) | 23,929,641 | 5.76 | ||||||
BlackRock Fund Advisors(4) | 25,050,939 | 6.02 | ||||||
| Notes: (1) | Based on 415,807,920 shares of our common stock issued as of December 31, 2021. |
| (2) | The Korean National Pension Service held 37,188,199 shares of our common stock, constituting 8.94% of our total issued shares, as of January 27, 2022 based on disclosure made by the Korean National Pension Service in a statement of disposal filing on February 4, 2022. |
| (3) | Depositary under the Company’s ADR program. The voting rights are held by ADR holders. |
| (4) | The above number of shares and the percentage of total issued shares held by BlackRock Fund Advisors are as of February 26, 2021 and are based on disclosure made by BlackRock Fund Advisors in a statement of acquisition filing on March 10, 2021. |
| 7.2. | Changes in the Largest Shareholder |
| (Unit: shares, %) | ||||||||||||
Name of Largest Shareholder | Date of Change in Largest Shareholder/Date of Change in Number of Shares Owned | Number of Shares of Common Stock(1) | Percentage of Total Issued Shares(2) | |||||||||
Korean National Pension Service | 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 | 9.96 | |||||||||
Korean National Pension Service | December 31, 2020 | 41,287,280 | 9.93 | |||||||||
Korean National Pension Service | June 30, 2021 | 40,626,942 | 9.77 | |||||||||
Korean National Pension Service | December 31, 2021 | 37,626,516 | 9.05 | |||||||||
Korean National Pension Service | January 27, 2022 | 37,188,199 | (4) | 8.94 | ||||||||
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 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 disclosure made by the Korean National Pension Service in a statement of disposal filing on February 4, 2022. |
| 7.3. | Employee Stock Ownership Association |
| (As of December 31, 2021) | (Unit: shares) | |||
Company Name | Number of Shares of Common Stock Owned | |||
KB Financial Group Inc. | 50,879 | |||
Kookmin Bank | 6,739,397 | |||
KB Securities Co., Ltd. | 32,609 | |||
KB Insurance Co., Ltd. | 414,510 | |||
KB Kookmin Card Co., Ltd. | 321,861 | |||
Prudential Life Insurance | 474 | |||
KB Asset Management Co., Ltd. | 10,659 | |||
KB Capital Co., Ltd. | 32,514 | |||
KB Life Insurance Co., Ltd. | 20,178 | |||
KB Real Estate Trust Co., Ltd. | 13,726 | |||
KB Savings Bank Co., Ltd. | 8,064 | |||
KB Investment Co., Ltd. | 983 | |||
KB Data Systems Co., Ltd. | 19,277 | |||
KB Credit Information Co., Ltd. | 11,481 | |||
Others(1) | 5,959 | |||
|
| |||
Total | 7,682,571 | |||
|
| |||
Note: | (1) | Shares of common stock attributable to an account owned by the employee stock ownership association of KB Financial Group. |
| 7.4. | Investments in Affiliated Companies |
| (As of December 31, 2021) | (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 | 483,564,898 | 2,590,764 | |||||||||||||||
KB Securities Co., Ltd. | 298,620,424 | 100 | 3,342,391 | 55,493,986 | 594,301 | |||||||||||||||
KB Insurance Co., Ltd. | 66,500,000 | 100 | 2,375,430 | 41,472,227 | 301,836 | |||||||||||||||
KB Kookmin Card Co., Ltd. | 92,000,000 | 100 | 1,953,175 | 27,349,561 | �� | 418,898 | ||||||||||||||
Prudential Life Insurance | 15,000,000 | 100 | 2,310,054 | 24,397,804 | 336,198 | |||||||||||||||
KB Asset Management Co., Ltd. | 7,667,550 | 100 | 96,312 | 375,739 | 79,899 | |||||||||||||||
KB Capital Co., Ltd. | 32,175,147 | 100 | 673,811 | 14,553,877 | 209,899 | |||||||||||||||
KB Life Insurance Co., Ltd. | 91,200,000 | 100 | 485,314 | 10,634,562 | (46,595 | ) | ||||||||||||||
KB Real Estate Trust Co., Ltd. | 16,000,000 | 100 | 121,553 | 496,523 | 81,480 | |||||||||||||||
KB Savings Bank Co., Ltd. | 8,001,912 | 100 | 176,813 | 2,600,960 | 18,932 | |||||||||||||||
KB Investment Co., Ltd. | 22,525,328 | 100 | 154,910 | 1,197,720 | 55,338 | |||||||||||||||
KB Data Systems Co., Ltd. | 800,000 | 100 | 6,334 | 43,062 | 467 | |||||||||||||||
KB Credit Information Co., Ltd. | 1,252,400 | 100 | 23,620 | 28,674 | 388 | |||||||||||||||
|
|
|
|
|
|
|
|
|
| |||||||||||
Total | — | — | 26,741,438 | — | — | |||||||||||||||
|
|
|
|
|
|
|
|
|
| |||||||||||
Note: | (1) | Based on K-IFRS (on a consolidated basis), unless specified otherwise (except Prudential Life Insurance, which is 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 | 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 | 6.548%(1) | March 27, 2045 (may be extended) | Working capital | |||||||
| Note: | (1) The interest rate has increased from its initial rate due to the non-exercise of the call option. |
| (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 | 5.989%(1) | September 24, 2045 (may be extended) | Working capital | |||||||
| Note: | (1) The interest rate has increased from its initial rate due to the non-exercise of the call option. |
| (Unit: in billions of Won) | ||||||||||||||
Issuer | Relationship | Type | Issue | 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 | 6.305% | March 29, 2046 (may be extended) | Working capital | |||||||
| Note: | (1) The interest rate has increased from its initial rate due to the non-exercise of the call option. |
| (Unit: in billions of Won) | ||||||||||||||
Issuer | Relationship | Type | Issue | 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 | 6.466% | June 28, 2046 (may be extended) | Working capital | |||||||
| Note: | (1) The interest rate has increased from its initial rate due to the non-exercise of the call option. |
| (Unit: in billions of Won) | ||||||||||||||
Issuer | Relationship | Type | Issue | 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 | 6.952% | November 28, 2046 (may be extended) | Working capital | |||||||
| Note: | (1) The interest rate has increased from its initial rate due to the non-exercise of the call option. |
| (Unit: in billions of Won) | ||||||||||||||
Issuer | Relationship | Type | Issue | 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 | |||||||
| (Unit: in billions of Won) | ||||||||||||||
Issuer | Relationship | Type | Issue | Issue Date | Interest | Maturity Date | Use of | |||||||
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. Purchase of subordinated bonds issued by KB Savings Bank Co., Ltd.
| (Unit: in billions of Won) | ||||||||||||||
Issuer | Relationship | Type | Issue | Issue Date | Interest | Maturity Date | Use of | |||||||
KB Savings Bank Co., Ltd. | Subsidiary | No. 1 Subordinated Bonds in Won | 70 | June 25, 2021 | 1.600% | June 25, 2031 | Working capital | |||||||
7.5.3. 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 | 2.239%(2) | July 12, 20212 | |||||||
Notes: (1) Unsecured credit loans.
(2) Changed from 2.141% to 2.239% upon extension of the loans on July 12, 2021.
| (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 | 2.239%(2) | July 12, 2022 | |||||||
Notes: (1) Unsecured credit loans.
(2) Changed from 2.141% to 2.239% upon extension of the loans on July 12, 2021.
| (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 | 2.245%(2) | March 8, 2022 | |||||||
Notes: (1) Unsecured credit loans.
(2) Changed from 2.189% to 2.245% upon extension of the loans on March 9, 2021.
| (Unit: in billions of Won) | ||||||||||||||
Name | Relationship | Account | Loan Amount | Current | Credit Offering | Interest | Maturity Date | |||||||
KB Investment Co., Ltd. | Subsidiary | Loans(1) | 30 | 30 | March 9, 2020 | 2.245%(2) | March 8, 2022 | |||||||
Notes: (1) Unsecured credit loans.
(2) Changed from 2.189% to 2.245% upon extension of the loans on March 9, 2021.
| (Unit: in billions of Won) | ||||||||||||||
Name | Relationship | Account | Loan Amount | Current | Credit Offering | Interest | Maturity Date | |||||||
KB Investment Co., Ltd. | Subsidiary | Loans(1) | 30 | 30 | July 13, 2020 | 2.239%(2) | July 12, 2022 | |||||||
Notes: (1) Unsecured credit loans.
(2) Changed from 2.141% to 2.239% upon extension of the loans on July 12, 2021.
| (Unit: in billions of Won) | ||||||||||||||
Name | Relationship | Account | Loan Amount | Current | Credit Offering Date | Interest | Maturity Date | |||||||
KB Investment Co., Ltd. | Subsidiary | Loans(1) | 70 | 70 | December 20, 2021 | 2.247% | December 19, 2022 | |||||||
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: March 17, 2022 | By: /s/ Scott Y. H. Seo | |||||||
| (Signature) | ||||||||
| Name: | Scott Y. H. Seo | |||||||
| Title: | Senior Managing Director and Chief Finance Officer | |||||||
