Table of Contents
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
Form 6-K
REPORT OF FOREIGN PRIVATE ISSUER
PURSUANT TO RULE 13a-16 OR 15d-16 UNDER
THE SECURITIES EXCHANGE ACT OF 1934
For the month of May 2022
Commission File Number: 000-53445
KB Financial Group Inc.
(Translation of registrant’s name into English)
26, Gukjegeumyung-ro 8-gil, Yeongdeungpo-gu, Seoul 07331, Korea
(Address of principal executive office)
Indicate by check mark whether the registrant files or will file annual reports under cover of Form 20-F or Form 40-F.
Form 20-F ☒ Form 40-F ☐
Indicate by check mark if the registrant is submitting the Form 6-K in paper as permitted by Regulation S-T Rule 101(b)(1): ☐
Note: Regulation S-T Rule 101(b)(1) only permits the submission in paper of a Form 6-K if submitted solely to provide an attached annual report to security holders.
Indicate by check mark if the registrant is submitting the Form 6-K in paper as permitted by Regulation S-T Rule 101(b)(7): ☐
Note: Regulation S-T Rule 101(b)(7) only permits the submission in paper of a Form 6-K if submitted to furnish a report or other document that the registrant foreign private issuer must furnish and make public under the laws of the jurisdiction in which the registrant is incorporated, domiciled or legally organized (the registrant’s “home country”), or under the rules of the home country exchange on which the registrant’s securities are traded, as long as the report or other document is not a press release, is not required to be and has not been distributed to the registrant’s security holders, and, if discussing a material event, has already been the subject of a Form 6-K submission or other Commission filing on EDGAR.
Table of Contents
Table of Contents
Table of Contents
Summary of 2022 First Quarter Business Report
On May 16, 2022, KB Financial Group Inc. (“KB Financial Group” or the “Group”) filed its business report for the first quarter of 2022 (the “Business Report”) with the Financial Services Commission of Korea and the Korea Exchange. This is a summary of the Business Report translated into English.
Except where indicated otherwise, financial information contained in this summary have been prepared in accordance with the Korean equivalent of International Financial Reporting Standards (“K-IFRS”), which differ in certain important respects from generally accepted accounting principles in the United States.
All references to “KB Financial Group,” “we,” “us” or the “Company” are to KB Financial Group and, unless the context requires otherwise, its subsidiaries. In addition, all references to “Won” or “KRW” in this document are to the currency of the Republic of Korea.
Table of Contents
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 |
[No longer required to be disclosed in quarterly reports pursuant to revised Korean regulations]
1.3. | Overview of the Business Group |
[No longer required to be disclosed in quarterly reports pursuant to revised Korean regulations]
1.4. | Capital Structure |
1.4.1. | Common Shares |
Changes in Capital
(As of March 31, 2022) | (Unit: Won, shares) | |||||||||||||||
Date | Type | Number of Shares Issued or Cancelled | Par Value | Price | Remarks | |||||||||||
September 29, 2008 | Common Stock | 356,351,693 | 5,000 | 48,444 | Establishment of the Company | |||||||||||
September 2, 2009 | Common Stock | 30,000,000 | 5,000 | 37,250 | % increase in number of common shares: 8.41865% | |||||||||||
October 19, 2016 | Common Stock | 31,759,844 | 5,000 | 35,474 | % increase in number of common shares: 8.22045% | |||||||||||
December 12, 2019 | Common Stock | 2,303,617 | 5,000 | — | Share Cancellation(1) | |||||||||||
February 14, 2022 | Common Stock | 3,455,426 | 5,000 | — | Share Cancellation(1) |
Note: (1) | The cancelled shares constituted treasury shares acquired pursuant to a resolution of the board of directors of the Company within the limits of profit available for dividend payment, and as such, there was no change in paid-in capital. |
Number of Shares
(As of March 31, 2022) | (Unit: shares) | |||||||||||||
Type | ||||||||||||||
Common Shares | Preferred Shares | Total | Remarks | |||||||||||
Shares Authorized for Issuance | 1,000,000,000 | — | 1,000,000,000 | As specified in the Articles of Incorporation | ||||||||||
Total Shares Issued (A) | 418,111,537 | — | 418,111,537 | — | ||||||||||
Decrease in Number of Shares (B) | 5,759,043 | — | 5,759,043 | — | ||||||||||
1. Capital Reduction | — | — | — | — | ||||||||||
2. Cancellation | 5,759,043 | — | 5,759,043 | Treasury Shares | ||||||||||
3. Redemption | — | — | — | — | ||||||||||
4. Other | — | — | — | — | ||||||||||
Shares Issued as of December 31, 2021 (C=A-B) | 412,352,494 | — | 412,352,494 | — | ||||||||||
Treasury Shares (D) | 22,718,159 | — | 22,718,159 | — | ||||||||||
Shares Outstanding (C-D) | 389,634,335 | — | 389,634,335 | — |
Notes: (1) | The treasury shares above include five million treasury shares that are expected to be exchanged for the exchangeable bonds issued by the Company on June 30, 2020. Such treasury shares are currently deposited with Korea Securities Depositary and will be disposed upon the exercise of the exchange option of the exchangeable bonds. For more information, please refer to the Company’s report on Form 6-K furnished to the Securities and Exchange Commission on June 18, 2020. |
1.4.2. Voting Rights
[No longer required to be disclosed in quarterly reports pursuant to revised Korean regulations]
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.
Table of Contents
(Unit: in millions of Won, except per share amounts and percentages) | ||||||||||||||||
Items | January 1, 2022 to March 31, 2022(1) | January 1, 2021 to December 31, 2021(2) | January 1, 2020 to December 31, 2020(3) | |||||||||||||
Par value per share (Won) |
| 5,000 | 5,000 | 5,000 | ||||||||||||
(Consolidated) Net income |
| 1,453,126 | 4,409,543 | 3,455,151 | ||||||||||||
(Consolidated) Earnings per share (Won) |
| 3,672 | 11,134 | 8,809 | ||||||||||||
Total cash dividends |
| 194,817 | 1,145,525 | 689,653 | ||||||||||||
Total stock dividends |
| — | — | — | ||||||||||||
(Consolidated) Cash dividend payout ratio (%) |
| 13.4 | 26.0 | 20.0 | ||||||||||||
Cash dividend yield (%) | Common Shares | 0.8 | 5.2 | 3.9 | ||||||||||||
— | — | — | — | |||||||||||||
Stock dividend yield (%) | Common Shares | — | — | — | ||||||||||||
— | — | — | — | |||||||||||||
Cash dividend per share (Won) | Common Shares | 500 | 2,940 | 1,770 | ||||||||||||
— | — | — | ||||||||||||||
Stock dividend per share | Common Shares | — | — | |||||||||||||
— | — | — |
Notes: | (1) | Includes a quarterly dividend amount of Won 194,817 million (Won 500 per common share) for the first quarter of Fiscal Year 2022. |
(2) | Includes a 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 Year 2020 has been restated retrospectively as Won 3,468,448 million (consolidated earnings per share of Won 8,843, consolidated cash dividend payout ratio of 19.9%) to reflect the accounting policy changes in connection with the IFRIC decision regarding K-IFRS No. 1019. |
1.6. | Amendments to the Articles of Incorporation |
[No longer required to be disclosed in quarterly reports pursuant to revised Korean regulations]
Table of Contents
2. | Business |
2.1. | Results of Operations |
(Unit: in millions of Won) | ||||||||||||||||
For the three months ended March 31, 2022 | For the three months ended March 31, 2021 | For the year ended December 31, 2021 | For the year ended December 31, 2020 | |||||||||||||
Net interest income | 3,061,090 | 2,642,300 | 11,229,572 | 9,722,274 | ||||||||||||
Interest income | 4,309,711 | 3,624,937 | 15,210,878 | 14,485,747 | ||||||||||||
Interest expense | (1,248,621 | ) | (982,637 | ) | (3,981,306 | ) | (4,763,473 | ) | ||||||||
Net fee and commission income | 914,997 | 967,179 | 3,625,583 | 2,958,939 | ||||||||||||
Fee and commission income | 1,337,135 | 1,359,038 | 5,323,606 | 4,527,024 | ||||||||||||
Fee and commission expense | (422,138 | ) | (391,859 | ) | (1,698,023 | ) | (1,568,085 | ) | ||||||||
Net insurance income | 126,098 | 174,214 | 556,711 | 299,993 | ||||||||||||
Insurance income | 4,199,946 | 4,255,602 | 16,107,858 | 14,386,640 | ||||||||||||
Insurance expense | (4,073,848 | ) | (4,081,388 | ) | (15,551,147 | ) | (14,086,647 | ) | ||||||||
Net gains on financial assets/liabilities at fair value through profit or loss | 86,286 | 224,960 | 995,304 | 1,011,366 | ||||||||||||
Net other operating expenses | (464,758 | ) | (365,365 | ) | (1,923,567 | ) | (1,499,930 | ) | ||||||||
General and administrative expenses | (1,691,786 | ) | (1,723,275 | ) | (7,200,853 | ) | (6,814,812 | ) | ||||||||
Operating profit before provision for credit losses | 2,031,927 | 1,920,013 | 7,282,750 | 5,677,830 | ||||||||||||
Provision for credit losses | (130,105 | ) | (173,395 | ) | (1,185,133 | ) | (1,043,498 | ) | ||||||||
Net operating profit | 1,901,822 | 1,746,618 | 6,097,617 | 4,634,332 |
Notes: | (1) | Based on K-IFRS (on a consolidated basis). |
(2) | Figures for the three months ended March 31, 2021 have been restated retrospectively to reflect the accounting policy changes in connection with the IFRIC decision regarding K-IFRS No. 1019, and the related information is included in KB Financial Group’s consolidated financial statements attached as Exhibit 99.1 hereto. |
Table of Contents
2.2. | Sources and Uses of Funds |
2.2.1. Sources of Funds
(Unit: in millions of Won) | ||||||||||||||||||||||||||||||||||||||
For the three months ended March 31, 2022 | For the year ended December 31, 2021 | For the year ended December 31, 2020 | ||||||||||||||||||||||||||||||||||||
Average Balance | Interest Rate (%) | Ratio (%) | Average Balance | Interest Rate (%) | Ratio (%) | Average Balance | Interest Rate (%) | Ratio (%) | ||||||||||||||||||||||||||||||
Won Currency | Deposits | 329,452,261 | 0.89 | 49.34 | 309,428,469 | 0.74 | 49.09 | 286,168,968 | 1.07 | 50.88 | ||||||||||||||||||||||||||||
Certificate of deposit | 4,431,668 | 1.47 | 0.66 | 3,618,303 | 0.87 | 0.57 | 3,635,870 | 1.37 | 0.65 | |||||||||||||||||||||||||||||
Borrowings | 27,794,630 | 1.31 | 4.16 | 24,900,706 | 0.96 | 3.95 | 17,330,480 | 1.20 | 3.08 | |||||||||||||||||||||||||||||
Call money | 1,047,682 | 1.18 | 0.16 | 1,324,902 | 0.65 | 0.21 | 1,617,841 | 0.65 | 0.29 | |||||||||||||||||||||||||||||
Debentures | 57,941,005 | 2.00 | 8.68 | 57,214,310 | 1.82 | 9.08 | 52,843,837 | 2.02 | 9.39 | |||||||||||||||||||||||||||||
Others | 18,853,188 | 1.51 | 2.82 | 20,305,205 | 0.84 | 3.22 | 19,792,619 | 1.01 | 3.52 | |||||||||||||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| |||||||||||||||||||||
Subtotal | 439,520,434 | 1.10 | 65.82 | 416,791,895 | 0.91 | 66.12 | 381,389,615 | 1.21 | 67.81 | |||||||||||||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| |||||||||||||||||||||
Foreign Currency | Deposits | 30,053,264 | 1.53 | 4.50 | 26,607,162 | 1.70 | 4.22 | 20,488,109 | 1.46 | 3.64 | ||||||||||||||||||||||||||||
Borrowings | 16,945,092 | 1.06 | 2.54 | 12,976,574 | 1.16 | 2.06 | 12,071,802 | 1.81 | 2.15 | |||||||||||||||||||||||||||||
Call money | 1,271,298 | 1.05 | 0.19 | 995,957 | 0.75 | 0.16 | 976,153 | 0.97 | 0.17 | |||||||||||||||||||||||||||||
Debentures | 10,346,339 | 1.55 | 1.55 | 8,544,738 | 1.49 | 1.36 | 6,535,922 | 1.84 | 1.16 | |||||||||||||||||||||||||||||
Others | 1,999,568 | 0.60 | 0.30 | 2,029,862 | 0.82 | 0.32 | 1,126,379 | 1.12 | 0.20 | |||||||||||||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| |||||||||||||||||||||
Subtotal | 60,615,561 | 1.36 | 9.08 | 51,154,293 | 1.47 | 8.12 | 41,198,365 | 1.60 | 7.32 | |||||||||||||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| |||||||||||||||||||||
Others | Total shareholders’ equity | 48,783,502 | — | 7.31 | 46,705,724 | — | 7.41 | 41,495,072 | — | 7.38 | ||||||||||||||||||||||||||||
Allowances | 1,044,936 | — | 0.16 | 1,040,835 | — | 0.17 | 912,721 | — | 0.16 | |||||||||||||||||||||||||||||
Others | 117,762,511 | — | 17.63 | 114,646,087 | — | 18.18 | 97,476,975 | — | 17.33 | |||||||||||||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| |||||||||||||||||||||
Subtotal | 167,590,949 | — | 25.10 | 162,392,646 | — | 25.76 | 139,884,768 | — | 24.87 | |||||||||||||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| |||||||||||||||||||||
Total | 667,726,944 | — | 100.00 | 630,338,834 | — | 100.00 | 562,472,748 | — | 100.00 | |||||||||||||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Note: | Based on K-IFRS (on a consolidated basis). |
Table of Contents
2.2.2. Uses of Funds
(Unit: in millions of Won) | ||||||||||||||||||||||||||||||||||||||
For the three months ended March 31, 2022 | For the year ended December 31, 2021 | For the year ended December 31, 2020 | ||||||||||||||||||||||||||||||||||||
Average Balance | Interest Rate (%) | Ratio (%) | Average Balance | Interest Rate (%) | Ratio (%) | Average Balance | Interest Rate (%) | Ratio (%) | ||||||||||||||||||||||||||||||
Won Currency | Due from banks | 14,668,832 | 0.38 | 2.20 | 15,212,672 | 0.30 | 2.41 | 7,400,343 | 0.67 | 1.32 | ||||||||||||||||||||||||||||
Securities | 154,737,563 | 0.64 | 23.17 | 147,320,309 | 1.31 | 23.37 | 125,573,646 | 1.97 | 22.33 | |||||||||||||||||||||||||||||
Loans | 358,830,025 | 3.08 | 53.74 | 340,131,319 | 2.80 | 53.96 | 315,871,106 | 2.98 | 56.16 | |||||||||||||||||||||||||||||
Guarantee payments under payment guarantee | 3,752 | 0.53 | — | 5,053 | 1.31 | — | 13,421 | 0.73 | — | |||||||||||||||||||||||||||||
Call loan | 883,016 | 1.31 | 0.13 | 695,721 | 0.67 | 0.11 | 885,951 | 0.73 | 0.16 | |||||||||||||||||||||||||||||
Private placement corporate bonds | 729,512 | 3.22 | 0.11 | 882,497 | 3.02 | 0.14 | 1,264,212 | 3.98 | 0.22 | |||||||||||||||||||||||||||||
Credit cards | 20,946,145 | 7.08 | 3.14 | 19,862,308 | 7.09 | 3.15 | 18,560,207 | 7.57 | 3.30 | |||||||||||||||||||||||||||||
Others | 4,655,193 | 7.90 | 0.70 | 4,193,384 | 6.53 | 0.67 | 4,614,823 | 5.04 | 0.82 | |||||||||||||||||||||||||||||
Allowance | (2,668,288 | ) | — | (0.40 | ) | (2,480,441 | ) | — | (0.39 | ) | (2,416,823 | ) | — | (0.43 | ) | |||||||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| |||||||||||||||||||||
Subtotal | 552,785,750 | 2.53 | 82.79 | 525,822,822 | 2.51 | 83.42 | 471,766,886 | 2.89 | 83.88 | |||||||||||||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| |||||||||||||||||||||
Foreign Currency | Due from banks | 8,780,556 | 0.30 | 1.31 | 6,868,969 | 0.38 | 1.09 | 6,989,553 | 0.64 | 1.24 | ||||||||||||||||||||||||||||
Securities | 18,005,850 | 1.67 | 2.70 | 16,052,962 | 3.90 | 2.55 | 15,131,521 | 3.87 | 2.69 | |||||||||||||||||||||||||||||
Loans | 31,214,315 | 4.90 | 4.67 | 26,409,776 | 5.05 | 4.19 | 19,818,889 | 4.30 | 3.52 | |||||||||||||||||||||||||||||
Call loan | 4,813,305 | 0.40 | 0.72 | 3,275,072 | 0.45 | 0.52 | 3,149,433 | 0.82 | 0.56 | |||||||||||||||||||||||||||||
Bills bought | 2,290,026 | 0.96 | 0.34 | 1,940,984 | 0.73 | 0.31 | 1,573,725 | 1.48 | 0.28 | |||||||||||||||||||||||||||||
Allowance | (1,102,295 | ) | — | (0.17 | ) | (978,088 | ) | — | (0.16 | ) | (404,041 | ) | — | (0.07 | ) | |||||||||||||||||||||||
Others | 2,074,123 | — | 0.33 | 2,229,707 | — | 0.35 | 1,294,119 | — | 0.22 | |||||||||||||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| |||||||||||||||||||||
Subtotal | 66,075,880 | 2.89 | 9.90 | 55,799,382 | 3.63 | 8.85 | 47,553,199 | 3.24 | 8.44 | |||||||||||||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| |||||||||||||||||||||
Others | Cash | 1,930,955 | — | 0.29 | 1,917,967 | — | 0.30 | 1,889,892 | — | 0.34 | ||||||||||||||||||||||||||||
Fixed assets held for business | 8,071,048 | — | 1.21 | 8,130,268 | — | 1.29 | 8,048,120 | — | 1.43 | |||||||||||||||||||||||||||||
Others | 38,863,311 | — | 5.81 | 38,668,395 | — | 6.14 | 33,214,651 | — | 5.91 | |||||||||||||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| |||||||||||||||||||||
Subtotal | 48,865,314 | — | 7.31 | 48,716,630 | — | 7.73 | 43,152,663 | — | 7.68 | |||||||||||||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| |||||||||||||||||||||
Total | 667,726,944 | — | 100.00 | 630,338,834 | — | 100.00 | 562,472,748 | — | 100.00 | |||||||||||||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Note: Based on K-IFRS (on a consolidated basis).
Table of Contents
2.3. Other Information to Consider in Making an Investment Decision
2.3.1. Capital Adequacy
KB Financial Group(1) | (Unit: in billions of Won, except percentages) | |||||||||||
As of March 31, 2022(3) | As of December 31, 2021 | As of December 31, 2020(2) | ||||||||||
Total capital (A) | 47,265 | 45,883 | 40,080 | |||||||||
Risk-weighted assets (B) | 297,233 | 290,914 | 262,349 | |||||||||
BIS ratio (A/B) | 15.90% | 15.77% | 15.28% |
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. |
(3) The figures as of March 31, 2022 are preliminary |
Kookmin Bank(1) | (Unit: in billions of Won, except percentages) | |||||||||||
As of March 31, 2022 | As of December 31, 2021 | As of December 31, 2020(2) | ||||||||||
Total capital (A) | 36,042 | 35,572 | 32,555 | |||||||||
Risk-weighted assets (B) | 203,602 | 203,569 | 183,148 | |||||||||
BIS ratio (A/B) | 17.70% | 17.47% | 17.78% |
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 March 31, 2022 | As of December 31, 2021 | As of December 31, 2020 | ||||||||||
Net operating capital (A) | 4,217 | 3,982 | 3,656 | |||||||||
Total amount at risk (B) | 2,404 | 2,072 | 1,678 | |||||||||
Maintenance equity margin (C) | 134 | 134 | 134 | |||||||||
Net capital ratio (A-B)/(C) | 1,350.8% | 1,422.3% | 1,474.1% | |||||||||
Capital surplus (A-B) | 1,813 | 1,909 | 1,979 |
KB Insurance Co., Ltd. | (Unit: in billions of Won, except percentages) | |||||||||||
As of March 31, 2022 | As of December 31, 2021 | As of December 31, 2020 | ||||||||||
Available capital (A) | 3,999 | 4,349 | 3,812 | |||||||||
Required capital (B) | 2,464 | 2,424 | 2,181 | |||||||||
RBC ratio (A/B) | 162.3% | 179.4% | 174.8% |
Note: | The RBC ratio figure as of March 31, 2022 is preliminary. |
2.3.2. Overseas Credit Ratings
[No longer required to be disclosed in quarterly reports pursuant to revised Korean regulations]
2.3.3. Domestic Credit Ratings
[No longer required to be disclosed in quarterly reports pursuant to revised Korean regulations]
Table of Contents
2.3.4. Early Retirement Program
To enhance productivity by improving its labor structure, Kookmin Bank implemented a voluntary early retirement program following negotiations with its labor union.
Subsidiary | Date of Retirement | Number of Retired Persons | ||
Kookmin Bank | January 30, 2021 | 800 | ||
January 21, 2022 | 674 |
2.3.5. The Ongoing COVID-19 Pandemic and Other Factors Affecting the Group’s Financial Condition and Results of Operations
The ongoing COVID-19 pandemic has resulted in significant global and domestic economic and financial disruptions in recent years. 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 as well as the ongoing military conflict involving Russia and Ukraine, 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.
Table of Contents
3. | Financial Information |
3.1. | Consolidated Financial Information |
3.1.1. Consolidated Statements of Financial Position
(Unit: in millions of Won) | ||||||||||||
As of March 31, 2022 | As of December 31, 2021 | As of December 31, 2020 | ||||||||||
Cash and due from financial institutions | 28,984,257 | 31,009,374 | 25,608,842 | |||||||||
Financial assets at fair value through profit or loss | 68,100,541 | 66,005,815 | 61,035,455 | |||||||||
Derivative financial assets | 4,987,905 | 3,721,370 | 5,545,385 | |||||||||
Loans measured at amortized cost | 425,398,025 | 417,900,273 | 377,166,984 | |||||||||
Financial investments | 106,445,794 | 104,847,871 | 98,695,426 | |||||||||
Investments in associates and joint ventures | 475,349 | 448,718 | 771,435 | |||||||||
Property and equipment | 5,234,562 | 5,239,898 | 5,433,554 | |||||||||
Investment property | 2,517,631 | 2,514,944 | 2,533,539 | |||||||||
Intangible assets | 3,228,855 | 3,266,357 | 3,351,133 | |||||||||
Net defined benefit assets | 90,996 | 100,083 | 50,597 | |||||||||
Current income tax assets | 183,279 | 98,798 | 109,772 | |||||||||
Deferred income tax assets | 165,444 | 159,093 | 65,058 | |||||||||
Assets held for sale | 210,158 | 237,318 | 197,727 | |||||||||
Assets of a disposal group held for sale | — | 171,749 | — | |||||||||
Other assets | 33,988,166 | 28,174,173 | 30,155,037 | |||||||||
|
|
|
|
|
| |||||||
Total assets | 680,010,962 | 663,895,834 | 610,719,944 | |||||||||
|
|
|
|
|
| |||||||
Financial liabilities at fair value through profit or loss | 13,125,733 | 12,088,980 | 11,810,058 | |||||||||
Derivative financial liabilities | 5,315,343 | 3,682,258 | 5,222,897 | |||||||||
Deposits | 374,429,525 | 372,023,918 | 338,580,220 | |||||||||
Borrowings | 60,336,137 | 56,912,374 | 49,827,156 | |||||||||
Debentures | 68,840,552 | 67,430,188 | 62,760,687 | |||||||||
Provisions | 812,365 | 808,604 | 714,903 | |||||||||
Net defined benefit liabilities | 266,500 | 225,521 | 239,567 | |||||||||
Current income tax liabilities | 1,013,821 | 662,672 | 764,981 | |||||||||
Deferred income tax liabilities | 939,874 | 1,470,981 | 1,177,799 | |||||||||
Insurance contract liabilities | 57,594,120 | 57,165,936 | 54,415,296 | |||||||||
Other liabilities | 49,197,635 | 43,130,482 | 41,804,023 | |||||||||
|
|
|
|
|
| |||||||
Total liabilities | 631,871,645 | 615,601,914 | 567,317,587 |
Table of Contents
As of March 31, 2022 | As of December 31, 2021 | As of December 31, 2020 | ||||||||||
Equity attributable to shareholders of the parent company | 47,258,695 | 47,460,582 | 42,544,574 | |||||||||
Share capital | 2,090,558 | 2,090,558 | 2,090,558 | |||||||||
Hybrid securities | 3,436,817 | 2,838,221 | 1,695,988 | |||||||||
Capital surplus | 16,940,231 | 16,940,231 | 16,723,589 | |||||||||
Accumulated other comprehensive income | (322,591 | ) | 1,047,274 | 630,011 | ||||||||
Accumulated other comprehensive income relating to assets of a disposal group held for sale | — | 7,671 | — | |||||||||
Retained earnings | 26,099,868 | 25,672,815 | 22,540,616 | |||||||||
Treasury shares | (986,188 | ) | (1,136,188 | ) | (1,136,188 | ) | ||||||
Non-controlling interests | 880,622 | 833,338 | 857,783 | |||||||||
|
|
|
|
|
| |||||||
Total equity | 48,139,317 | 48,293,920 | 43,402,357 | |||||||||
|
|
|
|
|
| |||||||
Total liabilities and equity | 680,010,962 | 663,895,834 | 610,719,944 | |||||||||
|
|
|
|
|
|
Table of Contents
3.1.2. Consolidated Statements of Comprehensive Income
(Unit: in millions of Won, except per share amounts) | ||||||||||||||||
For the three months ended March 31, 2022 | For the three months ended March 31, 2021 | For the year ended December 31, 2021 | For the year ended December 31, 2020 | |||||||||||||
Net interest income | 3,061,090 | 2,642,300 | 11,229,572 | 9,722,274 | ||||||||||||
Interest income | 4,309,711 | 3,624,937 | 15,210,878 | 14,485,747 | ||||||||||||
Interest income from financial instruments at fair value through other comprehensive income and amortized cost | 4,132,824 | 3,481,238 | 14,620,490 | 13,826,382 | ||||||||||||
Interest income from financial instruments at fair value through profit or loss | 176,887 | 143,699 | 590,388 | 659,365 | ||||||||||||
Interest expense | (1,248,621 | ) | (982,637 | ) | (3,981,306 | ) | (4,763,473 | ) | ||||||||
Net fee and commission income | 914,997 | 967,179 | 3,625,583 | 2,958,939 | ||||||||||||
Fee and commission income | 1,337,135 | 1,359,038 | 5,323,606 | 4,527,024 | ||||||||||||
Fee and commission expense | (422,138 | ) | (391,859 | ) | (1,698,023 | ) | (1,568,085 | ) | ||||||||
Net insurance income | 126,098 | 174,214 | 556,711 | 299,993 | ||||||||||||
Insurance income | 4,199,946 | 4,255,602 | 16,107,858 | 14,386,640 | ||||||||||||
Insurance expense | (4,073,848 | ) | (4,081,388 | ) | (15,551,147 | ) | (14,086,647 | ) | ||||||||
Net gains on financial assets/liabilities at fair value through profit or loss | 86,286 | 224,960 | 995,304 | 1,011,366 | ||||||||||||
Net gains (losses) on financial instruments at fair value through profit or loss before applying overlay approach | (76,997 | ) | 213,714 | 1,160,981 | 1,221,610 | |||||||||||
Gains (losses) on overlay adjustments | 163,283 | 11,246 | (165,677 | ) | (210,244 | ) | ||||||||||
Net other operating expenses | (464,758 | ) | (365,365 | ) | (1,923,567 | ) | (1,499,930 | ) | ||||||||
General and administrative expenses | (1,691,786 | ) | (1,723,275 | ) | (7,200,853 | ) | (6,814,812 | ) | ||||||||
Operating profit before provision for credit losses | 2,031,927 | 1,920,013 | 7,282,750 | 5,677,830 | ||||||||||||
Provision for credit losses | (130,105 | ) | (173,395 | ) | (1,185,133 | ) | (1,043,498 | ) | ||||||||
Net operating income | 1,901,822 | 1,746,618 | 6,097,617 | 4,634,332 | ||||||||||||
Net non-operating income (expenses) | 7,565 | 39,604 | (16,011 | ) | 145,640 | |||||||||||
Share of profit (loss) of associates and joint ventures | 8,350 | 59,710 | 93,526 | (43,750 | ) | |||||||||||
Net other non-operating income (expenses) | (785 | ) | (20,106 | ) | (109,537 | ) | 189,390 | |||||||||
Profit before income tax | 1,909,387 | 1,786,222 | 6,081,606 | 4,779,972 | ||||||||||||
Income tax expense | (445,285 | ) | (501,213 | ) | (1,697,225 | ) | (1,264,394 | ) | ||||||||
Profit for the year | 1,464,102 | 1,285,009 | 4,384,381 | 3,515,578 | ||||||||||||
Other comprehensive income (loss) for the year, net of tax | (1,369,443 | ) | (488,763 | ) | 222,758 | 472,270 | ||||||||||
Items that will not be reclassified to profit or loss: | (229,146 | ) | 45,527 | 871,654 | 817,524 |
Table of Contents
For the three months ended March 31, 2022 | For the three months ended March 31, 2021 | For the year ended December 31, 2021 | For the year ended December 31, 2020 | |||||||||||||
Remeasurements of net defined benefit liabilities | (10,685 | ) | (4,029 | ) | (45,510 | ) | (13,434 | ) | ||||||||
Share of other comprehensive income (loss) of associates and joint ventures | — | (2 | ) | 51 | (1 | ) | ||||||||||
Gains (losses) on equity securities at fair value through other comprehensive income | (217,647 | ) | 46,272 | 903,398 | 822,140 | |||||||||||
Fair value changes of financial liabilities designated at fair value through profit or loss due to own credit risk | (814 | ) | 3,286 | 13,715 | 8,819 | |||||||||||
Items that may be reclassified subsequently to profit or loss: | (1,140,297 | ) | (534,290 | ) | (648,896 | ) | (345,254 | ) | ||||||||
Currency translation differences | 84,069 | 101,160 | 255,907 | (187,283 | ) | |||||||||||
Gains (losses) on debt securities at fair value through other comprehensive income | (1,040,738 | ) | (583,821 | ) | (924,698 | ) | (356,572 | ) | ||||||||
Share of other comprehensive income (loss) of associates and joint ventures | 77 | 3 | 498 | (6,846 | ) | |||||||||||
Gains (losses) on cash flow hedging instruments | 31,246 | 8,439 | 20,864 | (1,264 | ) | |||||||||||
Gains (losses) on hedging instruments of net investments in foreign operations | (24,166 | ) | (32,871 | ) | (57,935 | ) | 64,269 | |||||||||
Other comprehensive losses arising from separate account | (72,452 | ) | (19,142 | ) | (63,814 | ) | (9,683 | ) | ||||||||
Gains (losses) on overlay adjustment | (118,333 | ) | (8,058 | ) | 120,282 | 152,125 | ||||||||||
Total comprehensive income for the year | 94,659 | 796,246 | 4,607,139 | 3,987,848 | ||||||||||||
Profit (losses) attributable to: | 1,464,102 | 1,285,009 | 4,384,381 | 3,515,578 | ||||||||||||
Shareholders of the parent company | 1,453,140 | 1,269,864 | 4,409,543 | 3,468,448 | ||||||||||||
Non-controlling interests | 10,962 | 15,145 | (25,162 | ) | 47,130 | |||||||||||
Total comprehensive income (expenses) for the year attributable to: | 94,659 | 796,246 | 4,607,139 | 3,987,848 | ||||||||||||
Shareholders of the parent company | 75,349 | 770,860 | 4,610,549 | 3,966,361 | ||||||||||||
Non-controlling interests | 19,310 | 25,386 | (3,410 | ) | 21,487 | |||||||||||
Earnings per share | ||||||||||||||||
Basic earnings per share (Won) | 3,672 | 3,224 | 11,134 | 8,843 | ||||||||||||
Diluted earnings per share (Won) | 3,591 | 3,161 | 10,890 | 8,730 |
Note: | Figures for the three months ended March 31, 2021 have been restated retrospectively to reflect the accounting policy changes in connection with the IFRIC decision regarding K-IFRS No. 1019, and the related information is included in KB Financial Group’s consolidated financial statements attached as Exhibit 99.1 hereto. |
Table of Contents
3.2. | Separate Financial Information |
3.2.1. Separate Statements of Financial Position
(Unit: in millions of Won) | ||||||||||||
As of March 31, 2022 | As of December 31, 2021 | As of December 31, 2020 | ||||||||||
Cash and due from financial institutions | 2,251,021 | 608,076 | 23,084 | |||||||||
Financial assets at fair value through profit or loss | 734,736 | 440,760 | 474,262 | |||||||||
Loans measured at amortized cost | 249,128 | 249,128 | 179,542 | |||||||||
Investments in subsidiaries | 26,741,438 | 26,741,438 | 26,519,880 | |||||||||
Property and equipment | 5,395 | 4,444 | 7,730 | |||||||||
Intangible assets | 16,118 | 16,673 | 13,267 | |||||||||
Net defined benefit assets | — | 221 | — | |||||||||
Deferred income tax assets | 6,954 | 5,583 | 3,189 | |||||||||
Other assets | 1,193,465 | 805,056 | 887,537 | |||||||||
|
|
|
|
|
| |||||||
Total assets | 31,198,255 | 28,871,379 | 28,108,491 | |||||||||
|
|
|
|
|
| |||||||
Borrowings | — | — | 100,000 | |||||||||
Debentures | 5,294,132 | 5,552,791 | 6,128,043 | |||||||||
Net defined benefit liabilities | 289 | — | 59 | |||||||||
Current income tax liabilities | 936,268 | 570,519 | 716,473 | |||||||||
Other liabilities | 1,108,150 | 235,095 | 178,296 | |||||||||
|
|
|
|
|
| |||||||
Total liabilities | 7,338,839 | 6,358,405 | 7,122,871 | |||||||||
|
|
|
|
|
| |||||||
Share capital | 2,090,558 | 2,090,558 | 2,090,558 | |||||||||
Hybrid securities | 3,436,562 | 2,837,981 | 1,695,778 | |||||||||
Capital surplus | 14,754,747 | 14,754,747 | 14,754,747 | |||||||||
Accumulated other comprehensive loss | (8,442 | ) | (8,330 | ) | (8,032 | ) | ||||||
Retained earnings | 4,572,179 | 3,974,206 | 3,588,757 | |||||||||
Treasury Shares | (986,188 | ) | (1,136,188 | ) | (1,136,188 | ) | ||||||
|
|
|
|
|
| |||||||
Total equity | 23,859,416 | 22,512,974 | 20,985,620 | |||||||||
|
|
|
|
|
| |||||||
Total liabilities and equity | 31,198,255 | 28,871,379 | 28,108,491 | |||||||||
|
|
|
|
|
|
Table of Contents
3.2.2. Separate Statements of Comprehensive Income
(Unit: in millions of Won, except per share amounts) | ||||||||||||||||
For the three months ended March 31, 2022 | For the three months ended March 31, 2021 | For the year ended December 31, 2021 | For the year ended December 31, 2020 | |||||||||||||
Net interest income | (24,742 | ) | (31,089 | ) | (111,077 | ) | (124,393 | ) | ||||||||
Interest income | 3,116 | 1,425 | 9,392 | 8,044 | ||||||||||||
Interest income from financial instruments at amortized cost | 2,455 | 1,205 | 6,548 | 3,788 | ||||||||||||
Interest income from financial instruments at fair value through profit or loss | 661 | 220 | 2,844 | 4,256 | ||||||||||||
Interest expense | (27,858 | ) | �� | (32,514 | ) | (120,469 | ) | (132,437 | ) | |||||||
Net fee and commission income | (767 | ) | (1,767 | ) | (8,157 | ) | (8,338 | ) | ||||||||
Fee and commission income | 803 | 231 | 975 | 841 | ||||||||||||
Fee and commission expense | (1,570 | ) | (1,998 | ) | (9,132 | ) | (9,179 | ) | ||||||||
Net gains (losses) on financial assets at fair value through profit or loss | (425 | ) | 5,416 | 20,250 | 12,663 | |||||||||||
Net other operating income | 1,671,224 | 1,447,949 | 1,620,238 | 1,571,239 | ||||||||||||
General and administrative expenses | (22,721 | ) | (23,533 | ) | (85,417 | ) | (71,854 | ) | ||||||||
Operating profit before provision for credit losses | 1,622,569 | 1,396,976 | 1,435,837 | 1,379,317 | ||||||||||||
Provision for credit losses | 3 | (2 | ) | (417 | ) | (465 | ) | |||||||||
Operating profit | 1,622,572 | 1,396,974 | 1,435,420 | 1,378,852 | ||||||||||||
Net non-operating income(loss) | (96 | ) | (298 | ) | 1,165 | 514 | ||||||||||
Profit before income tax | 1,622,476 | 1,396,676 | 1,436,585 | 1,379,366 | ||||||||||||
Income tax income(expense) | 1,329 | (244 | ) | 2,281 | 49 | |||||||||||
Profit for the year | 1,623,805 | 1,396,432 | 1,438,866 | 1,379,415 | ||||||||||||
Other comprehensive loss for the year, net of tax | (112 | ) | (28 | ) | (298 | ) | (368 | ) | ||||||||
Items that will not be reclassified to profit or loss: | (112 | ) | (28 | ) | (298 | ) | (368 | ) | ||||||||
Remeasurements of net defined benefit liabilities | (112 | ) | (28 | ) | (298 | ) | (368 | ) | ||||||||
|
|
|
|
|
|
|
| |||||||||
Total comprehensive income for the year | 1,623,693 | 1,396,404 | 1,438,568 | 1,379,047 | ||||||||||||
|
|
|
|
|
|
|
| |||||||||
Earnings per share | ||||||||||||||||
Basic earnings per share (Won) | 4,110 | 3,549 | 3,509 | 3,482 | ||||||||||||
Diluted earnings per share (Won) | 4,019 | 3,479 | 3,436 | 3,438 |
Table of Contents
3.3. | Other Selected Financial Data |
3.3.1. Won-denominated Liquidity Ratio
(Unit: in millions of Won, except percentages) | ||||||||||||
As of March 31, 2022 | As of December 31, 2021 | As of December 31, 2020 | ||||||||||
Current assets in Won (A) | 2,840,618 | 713,908 | 112,754 | |||||||||
Current liabilities in Won (B) | 1,390,289 | 317,184 | 92,328 | |||||||||
Liquidity ratio (A/B) | 204.32 | % | 225.08 | % | 122.12 | % |
Notes: (1) | Based on K-IFRS (on a separate basis). |
(2) | Calculated based on Won-denominated assets and liabilities due within one month. |
3.3.2. Profitability Ratios
(Unit: %) | ||||||||
For the three months ended March 31, 2022 | For the year ended | For the year ended | ||||||
Net income as a percentage of average total assets (ROA) | 0.88 | 0.69 | 0.61 | |||||
Net income as a percentage of average shareholders’ equity (ROE) | 12.44 | 9.80 | 8.64 |
Note: | Based on K-IFRS (on a consolidated basis). |
3.3.3. 20 Largest Exposures of Kookmin Bank by Borrower (As of March 31, 2022)
(Unit: in billions of Won) | ||||
Company | Credit Extended | |||
Samsung Electronics Co., Ltd. | 1,303 | |||
STRADA HOLDCO L.P. | 1,121 | |||
KB Kookmin Card Co., Ltd. | 1,112 | |||
Samsung Heavy Industries Co., Ltd. | 1,100 | |||
Hyundai Steel Co., Ltd. | 995 | |||
Hyundai Motor Company | 985 | |||
E-MART Inc. | 883 | |||
Kia Corporation | 873 | |||
Hyundai Heavy Industries Co., Ltd. | 863 | |||
GS Caltex Corporation | 833 | |||
Samsung SDI Co., Ltd. | 745 | |||
SK Inc | 739 | |||
LG Display Co., Ltd. | 701 | |||
S-Oil Corp. | 639 | |||
LS-Nikko Copper Inc. | 636 | |||
LG CHEM, LTD. | 621 | |||
PT Bank Bukopin Tbk | 605 | |||
CJ Cheiljedang Corp. | 604 | |||
POSCO | 574 | |||
LG Electronics Inc. | 542 | |||
|
| |||
Total | 16,474 | |||
|
|
Table of Contents
3.3.4. 10 Largest Exposures of Kookmin Bank by Chaebol Group (As of March 31, 2022)
(Unit: in billions of Won) | ||||
Group | Credit Extended | |||
Hyundai Motor | 4,732 | |||
Samsung | 4,706 | |||
SK | 4,226 | |||
LG | 2,671 | |||
Lotte | 2,449 | |||
Hyundai Heavy Industries | 2,411 | |||
Hanwha | 1,845 | |||
POSCO | 1,527 | |||
GS | 1,479 | |||
LS | 1,473 | |||
|
| |||
Total | 27,519 | |||
|
|
3.3.5. Kookmin Bank’s Loan Concentration by Industry (As of March 31, 2022)
(Unit: in billions of Won, except percentages) | ||||||||
Industry | Total Credit | Percentage of Total Credit | ||||||
Manufacturing | 52,327 | 28.7 | % | |||||
Construction | 3,427 | 1.9 | % | |||||
Real estate | 41,978 | 23.0 | % | |||||
Retail and wholesale | 27,768 | 15.2 | % | |||||
Hotel, lodging and food services | 10,006 | 5.5 | % | |||||
Financial institutions | 4,309 | 2.4 | % | |||||
Others | 42,319 | 23.3 | % | |||||
|
|
|
| |||||
Total | 182,134 | 100.0 | % | |||||
|
|
|
|
Table of Contents
3.3.6. Top 20 Non-Performing Loans of Kookmin Bank (As of March 31, 2022)
(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 | Retail and wholesale | 18.5 | 16.0 | |||||||
Borrower D | Publishing, film, broadcasting and information services | 17.5 | 13.6 | |||||||
Borrower E | Manufacturing | 14.4 | 6.0 | |||||||
Borrower F | Manufacturing | 8.6 | 3.1 | |||||||
Borrower G | Manufacturing | 7.0 | 2.4 | |||||||
Borrower H | Manufacturing | 6.8 | 3.9 | |||||||
Borrower I | Manufacturing | 6.3 | 5.7 | |||||||
Borrower J | Manufacturing | 5.8 | 1.3 | |||||||
Borrower K | Manufacturing | 5.4 | 2.0 | |||||||
Borrower L | Manufacturing | 5.2 | 1.7 | |||||||
Borrower M | Manufacturing | 4.9 | 1.6 | |||||||
Borrower N | Manufacturing | 4.9 | 0.5 | |||||||
Borrower O | Manufacturing | 4.6 | 3.6 | |||||||
Borrower P | Manufacturing | 4.5 | 3.4 | |||||||
Borrower Q | Retail and wholesale | 4.0 | 2.2 | |||||||
Borrower R | Manufacturing | 3.8 | 1.2 | |||||||
Borrower S | Manufacturing | 3.7 | 3.6 | |||||||
Borrower T | Retail and wholesale | 3.6 | 0.2 | |||||||
|
|
|
| |||||||
Total | — | 189.8 | 114.6 | |||||||
|
|
|
|
3.4. | Other Financial Information |
See Exhibits 99.1 and 99.2 attached hereto for our consolidated and separate financial statements and relevant notes, which have been prepared in accordance with K-IFRS and reviewed by our independent auditors as stated in their review reports. The review reports will also be available on our website at www.kbfg.com.
Table of Contents
4. | Independent Public Accountants |
4.1. | Audit / Review Services |
(Unit: in millions of Won) | ||||||||||||||||||||
Period | Auditor | Activity | Agreed Per Contract(1) | Actual(2) | ||||||||||||||||
Compensation(3) | Estimated Hours | Compensation(3) | Accrued Hours | |||||||||||||||||
January 1 to March 31, 2022 | KPMG Samjong Accounting Corp. | Quarterly, semi-annual and annual review & audit, review of internal accounting management system (including audit of internal control over financial reporting) | 1,291 | 11,364 | 437 | 1,579 | ||||||||||||||
January 1 to December 31, 2021 | KPMG Samjong Accounting Corp. | Quarterly, semi-annual and annual review & audit, review of internal accounting management system (including audit of internal control over financial reporting) | 1,261 | 11,364 | 1,261 | 11,451 | ||||||||||||||
January 1 to December 31, 2020 | KPMG Samjong Accounting Corp. | Quarterly, semi-annual and annual review & audit, review of internal accounting management system (including audit of internal control over financial reporting) | 1,246 | 11,570 | 1,246 | 12,624 | ||||||||||||||
January 1 to December 31, 2020 | KPMG Samjong Accounting Corp. | Expansion of the scope of audit in connection with the acquisition of Prudential Life Insurance | 481 | 4,829 | 481 | 4,846 |
Notes: | (1) | Total compensation and estimated hours are established at the time of the execution of the audit and review services contract. | ||
(2) | Actual compensation and hours are accrued from January 1 of each applicable year to the date of the audit or review report issued during such year. | |||
(3) | Excluding value-added taxes. |
Table of Contents
4.2. | Public Company Accounting Oversight Board (“PCAOB”) Audit Services |
(Unit: in millions of Won) | ||||||||||
Period | Auditor | Activity | Service Period | Compensation(1) | ||||||
January 1 to March 31, 2022 | KPMG Samjong Accounting Corp. | PCAOB audit of consolidated financial statements and internal control over financial reporting | May 1, 2022 to April 30, 2023 | 697 | ||||||
January 1 to December 31, 2021 | KPMG Samjong Accounting Corp. | PCAOB audit of consolidated financial statements and internal control over financial reporting | May 1, 2021 to April 30, 2022 | 681 | ||||||
January 1 to December 31, 2020 | KPMG Samjong Accounting Corp. | PCAOB audit of consolidated financial statements and internal control over financial reporting | May 1, 2020 to April 30, 2021 | 662 |
Note: | (1) Total compensation (excluding value-added taxes) is established at the time of the execution of the audit and review services contract. |
4.3. | Change in Auditor |
Pursuant to the Act on External Audit of Stock Companies and the related regulations thereunder, the Securities and Futures Commission of the Financial Services Commission designated KPMG Samjong Accounting Corp. as the new external auditor for the Company for the fiscal years ending December 31, 2020, 2021 and 2022. As such, the external auditor for the Company and its subsidiaries for the fiscal year ended December 31, 2021 continued to be KPMG Samjong Accounting Corp. Prudential Life Insurance, which kept Samil PricewaterhouseCoopers as its external auditor for the fiscal year ended December 31, 2020, has changed its external auditor for the fiscal year ended December 31, 2021 to KPMG Samjong Accounting Corp.
5. | Corporate Governance and Affiliated Companies |
5.1. | Board of Directors & Committees under the Board |
[No longer required to be disclosed in quarterly reports pursuant to revised Korean regulations]
5.2. | Audit Committee |
[No longer required to be disclosed in quarterly reports pursuant to revised Korean regulations]
5.3. | Compensation to Directors |
[No longer required to be disclosed in quarterly reports pursuant to revised Korean regulations]
5.4. | Top 5 Highest-Paid Individuals |
[No longer required to be disclosed in quarterly reports pursuant to revised Korean regulations]
Table of Contents
5.5. | Affiliated Companies |
[No longer required to be disclosed in quarterly reports pursuant to revised Korean regulations]
6. | Directors, Senior Management and Employees |
6.1. | Executive Directors |
As of March 31, 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 March 31, 2022 are set forth below.
Name | Date of Birth | Position | Common Shares Owned | End of Term | ||||
Jong Kyoo Yoon | October 1955 | Chairman & Chief Executive Officer | 21,000 | November 20, 2023 |
6.2. | Non-standing Directors |
As of March 31, 2022, we had one non-standing director. The name, position and the end of the term of our non-standing director and the number of shares of our common stock he owned as of March 31, 2022 are set forth below.
Name | Date of Birth | Position | Common Shares Owned | End of Term(1) | ||||
Jae Keun Lee | May 1966 | Non-standing Director | 119 | March 24, 2024 |
Note: (1) | The date designated as Mr. Jae Keun Lee’s end of term is the date of the annual general meeting of shareholders for fiscal year 2023, which is expected be held in March 2024. |
6.3. | Non-executive Directors |
As of March 31, 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 March 31, 2022 were as follows.
Name | Date of Birth | Position | Common Shares Owned | End of Term | ||||||
Suk Ho Sonu | September 1951 | Non-executive Director | 1,300 | March 24, 2023 | ||||||
Myung Hee Choi | February 1952 | Non-executive Director | — | March 24, 2023 | ||||||
Kouwhan Jeong | September 1953 | Non-executive Director | — | March 24, 2023 | ||||||
Kyung Ho Kim | December 1954 | Non-executive Director | — | March 24, 2023 | ||||||
Seon-joo Kwon | November 1956 | Non-executive Director | — | March 24, 2023 | ||||||
Gyutaeg Oh | February 1959 | Non-executive Director | — | March 24, 2023 | ||||||
Jaehong Choi | August 1962 | Non-executive Director | — | March 24, 2024 |
Table of Contents
As of March 31, 2022, the following non-executive director also served as a director at another company.
Name | Company | Position | Appointment Date | |||
Kouwhan Jeong | Nambujeil Law and Notary Office Inc. | Co-president Attorney at Law | May 2016 |
6.4. | Senior Management |
Members of our senior management as of March 31, 2022 are as follows.
Name | Date of Birth | Position | Common Shares Owned(1) | End of Term | ||||||
Yin Hur | December 1961 | Vice Chairman and Head of Retail Customer / Wealth Management & Pension Business / Small & Medium Enterprise Business Units | 13,506 | December 31, 2022 | ||||||
Dong Cheol Lee | October 1961 | Vice Chairman and Head of Global / Insurance Business Units | 3,325 | December 31, 2022 | ||||||
Jong Hee Yang | June 1961 | Vice Chairman and Head of Digital / IT Business Units | 914 | December 31, 2022 | ||||||
Woo Yeul Lee | November 1964 | Senior Executive Vice President and Chief Strategy Officer | 1,551 | 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 | ||||||
Scott S.Y. Seo | March 1966 | Senior Managing Director and Chief Finance Officer | — | December 31, 2022 | ||||||
Yeo Woon Yoon | April 1967 | Senior Managing Director and Chief Human Resources Officer | 520 | December 31, 2022 | ||||||
Jin Gyu Maeng | January 1966 | Senior Managing Director and Head of Audit | 951 | December 31, 2022 | ||||||
Hye Sook Moon | September 1971 | Managing Director and Head of ESG Division | 652 | December 31, 2023 | ||||||
Bong Joong Kwon | November 1969 | Managing Director and Head of IR | 286 | December 31, 2022 | ||||||
Byung Joo Oh | January 1973 | Managing Director, Insurance Business Unit | 711 | December 31, 2022 | ||||||
Hye Ja Suh | September 1966 | Managing Director and Chief Compliance Officer | 1,254 | December 31, 2022 | ||||||
Jeong Rim Park | November 1963 | Head of the Capital Market Business Unit | 3,150 | December 31, 2022 | ||||||
Sung Hyun Kim | August 1963 | Head of Corporate and Investment Banking Business Unit | 15,468 | December 31, 2022 | ||||||
Jin Young Kim | August 1969 | Chief Public Relation Officer | 765 | December 31, 2022 | ||||||
Chai Hyun Sung | September 1965 | Senior Executive Vice President, Retail Customer Business Unit | 7,799 | December 31, 2022 | ||||||
Jae Young Choi | June 1967 | Senior Managing Director, Wealth Management and Pension Business Unit | 854 | December 31, 2022 | ||||||
Mun Cheol Jeong | August 1968 | Senior Managing Director, Small and Medium Enterprise Business Unit | 2,349 | December 31, 2022 | ||||||
Nam Hoon Cho | June 1968 | Senior Managing Director and Chief Global Strategy Officer | 1,000 | December 31, 2022 | ||||||
Young Suh Cho | February 1971 | Chief Digital Platform Officer | — | December 31, 2022 | ||||||
Jin Soo Yoon | February 1964 | Chief Information Technology Officer | 133 | December 31, 2022 | ||||||
Sungpyo Jeon | August 1966 | Chief Contact Center Officer | 880 | 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 | 1,724 | December 31, 2022 | ||||||
Nam Che Kang | August 1967 | Head of Global Division | 226 | December 31, 2022 | ||||||
Chang Hwa Yook | December 1967 | Head of Data Division | 465 | December 31, 2022 | ||||||
Chan Yong Park | September 1965 | Head of Office of Planning and Coordination | 884 | 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 March 31, 2022 and includes those owned in the holder’s name under the employee stock ownership association’s account, and may differ from the number of shares owned as reported pursuant to Article 173 of the Financial Investment Services and Capital Markets Act. |
Table of Contents
As of March 17, 2022, the following management also served as senior management at our subsidiaries.
Name | Subsidiary | Position | Appointment Date | |||
Jae Keun Lee | Kookmin Bank | Chief Executive Officer | January 2022 | |||
Jeong Rim Park | KB Securities | Chief Executive Officer | January 2019 | |||
Sung Hyun Kim | KB Securities | Chief Executive Officer | January 2019 | |||
Hye Sook Moon | Kookmin Bank | Head of ESG Division | January 2022 | |||
Jin Young Kim | Kookmin Bank | Managing Director; Brand Strategy Group | January 2022 | |||
Chai Hyun Sung | Kookmin Bank | Senior Executive Vice President; Retail Customer Group | January 2020 | |||
Jae Young Choi | Kookmin Bank | Senior Managing Director; Wealth Management Group | January 2022 | |||
KB Securities | Senior Executive Vice President; Wealth Management Division | January 2022 | ||||
KB Insurance | Senior Managing Director; WM/Pension Division | January 2022 | ||||
Mun Cheol Jeong | Kookmin Bank | Senior Managing Director; SME and SOHO Customer Group | January 2022 | |||
Nam Hoon Cho | Kookmin Bank | Senior Managing Director; Global Business Group | January 2021 | |||
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 | |||
Nam Che Kang | Kookmin Bank | Head of Global Growth Supporting Division | January 2022 | |||
Chang Hwa Yook | Kookmin Bank | Head of Data Division | January 2022 | |||
Chan Yong Park | Kookmin Bank | Senior Managing Director; Planning & Coordination Department | January 2022 | |||
Yoo Shim Hur | Kookmin Bank | Managing Director; Digital Contents Center | January 2022 | |||
Joo Hyun Kim | Kookmin Bank | Head of Cloud Platform Department | February 2022 | |||
Woo Yeul Lee | KB Securities | Non-standing Director | February 2022 | |||
Prudential Life | Non-standing Director | February 2022 | ||||
Scott S.Y. Seo | KB Insurance | Non-standing Director | February 2022 | |||
KB Kookmin Card | Non-standing Director | March 2022 |
Table of Contents
6.5. | Employees |
[No longer required to be disclosed in quarterly reports pursuant to revised Korean regulations]
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 March 31, 2022, unless specified otherwise.
(Unit: shares, %) | ||||||||
Name | Number of Shares of Common Stock | Percentage of Total Issued Shares(1) | ||||||
Korean National Pension Service | 36,008,504 | 8.73 | ||||||
JP Morgan Chase Bank, N.A.(2) | 24,299,320 | 5.89 | ||||||
BlackRock Fund Advisors(3) | 25,050,939 | 6.02 |
Notes: (1) | Based on 412,352,494 shares of our common stock issued as of March 31, 2022. |
(2) | Depositary under the Company’s ADR program. The voting rights are held by ADR holders. |
(3) | The above number of shares and the percentage of total issued shares held by BlackRock Fund Advisors are as of February 26, 2021 and are based on disclosure made by BlackRock Fund Advisors in a statement of acquisition filing on March 10, 2021. |
Table of Contents
7.2. | Changes in the Largest Shareholder |
(Unit: shares, %) | ||||||||||
Name of Largest Shareholder | Date of Change in Largest Shareholder/Date of Change in Number of Shares Owned | Number of Shares of Common Stock(1) | Percentage of Total Issued Shares(2) | |||||||
Korean National Pension Service | December 31, 2018 | 39,704,733 | 9.50 | |||||||
Korean National Pension Service | December 31, 2019 | 41,468,003 | 9.97 | |||||||
Korean National Pension Service | February 1, 2020 | 41,462,588 | (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 | ||||||
Korean National Pension Service | March 31, 2022 | 36,008,504 | 8.73 |
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
From December 12, 2019 to February 14, 2022: 415,807,920
After February 14, 2022: 412,352,494
(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 March 31, 2022) |
(As of March 31, 2022) | (Unit: shares) | |||
Company Name | Number of Shares of Common Stock Owned | |||
KB Financial Group Inc. | 52,188 | |||
Kookmin Bank | 6,147,197 | |||
KB Securities Co., Ltd. | 40,500 | |||
KB Insurance Co., Ltd. | 446,698 | |||
KB Kookmin Card Co., Ltd. | 343,803 | |||
Prudential Life Insurance | 1,330 | |||
KB Asset Management Co., Ltd. | 12,384 | |||
KB Capital Co., Ltd. | 35,969 | |||
KB Life Insurance Co., Ltd. | 22,430 | |||
KB Real Estate Trust Co., Ltd. | 21,811 | |||
KB Savings Bank Co., Ltd. | 8,192 | |||
KB Investment Co., Ltd. | 1,024 | |||
KB Data Systems Co., Ltd. | 21,014 | |||
KB Credit Information Co., Ltd. | 12,589 | |||
Others(1) | 8,981 | |||
|
| |||
Total | 7,176,110 | |||
|
|
Note: | (1) | Shares of common stock attributable to an account owned by the employee stock ownership association of KB Financial Group. |
Table of Contents
7.4. | Investments in Affiliated Companies |
[No longer required to be disclosed in quarterly reports pursuant to revised Korean regulations]
7.5. | Related Party Transactions |
7.5.1. Purchase of capital securities issued by KB Securities Co., Ltd.
(Unit: in billions of Won) | ||||||||||||||
Issuer | Relationship | Type | Issue | Issue Date | Interest | Maturity Date | Use of | |||||||
KB Securities Co., Ltd. | Subsidiary | No. 1 Private Placement of Capital Securities in Won | 200 | March 31, 2022 | 4.300% | March 31, 2052 (may be extended) | Working capital |
7.5.2. Purchase of capital securities issued by KB Capital Co., Ltd.
(Unit: in billions of Won) | ||||||||||||||
Issuer | Relationship | Type | Issue | 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. |
Table of Contents
(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 | |||||||
(Unit: in billions of Won) | ||||||||||||||
Issuer | Relationship | Type | Issue | Issue Date | Interest | Maturity Date | Use of | |||||||
KB Capital Co., Ltd. | Subsidiary | No. 486 Private Placement of Capital Securities in Won | 100 | February 17, 2022 | 4.495% | February 17, 2052 (may be extended) | Working capital |
Table of Contents
7.5.3. 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 |
7.5.4. 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, 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) | 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 | 2.334%(2) | March 8, 2023 | |||||||
Notes: (1) Unsecured credit loans. (2) Changed from 2.245% to 2.334% upon extension of the loans on March 9, 2022. | ||||||||||||||
(Unit: in billions of Won) | ||||||||||||||
Name | Relationship | Account | Loan Amount | Current | Credit Offering | Interest | Maturity Date | |||||||
KB Investment Co., Ltd. | Subsidiary | Loans(1) | 30 | 30 | March 9, 2020 | 2.334%(2) | March 8, 2023 |
Notes: (1) Unsecured credit loans.
(2) Changed from 2.245% to 2.334% upon extension of the loans on March 9, 2022.
Table of Contents
(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.
Table of Contents
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized.
KB Financial Group Inc. | ||||||||
(Registrant) | ||||||||
Date: May 16, 2022 | By: /s/ Scott Y. H. Seo | |||||||
(Signature) | ||||||||
Name: | Scott Y. H. Seo | |||||||
Title: | Senior Managing Director and Chief Finance Officer |