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 2024
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 ☐
Summary of 2024 First Quarter Business Report
On May 16, 2024, KB Financial Group Inc. (“KB Financial Group,” the “Company” or the “Group”) filed its business report for the first quarter of 2024 (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,” the “Company” or the “Group” 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 |
[Not required to be disclosed in quarterly reports]
1.3. Overview of the Business Group
[Not required to be disclosed in quarterly reports]
| 1.4. | Capital Structure |
| 1.4.1. | Common Shares |
Changes in Capital
| (As of March 31, 2024) | (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) | |||||||||||
August 1, 2022 | Common Stock | 3,455,426 | 5,000 | — | Share Cancellation(1) | |||||||||||
April 4, 2023 | Common Stock | 5,385,996 | 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
[Not required to be disclosed in quarterly reports]
1.4.2. Voting Rights
| (As of March 31, 2024) | (Unit: shares) | |||||||||
Items | Number of Shares | Notes | ||||||||
Total number of issued shares | Common shares | 403,511,072 | — | |||||||
| Preferred shares | — | — | ||||||||
Shares without voting rights | Common shares | 20,747,247 | 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 | 382,763,825 | — | |||||||||
| Preferred shares | — | — |
| Notes: (1) | On July 25, 2023, the board of directors of the Company resolved to acquire and cancel certain of the Company’s treasury shares. Pursuant to such resolution, the Company entered into a trust agreement with Samsung Securities Co., Ltd. for the acquisition of Won 300 billion worth of treasury shares between August 1, 2023 and July 31, 2024 and has completed such acquisition on December 5, 2023, having acquired a total of 5,584,514 treasury shares. The Company plans to cancel such treasury shares after the trust agreement expires on July 31, 2024. |
| (2) | On February 7, 2024, the board of directors of the Company resolved to acquire and cancel certain of the Company’s treasury shares. Pursuant to such resolution, the Company entered into a trust agreement with Samsung Securities Co., Ltd. for the acquisition of Won 320 billion worth of treasury shares between February 8, 2024 and August 7, 2024, and is currently in the process of acquiring such shares, all of which the Company plans to cancel. For more information, please refer to the Company’s report on Form 6-K furnished to the Securities and Exchange Commission on February 7, 2024. |
| 1.5. | Dividends |
Since 2022, KB Financial Group has been pursuing a CET1 ratio-based shareholder return policy, whereby the Group’s principle is to utilize a portion of its excess capital exceeding its CET1 ratio of 13% to actively return value to its shareholders.
In order to enhance corporate value and shareholders’ value, the Group manages its shareholder return policy by using the ‘Total Shareholder Return Ratio’ as an indicator for its shareholder return, which includes distribution of cash dividends as well as share buybacks and cancellations. The Group plans to continually try to gradually expand its Total Shareholder Return Ratio.
In 2024, KB Financial Group implemented an ‘Equal Quarterly Dividend Distribution Policy,’ which aims to enhance the predictability of the Group’s dividend payments by paying an equal amount of total dividends each quarter while also maintaining at least the previous year’s level of, and gradually increasing the amount of, its dividends per share. In addition, the Group aims to enhance its shareholders’ value by striving to expand its shareholder return while also remaining flexible about buying back and cancelling its treasury shares in light of changes to its profit levels, the volatility of the financial market and changes in the regulatory landscape. Such cash dividend and share buyback and cancellation plans may be modified depending on economic conditions, the regulatory environment, or the Group’s business objectives.
KB Financial Group aims to manage its CET1 target ratio to be at least 13% (consisting of the regulatory requirement of 10.5% plus a management buffer of 2.5%), which also takes into consideration a capacity for absorbing losses in the event of an economic shock equivalent to that of the level of the Asian financial crisis in 1997.
In order to manage such CET1 target ratio, the Group plans to benchmark systemic growth indicators, such as nominal GDP growth rates, to set its mid-term goals for asset growth. However, the Group may modify such goals to better fulfill the Group’s public role and to attain sustainable growth in light of changes to the macroeconomic and regulatory environment, the importance and role of financial institutions, including banks, in the domestic economy, the Group’s public duty to maintain the stability of the social system, or the Group’s business objectives such as investments in new businesses or M&A initiatives.
Furthermore, the Group plans to manage its CET1 ratio at an optimal balance point by increasing its shareholder returns and complying with changes in financial regulations, including the introduction of the counter-cyclical capital buffer and the stress capital buffer, while also maintaining the soundness of the Group’s asset quality.
| (Unit: in millions of Won, except per share amounts and percentages) | ||||||||||||||||
Items | January 1, 2024 to March 31, 2024 | January 1, 2023 to December 31, 2023(1) | January 1, 2022 to December 31, 2022(2) | |||||||||||||
Par value per share (Won) |
| 5,000 | 5,000 | 5,000 | ||||||||||||
(Consolidated) Net income |
| 1,049,133 | 4,631,932 | 4,394,830 | ||||||||||||
(Consolidated) Earnings per share (Won) |
| 2,627 | 11,580 | 10,955 | ||||||||||||
Total cash dividends |
| 300,000 | 1,173,937 | 1,149,421 | ||||||||||||
Total stock dividends |
| — | — | — | ||||||||||||
(Consolidated) Cash dividend payout ratio (%) |
| 28.6 | 25.3 | 26.0 | ||||||||||||
Cash dividend yield (%) | Common shares | 1.1 | 4.9 | 5.8 | ||||||||||||
| — | — | — | — | |||||||||||||
Stock dividend yield (%) | Common shares | — | — | — | ||||||||||||
| — | — | — | — | |||||||||||||
Cash dividend per share (Won) | Common shares | 784 | 3,060 | 2,950 | ||||||||||||
| — | — | — | — | |||||||||||||
Stock dividend per share | Common shares | — | — | — | ||||||||||||
| — | — | — | — | |||||||||||||
Notes: | (1) | Includes a quarterly dividend amount of Won 195,967 million (Won 510 per common share) in the first quarter of fiscal year 2023, a quarterly dividend amount of Won 195,967 million (Won 510 per common share) in the second quarter of fiscal year 2023, and a quarterly dividend amount of Won 194,998 million (Won 510 per common share) in the third quarter of fiscal year 2023 paid in 2023, and an annual dividend amount of Won 587,006 million (Won 1,530 per common share). |
| (2) | Includes a quarterly dividend amount of Won 194,817 million (Won 500 per common share) in the first quarter of fiscal year 2022, a quarterly dividend amount of Won 194,817 million (Won 500 per common share) in the second quarter of fiscal year 2022, and a quarterly dividend amount of Won 194,817 million (Won 500 per common share) in the third quarter of fiscal year 2022. |
| 1.6. | Amendments to the Articles of Incorporation |
[Not required to be disclosed in quarterly reports]
| 2. | Business |
| 2.1. | Results of Operations |
| (Unit: in millions of Won) | ||||||||||||||||
| For the three months ended March 31, 2024 | For the three months ended March 31, 2023 | For the year ended December 31, 2023 | For the year ended December 31, 2022 | |||||||||||||
Net interest income | 3,151,485 | 2,823,865 | 12,141,717 | 11,515,325 | ||||||||||||
Interest income | 7,613,962 | 6,866,583 | 29,145,079 | 20,787,577 | ||||||||||||
Interest expense | (4,462,477 | ) | (4,042,718 | ) | (17,003,362 | ) | (9,272,252 | ) | ||||||||
Net fee and commission income | 990,093 | 914,006 | 3,673,524 | 3,514,902 | ||||||||||||
Fee and commission income | 1,396,300 | 1,334,702 | 5,368,074 | 5,125,930 | ||||||||||||
Fee and commission expense | (406,207 | ) | (420,696 | ) | (1,694,550 | ) | (1,611,028 | ) | ||||||||
Net insurance income | 538,379 | 392,407 | 1,422,952 | 1,311,091 | ||||||||||||
Insurance income | 2,727,558 | 2,663,134 | 10,978,808 | 10,072,490 | ||||||||||||
Insurance expense | (2,189,179 | ) | (2,270,727 | ) | (9,555,856 | ) | (8,761,399 | ) | ||||||||
Net gains (losses) on financial assets/liabilities at fair value through profit or loss | 249,133 | 773,407 | 2,163,065 | (1,139,818 | ) | |||||||||||
Other insurance finance income (expense) | (112,426 | ) | (269,060 | ) | (459,135 | ) | 841,227 | |||||||||
Net other operating expenses | (404,710 | ) | (260,124 | ) | (2,712,989 | ) | (2,262,123 | ) | ||||||||
General and administrative expenses | (1,628,236 | ) | (1,566,286 | ) | (6,647,406 | ) | (6,643,654 | ) | ||||||||
Operating profit before provision for credit losses | 2,783,718 | 2,808,215 | 9,581,728 | 7,136,950 | ||||||||||||
Provision for credit losses | (428,270 | ) | (668,188 | ) | (3,146,409 | ) | (1,847,775 | ) | ||||||||
Net operating profit | 2,355,448 | 2,140,027 | 6,435,319 | 5,289,175 | ||||||||||||
Notes: | (1) | Based on K-IFRS (on a consolidated basis). |
| (2) | KB Financial Group’s results of operations for the three months ended March 31, 2024 and the year ended December 31, 2023 reflect the application of K-IFRS 1117 (Insurance Contracts), a new accounting standard that became effective on January 1, 2023. For comparison purposes, the figures for the year ended December 31, 2022 above have been restated retrospectively to reflect the application of K-IFRS 1117. |
| (3) | KB Financial Group’s results of operations for the three months ended March 31, 2023 above have been restated retrospectively to reflect the application of the variable fee approach for measuring insurance liabilities in accordance with the Financial Supervisory Service’s guidelines on actuarial assumptions. |
| 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, 2024 | For the year ended December 31, 2023 | For the year ended December 31, 2022 | ||||||||||||||||||||||||||||||||||||
| Average Balance | Interest Rate (%) | Ratio (%) | Average Balance | Interest Rate (%) | Ratio (%) | Average Balance | Interest Rate (%) | Ratio (%) | ||||||||||||||||||||||||||||||
Won Currency | Deposits | 353,362,143 | 2.53 | 46.40 | 338,691,272 | 2.52 | 45.63 | 333,078,280 | 1.27 | 47.87 | ||||||||||||||||||||||||||||
Certificate of deposit | 11,317,560 | 4.05 | 1.49 | 10,417,992 | 4.07 | 1.40 | 5,511,822 | 2.35 | 0.79 | |||||||||||||||||||||||||||||
Borrowings | 33,205,228 | 3.54 | 4.36 | 33,891,286 | 3.27 | 4.57 | 31,064,028 | 1.91 | 4.46 | |||||||||||||||||||||||||||||
Call money | 1,277,497 | 3.52 | 0.17 | 1,384,033 | 3.52 | 0.19 | 1,314,525 | 2.02 | 0.19 | |||||||||||||||||||||||||||||
Debentures | 45,217,883 | 4.44 | 5.94 | 56,008,914 | 3.36 | 7.55 | 58,290,290 | 2.39 | 8.38 | |||||||||||||||||||||||||||||
Others | 23,364,082 | 4.20 | 3.06 | 22,355,370 | 4.37 | 3.01 | 20,866,612 | 2.34 | 3.00 | |||||||||||||||||||||||||||||
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Subtotal | 467,744,393 | 2.91 | 61.42 | 462,748,867 | 2.81 | 62.35 | 450,125,557 | 1.52 | 64.69 | |||||||||||||||||||||||||||||
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Foreign Currency | Deposits | 36,735,274 | 4.22 | 4.82 | 36,526,597 | 3.88 | 4.92 | 34,076,754 | 2.09 | 4.90 | ||||||||||||||||||||||||||||
Borrowings | 21,612,976 | 4.21 | 2.84 | 24,087,170 | 3.77 | 3.25 | 22,970,783 | 1.90 | 3.30 | |||||||||||||||||||||||||||||
Call money | 2,242,651 | 3.62 | 0.29 | 2,014,719 | 3.19 | 0.27 | 1,572,913 | 1.87 | 0.23 | |||||||||||||||||||||||||||||
Debentures | 24,944,501 | 1.87 | 3.28 | 13,607,050 | 3.14 | 1.83 | 11,978,139 | 2.09 | 1.72 | |||||||||||||||||||||||||||||
Others | 1,095,224 | 4.59 | 0.15 | 1,067,253 | 3.51 | 0.14 | 1,685,165 | 1.46 | 0.24 | |||||||||||||||||||||||||||||
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Subtotal | 86,630,626 | 3.53 | 11.38 | 77,302,789 | 3.69 | 10.41 | 72,283,754 | 2.01 | 10.39 | |||||||||||||||||||||||||||||
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Others | Total shareholders’ equity | 99,516,573 | — | 13.07 | 95,694,663 | — | 12.89 | 67,612,953 | — | 9.72 | ||||||||||||||||||||||||||||
Allowances | 1,448,531 | — | 0.19 | 1,061,174 | — | 0.14 | 1,128,687 | — | 0.16 | |||||||||||||||||||||||||||||
Others | 106,213,010 | — | 13.94 | 105,428,693 | — | 14.21 | 104,628,576 | — | 15.04 | |||||||||||||||||||||||||||||
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Subtotal | 207,178,114 | — | 27.20 | 202,184,530 | — | 27.24 | 173,370,216 | — | 24.92 | |||||||||||||||||||||||||||||
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Total | 761,553,133 | — | 100.00 | 742,236,186 | — | 100.00 | 695,779,527 | — | 100.00 | |||||||||||||||||||||||||||||
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Notes: | (1) | Based on K-IFRS (on a consolidated basis). |
| (2) | The figures for the three months ended March 31, 2024 and the year ended December 31, 2023 reflect the application of K-IFRS 1117 (Insurance Contracts), a new accounting standard that became effective on January 1, 2023. The figures for the year ended December 31, 2022 above have been restated retrospectively to reflect the application of K-IFRS 1117. |
2.2.2. Uses of Funds
| (Unit: in millions of Won) | ||||||||||||||||||||||||||||||||||||||
| For the three months ended March 31, 2024 | For the year ended December 31, 2023 | For the year ended December 31, 2022 | ||||||||||||||||||||||||||||||||||||
| Average Balance | Interest Rate (%) | Ratio (%) | Average Balance | Interest Rate (%) | Ratio (%) | Average Balance | Interest Rate (%) | Ratio (%) | ||||||||||||||||||||||||||||||
Won Currency | Due from banks | 15,999,945 | 0.79 | 2.10 | 16,471,530 | 0.92 | 2.22 | 16,038,688 | 0.63 | 2.31 | ||||||||||||||||||||||||||||
| Securities | 208,973,283 | 2.25 | 27.44 | 199,538,723 | 2.72 | 26.88 | 166,950,909 | 1.17 | 23.99 | |||||||||||||||||||||||||||||
| Loans | 381,204,035 | 4.84 | 50.06 | 370,190,671 | 4.81 | 49.88 | 361,188,713 | 3.51 | 51.91 | |||||||||||||||||||||||||||||
Guarantee payments under payment guarantee | 7,511 | 1.51 | — | 5,114 | 0.81 | — | 6,891 | 0.19 | — | |||||||||||||||||||||||||||||
Call loan | 390,699 | 3.56 | 0.05 | 286,735 | 3.62 | 0.04 | 694,196 | 2.02 | 0.10 | |||||||||||||||||||||||||||||
Private placement corporate bonds | 1,116,725 | 3.41 | 0.15 | 1,206,821 | 2.90 | 0.16 | 828,547 | 3.43 | 0.12 | |||||||||||||||||||||||||||||
| Credit cards | 23,048,134 | 8.21 | 3.03 | 22,789,066 | 7.93 | 3.07 | 22,069,290 | 6.94 | 3.17 | |||||||||||||||||||||||||||||
| Others | 3,762,817 | 17.94 | 0.49 | 3,415,038 | 17.44 | 0.46 | 4,438,987 | 9.45 | 0.64 | |||||||||||||||||||||||||||||
| Allowance | (4,153,738 | ) | — | (0.55 | ) | (3,561,894 | ) | — | (0.48 | ) | (2,814,578 | ) | — | (0.40 | ) | |||||||||||||||||||||||
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Subtotal | 630,349,411 | 4.11 | 82.77 | 610,341,804 | 4.23 | 82.23 | 569,401,643 | 2.94 | 81.84 | |||||||||||||||||||||||||||||
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Foreign Currency | Due from banks | 9,715,545 | 2.70 | 1.28 | 9,292,372 | 2.28 | 1.25 | 9,239,891 | 0.76 | 1.33 | ||||||||||||||||||||||||||||
| Securities | 25,088,696 | 4.28 | 3.29 | 25,883,766 | 4.16 | 3.49 | 20,610,143 | 1.81 | 2.96 | |||||||||||||||||||||||||||||
Loans | 38,641,424 | 7.14 | 5.07 | 39,403,960 | 6.97 | 5.31 | 37,267,941 | 5.32 | 5.36 | |||||||||||||||||||||||||||||
Call loan | 7,360,291 | 5.08 | 0.97 | 7,399,847 | 4.49 | 1.00 | 8,829,592 | 2.12 | 1.27 | |||||||||||||||||||||||||||||
Bills bought | 1,479,334 | 5.79 | 0.19 | 2,047,390 | 5.58 | 0.28 | 2,541,838 | 2.32 | 0.37 | |||||||||||||||||||||||||||||
Allowance | (1,534,963 | ) | — | (0.20 | ) | (1,322,830 | ) | — | (0.18 | ) | (1,021,192 | ) | — | (0.15 | ) | |||||||||||||||||||||||
Others | 3,036,235 | — | 0.40 | 3,070,684 | — | 0.41 | 2,248,320 | — | 0.32 | |||||||||||||||||||||||||||||
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Subtotal | 83,786,562 | 5.53 | 11.00 | 85,775,189 | 5.30 | 11.56 | 79,716,533 | 3.38 | 11.46 | |||||||||||||||||||||||||||||
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Others | Cash | 1,650,386 | — | 0.22 | 1,681,170 | — | 0.23 | 1,831,093 | — | 0.26 | ||||||||||||||||||||||||||||
Fixed assets held for business | 9,567,942 | — | 1.26 | 8,813,616 | — | 1.19 | 8,077,249 | — | 1.16 | |||||||||||||||||||||||||||||
Others | 36,198,832 | — | 4.75 | 35,624,407 | — | 4.79 | 36,753,009 | — | 5.28 | |||||||||||||||||||||||||||||
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Subtotal | 47,417,160 | — | 6.23 | 46,119,193 | — | 6.21 | 46,661,351 | — | 6.70 | |||||||||||||||||||||||||||||
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Total | 761,553,133 | — | 100.00 | 742,236,186 | — | 100.00 | 695,779,527 | — | 100.00 | |||||||||||||||||||||||||||||
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Notes: | (1) | Based on K-IFRS (on a consolidated basis). |
| (2) | The figures for the three months ended March 31, 2024 and the year ended December 31, 2023 reflect the application of K-IFRS 1117 (Insurance Contracts), a new accounting standard that became effective on January 1, 2023. The figures for the year ended December 31, 2022 above have been restated retrospectively to reflect the application of K-IFRS 1117. |
2.3. Other Information to Consider in Making an Investment Decision
2.3.1. Capital Adequacy
| KB Financial Group | (Unit: in billions of Won, except percentages) | |||||||||||
| As of March 31, 2024 | As of December 31, 2023 | As of December 31, 2022 | ||||||||||
Total capital (A) | 55,189 | 53,744 | 48,970 | |||||||||
Risk-weighted assets (B) | 333,754 | 321,319 | 302,984 | |||||||||
BIS ratio (A/B) | 16.54% | 16.73% | 16.16% | |||||||||
| Notes: | (1) Calculated in accordance with Basel III. |
(2) The figures as of March 31, 2024 are preliminary. |
| Kookmin Bank | (Unit: in billions of Won, except percentages) | |||||||||||
| As of March 31, 2024 | As of December 31, 2023 | As of December 31, 2022 | ||||||||||
Total capital (A) | 39,394 | 39,040 | 36,233 | |||||||||
Risk-weighted assets (B) | 227,577 | 215,962 | 207,558 | |||||||||
BIS ratio (A/B) | 17.31% | 18.08% | 17.46% | |||||||||
| Notes: | (1) Calculated in accordance with Basel III. |
(2) The figures as of March 31, 2024 are preliminary. |
| KB Securities Co., Ltd. | (Unit: in billions of Won, except percentages) | |||||||||||
As of March 31, 2024 | As of December 31, 2023 | As of December 31, 2022 | ||||||||||
Net operating capital (A) | 5,189 | 5,058 | 4,554 | |||||||||
Total amount at risk (B) | 2,870 | 2,934 | 2,655 | |||||||||
Maintenance equity margin (C) | 134 | 134 | 134 | |||||||||
Net capital ratio (A-B)/(C) | 1,727.37% | 1,582.09% | 1,414.74% | |||||||||
Capital surplus (A-B) | 2,319 | 2,124 | 1,899 | |||||||||
| KB Insurance Co., Ltd. | (Unit: in billions of Won, except percentages) | |||||||||||
| As of March 31, 2024 | As of December 31, 2023 | As of December 31, 2022 | ||||||||||
Available capital (A) | 11,646 | 11,669 | 4,608 | |||||||||
Required capital (B) | 5,703 | 5,404 | 2,684 | |||||||||
Solvency ratio (A/B)(2) | 204.20% | 215.94% | 171.66% | |||||||||
| Notes: | (1) The figures as of March 31, 2024 are preliminary. |
(2) Pursuant to the change in capital adequacy system from the Risk-Based Capital (“RBC”) system to the Korean Insurance Capital Standard (“K-ICS”) system in 2023, the figures as of March 31, 2024 and December 31, 2023 were calculated based on the K-ICS method, whereas the figures as of December 31, 2022 were calculated based on the RBC method. |
2.3.2. Overseas Credit Ratings
[Not required to be disclosed in quarterly reports]
2.3.3. Domestic Credit Ratings
[Not required to be disclosed in quarterly reports]
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 28, 2019 | 615 | ||
| January 20, 2020 | 462 | |||
| January 30, 2021 | 800 | |||
| January 21, 2022 | 674 | |||
| January 18, 2023 | 713 | |||
| January 19, 2024 | 674 |
| 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, 2024 | As of December 31, 2023 | |||||||
Cash and due from financial institutions | 30,509,269 | 29,836,311 | ||||||
Financial assets at fair value through profit or loss | 77,356,807 | 77,038,267 | ||||||
Derivative financial assets | 7,260,440 | 6,157,628 | ||||||
Loans measured at amortized cost | 448,194,423 | 444,805,287 | ||||||
Financial investments | 124,966,655 | 122,199,529 | ||||||
Investments in associates and joint ventures | 700,626 | 722,222 | ||||||
Insurance assets | 268,419 | 229,640 | ||||||
Reinsurance assets | 1,552,936 | 1,655,168 | ||||||
Property and equipment | 5,310,307 | 4,945,699 | ||||||
Investment property | 3,962,852 | 4,109,784 | ||||||
Intangible assets | 1,961,022 | 1,950,858 | ||||||
Net defined benefit assets | 382,385 | 374,090 | ||||||
Current income tax assets | 274,900 | 244,317 | ||||||
Deferred income tax assets | 335,124 | 274,225 | ||||||
Assets held for sale | 119,494 | 208,230 | ||||||
Other assets | 29,084,622 | 20,986,897 | ||||||
|
|
|
| |||||
Total assets | 732,240,281 | 715,738,152 | ||||||
|
|
|
| |||||
Financial liabilities at fair value through profit or loss | 11,267,107 | 10,920,435 | ||||||
Derivative financial liabilities | 7,236,591 | 6,210,639 | ||||||
Deposits | 418,070,668 | 406,512,434 | ||||||
Borrowings | 62,993,551 | 69,583,561 | ||||||
Debentures | 70,002,922 | 69,176,668 | ||||||
Insurance contract liabilities | 50,704,289 | 50,308,552 | ||||||
Reinsurance contract liabilities | 37,353 | 36,030 | ||||||
Provisions | 2,062,011 | 1,444,418 | ||||||
Net defined benefit liabilities | 72,939 | 81,869 | ||||||
Current income tax liabilities | 146,395 | 145,335 | ||||||
Deferred income tax liabilities | 2,004,644 | 2,179,966 | ||||||
Other liabilities | 48,434,480 | 40,264,935 | ||||||
|
|
|
| |||||
Total liabilities | 673,032,950 | 656,864,842 | ||||||
|
|
|
| |||||
Equity attributable to shareholders of the parent company | 57,136,088 | 56,929,804 | ||||||
| As of March 31, 2024 | As of December 31, 2023 | |||||||
Share capital | 2,090,558 | 2,090,558 | ||||||
Hybrid securities | 5,431,863 | 5,032,803 | ||||||
Capital surplus | 16,639,873 | 16,647,916 | ||||||
Accumulated other comprehensive income | 1,531,423 | 2,295,165 | ||||||
Retained earnings | 32,439,145 | 32,029,199 | ||||||
Treasury shares | (996,774 | ) | (1,165,837 | ) | ||||
Non-controlling interests | 2,071,243 | 1,943,506 | ||||||
|
|
|
| |||||
Total equity | 59,207,331 | 58,873,310 | ||||||
|
|
|
| |||||
Total liabilities and equity | 732,240,281 | 715,738,152 | ||||||
|
|
|
| |||||
Number of companies included as a consolidated entity | 351 | 371 | ||||||
|
|
|
| |||||
3.1.2. Consolidated Statements of Comprehensive Income
| (Unit: in millions of Won, except per share amounts) | ||||||||||||||||
| First Quarter of 2024 | First Quarter of 2023 | |||||||||||||||
| Specified Quarter | Cumulative | Specified Quarter | Cumulative | |||||||||||||
Net interest income | 3,151,485 | 3,151,485 | 2,823,865 | 2,823,865 | ||||||||||||
Interest income | 7,613,962 | 7,613,962 | 6,866,583 | 6,866,583 | ||||||||||||
Interest income from financial instruments at fair value through other comprehensive income and amortized cost | 7,228,877 | 7,228,877 | 6,527,556 | 6,527,556 | ||||||||||||
Interest income from financial instruments at fair value through profit or loss | 376,753 | 376,753 | 333,477 | 333,477 | ||||||||||||
Insurance finance interest income | 8,332 | 8,332 | 5,550 | 5,550 | ||||||||||||
Interest expense | (4,462,477 | ) | (4,462,477 | ) | (4,042,718 | ) | (4,042,718 | ) | ||||||||
Interest expense | (4,066,526 | ) | (4,066,526 | ) | (3,639,880 | ) | (3,639,880 | ) | ||||||||
Insurance finance interest expense | (395,951 | ) | (395,951 | ) | (402,838 | ) | (402,838 | ) | ||||||||
Net fee and commission income | 990,093 | 990,093 | 914,006 | 914,006 | ||||||||||||
Fee and commission income | 1,396,300 | 1,396,300 | 1,334,702 | 1,334,702 | ||||||||||||
Fee and commission expense | (406,207 | ) | (406,207 | ) | (420,696 | ) | (420,696 | ) | ||||||||
Net insurance income | 538,379 | 538,379 | 392,407 | 392,407 | ||||||||||||
Insurance income | 2,727,558 | 2,727,558 | 2,663,134 | 2,663,134 | ||||||||||||
Insurance income | 2,689,474 | 2,689,474 | 2,498,548 | 2,498,548 | ||||||||||||
Reinsurance income | 38,084 | 38,084 | 164,586 | 164,586 | ||||||||||||
Insurance expense | (2,189,179 | ) | (2,189,179 | ) | (2,270,727 | ) | (2,270,727 | ) | ||||||||
Insurance service expense | (1,973,227 | ) | (1,973,227 | ) | (2,073,226 | ) | (2,073,226 | ) | ||||||||
Reinsurance expense | (215,952 | ) | (215,952 | ) | (197,501 | ) | (197,501 | ) | ||||||||
Net gains on financial assets/liabilities at fair value through profit or loss | 249,133 | 249,133 | 773,407 | 773,407 | ||||||||||||
Other insurance finance expenses | (112,426 | ) | (112,426 | ) | (269,060 | ) | (269,060 | ) | ||||||||
Net other operating expenses | (404,710 | ) | (404,710 | ) | (260,124 | ) | (260,124 | ) | ||||||||
General and administrative expenses | (1,628,236 | ) | (1,628,236 | ) | (1,566,286 | ) | (1,566,286 | ) | ||||||||
Operating income before provision for credit losses | 2,783,718 | 2,783,718 | 2,808,215 | 2,808,215 | ||||||||||||
Provision for credit losses | (428,270 | ) | (428,270 | ) | (668,188 | ) | (668,188 | ) | ||||||||
Net operating income | 2,355,448 | 2,355,448 | 2,140,027 | 2,140,027 | ||||||||||||
Net non-operating expenses | (947,964 | ) | (947,964 | ) | (96,161 | ) | (96,161 | ) | ||||||||
Share of loss of associates and joint ventures | (1,419 | ) | (1,419 | ) | (2,496 | ) | (2,496 | ) | ||||||||
Net other non-operating expenses | (946,545 | ) | (946,545 | ) | (93,665 | ) | (93,665 | ) | ||||||||
Profit before income tax expense | 1,407,484 | 1,407,484 | 2,043,866 | 2,043,866 | ||||||||||||
Income tax expense | (344,270 | ) | (344,270 | ) | (533,575 | ) | (533,575 | ) | ||||||||
Profit for the period | 1,063,214 | 1,063,214 | 1,510,291 | 1,510,291 | ||||||||||||
Other comprehensive income (loss) for the period, net of tax | (759,802 | ) | (759,802 | ) | 484,795 | 484,795 | ||||||||||
| First Quarter of 2024 | First Quarter of 2023 | |||||||||||||||
| Specified Quarter | Cumulative | Specified Quarter | Cumulative | |||||||||||||
Items that will not be reclassified to profit or loss: | ||||||||||||||||
Remeasurements of net defined benefit liabilities | 8,995 | 8,995 | 5,828 | 5,828 | ||||||||||||
Share of other comprehensive loss of associates and joint ventures | — | — | (2 | ) | (2 | ) | ||||||||||
Losses on equity securities at fair value through other comprehensive income | (12,566 | ) | (12,566 | ) | (110 | ) | (110 | ) | ||||||||
Fair value changes of financial liabilities designated at fair value through profit or loss due to own credit risk | (8,843 | ) | (8,843 | ) | (49,975 | ) | (49,975 | ) | ||||||||
Items that may be reclassified subsequently to profit or loss: | ||||||||||||||||
Currency translation differences | 162,945 | 162,945 | 115,819 | 115,819 | ||||||||||||
Gains (losses) on debt securities at fair value through other comprehensive income | (657,227 | ) | (657,227 | ) | 1,525,457 | 1,525,457 | ||||||||||
Share of other comprehensive loss of associates and joint ventures | (142 | ) | (142 | ) | (4,158 | ) | (4,158 | ) | ||||||||
Losses on cash flow hedging instruments | (36,797 | ) | (36,797 | ) | (35,465 | ) | (35,465 | ) | ||||||||
Losses on hedging instruments of net investments in foreign operations | (51,203 | ) | (51,203 | ) | (30,133 | ) | (30,133 | ) | ||||||||
Insurance finance expenses | (164,964 | ) | (164,964 | ) | (1,042,466 | ) | (1,042,466 | ) | ||||||||
Total comprehensive income for the period | 303,412 | 303,412 | 1,995,086 | 1,995,086 | ||||||||||||
Profit attributable to: | ||||||||||||||||
Shareholders of the parent company | 1,049,133 | 1,049,133 | 1,508,708 | 1,508,708 | ||||||||||||
Non-controlling interests | 14,081 | 14,081 | 1,583 | 1,583 | ||||||||||||
Total comprehensive income for the period attributable to: | ||||||||||||||||
Shareholders of the parent company | 281,279 | 281,279 | 1,982,382 | 1,982,382 | ||||||||||||
Non-controlling interests | 22,133 | 22,133 | 12,704 | 12,704 | ||||||||||||
Earnings per share | ||||||||||||||||
Basic earnings per share (Won) | 2,627 | 2,627 | 3,782 | 3,782 | ||||||||||||
Diluted earnings per share (Won) | 2,584 | 2,584 | 3,697 | 3,697 | ||||||||||||
| Note: (1) | The figures for the first quarter of 2023 have been restated retrospectively to reflect the application of the variable fee approach for measuring insurance liabilities in accordance with the Financial Supervisory Service’s guidelines on actuarial assumptions. |
| 3.2. | Separate Financial Information |
3.2.1. Separate Statements of Financial Position
| (Unit: in millions of Won) | ||||||||
| As of March 31, 2024 | As of December 31, 2023 | |||||||
Cash and due from financial institutions | 2,621,612 | 256,337 | ||||||
Financial assets at fair value through profit or loss | 1,062,613 | 1,376,423 | ||||||
Loans measured at amortized cost | 643,195 | 608,286 | ||||||
Investments in subsidiaries | 26,717,817 | 26,717,817 | ||||||
Property and equipment | 3,766 | 3,080 | ||||||
Intangible assets | 15,409 | 15,954 | ||||||
Net defined benefit assets | 3,347 | 3,694 | ||||||
Deferred income tax assets | 7,873 | 4,492 | ||||||
Other assets | 1,069,424 | 542,815 | ||||||
|
|
|
| |||||
Total assets | 32,145,056 | 29,528,898 | ||||||
|
|
|
| |||||
Borrowings | 465,000 | 100,000 | ||||||
Debentures | 3,267,247 | 3,871,820 | ||||||
Current income tax liabilities | 127,739 | 104,299 | ||||||
Other liabilities | 1,093,802 | 410,704 | ||||||
|
|
|
| |||||
Total liabilities | 4,953,788 | 4,486,823 | ||||||
|
|
|
| |||||
Share capital | 2,090,558 | 2,090,558 | ||||||
Hybrid securities | 5,431,563 | 5,032,518 | ||||||
Capital surplus | 14,748,242 | 14,754,747 | ||||||
Accumulated other comprehensive loss | (6,762 | ) | (6,809 | ) | ||||
Retained earnings | 5,924,441 | 4,336,898 | ||||||
Treasury Shares | (996,774 | ) | (1,165,837 | ) | ||||
|
|
|
| |||||
Total equity | 27,191,268 | 25,042,075 | ||||||
|
|
|
| |||||
Total liabilities and equity | 32,145,056 | 29,528,898 | ||||||
|
|
|
| |||||
3.2.2. Separate Statements of Comprehensive Income
(Unit: in millions of Won, except per share amounts) | ||||||||||||||||
| First Quarter of 2024 | First Quarter of 2023 | |||||||||||||||
| Specified Quarter | Cumulative | Specified Quarter | Cumulative | |||||||||||||
Net interest expense | (13,725 | ) | (13,725 | ) | (20,054 | ) | (20,054 | ) | ||||||||
Interest income | 9,817 | 9,817 | 6,670 | 6,670 | ||||||||||||
Interest income from financial instruments at amortized cost | 9,115 | 9,115 | 5,551 | 5,551 | ||||||||||||
Interest income from financial instruments at fair value through profit or loss | 702 | 702 | 1,119 | 1,119 | ||||||||||||
Interest expense | (23,542 | ) | (23,542 | ) | (26,724 | ) | (26,724 | ) | ||||||||
Net fee and commission expense | (1,142 | ) | (1,142 | ) | (1,247 | ) | (1,247 | ) | ||||||||
Fee and commission income | 378 | 378 | 372 | 372 | ||||||||||||
Fee and commission expense | (1,520 | ) | (1,520 | ) | (1,619 | ) | (1,619 | ) | ||||||||
Net gains on financial assets at fair value through profit or loss | 15,579 | 15,579 | 45,428 | 45,428 | ||||||||||||
Net other operating income | 2,243,250 | 2,243,250 | 2,192,380 | 2,192,380 | ||||||||||||
General and administrative expenses | (24,187 | ) | (24,187 | ) | (22,902 | ) | (22,902 | ) | ||||||||
Operating profit before provision for credit losses | 2,219,775 | 2,219,775 | 2,193,605 | 2,193,605 | ||||||||||||
Reversal of (provision for) credit losses | (96 | ) | (96 | ) | 0 | 0 | ||||||||||
Operating profit | 2,219,679 | 2,219,679 | 2,193,605 | 2,193,605 | ||||||||||||
Net non-operating income (expense) | (646 | ) | (646 | ) | 13 | 13 | ||||||||||
Profit before income tax | 2,219,033 | 2,219,033 | 2,193,618 | 2,193,618 | ||||||||||||
Income tax income (expense) | 3,586 | 3,586 | (10,691 | ) | (10,691 | ) | ||||||||||
Profit for the year | 2,222,619 | 2,222,619 | 2,182,927 | 2,182,927 | ||||||||||||
Other comprehensive income for the year, net of tax | 47 | 47 | 17 | 17 | ||||||||||||
Items that will not be reclassified to profit or loss: | ||||||||||||||||
Remeasurements of net defined benefit liabilities | 47 | 47 | 17 | 17 | ||||||||||||
|
|
|
|
|
|
|
| |||||||||
Total comprehensive income for the year | 2,222,666 | 2,222,666 | 2,182,944 | 2,182,944 | ||||||||||||
|
|
|
|
|
|
|
| |||||||||
Earnings per share | ||||||||||||||||
Basic earnings per share (Won) | 5,706 | 5,706 | 5,520 | 5,520 | ||||||||||||
Diluted earnings per share (Won) | 5,612 | 5,612 | 5,394 | 5,394 | ||||||||||||
| 3.3. | Other Selected Financial Data |
3.3.1. Won-denominated Liquidity Ratio
| (Unit: in millions of Won, except percentages) | ||||||||||||
| As of March 31, 2024 | As of December 31, 2023 | As of December 31, 2022 | ||||||||||
Current assets in Won (A) | 3,150,241 | 656,555 | 959,935 | |||||||||
Current liabilities in Won (B) | 1,041,158 | 255,693 | 592,727 | |||||||||
Liquidity ratio (A/B) | 302.57 | % | 256.77 | % | 161.95 | % | ||||||
| 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, 2024 | For the year ended | For the year ended | ||||||
Net income as a percentage of average total assets (ROA) | 0.59 | 0.65 | 0.57 | |||||
Net income as a percentage of average shareholders’ equity (ROE) | 7.40 | 8.37 | 8.17 | |||||
| Note: | Based on K-IFRS (on a consolidated basis). |
3.3.3. 20 Largest Exposures of Kookmin Bank by Borrower (As of March 31, 2024)
| (Unit: in billions of Won) | ||||
Company | Credit Extended | |||
LG Display Co., Ltd. | 1,959 | |||
Samsung Electronics Co., Ltd. | 1,540 | |||
KB Kookmin Card Co., Ltd. | 1,284 | |||
E-MART Inc. | 1,181 | |||
HD Hyundai Heavy Industries Co., Ltd. | 1,134 | |||
SK On Co., Ltd. | 1,105 | |||
Hanwha Solutions Corporation | 986 | |||
Strada Holdco L.P. | 945 | |||
LG Energy Solution, Ltd. | 911 | |||
SK Inc. | 898 | |||
Samsung Heavy Industries Co., Ltd. | 873 | |||
Samsung SDI Co., Ltd. | 839 | |||
Hyundai Samho Heavy Industries Co., Ltd. | 762 | |||
SK hynix Inc. | 741 | |||
Construction Guarantee Cooperative | 727 | |||
LG Chem, Ltd. | 727 | |||
Shinhan Card Co., Ltd. | 718 | |||
Posco International Corporation | 701 | |||
HDC Hyundai Development Company | 693 | |||
Hanwha Ocean Co., Ltd. | 650 | |||
|
| |||
Total | 19,374 | |||
|
| |||
3.3.4. 10 Largest Exposures of Kookmin Bank by Chaebol Group (As of March 31, 2024)
| (Unit: in billions of Won) | ||||
Group | Credit Extended | |||
SK | 6,364 | |||
Samsung | 5,168 | |||
LG | 4,764 | |||
Hyundai Motor | 4,340 | |||
Lotte | 3,717 | |||
HD Hyundai (former Hyundai Heavy Industries) | 3,519 | |||
Hanwha | 3,286 | |||
POSCO | 1,989 | |||
Shinsegae | 1,681 | |||
GS | 1,659 | |||
|
| |||
Total | 36,487 | |||
|
| |||
3.3.5. Kookmin Bank’s Loan Concentration by Industry (As of March 31, 2024)
| (Unit: in billions of Won, except percentages) | ||||||||
Industry | Total Credit | Percentage of Total Credit | ||||||
Manufacturing | 56,198 | 26.3 | ||||||
Construction | 5,525 | 2.6 | ||||||
Real estate activities | 53,825 | 25.2 | ||||||
Wholesale and retail trade | 30,209 | 14.1 | ||||||
Accommodation and food service activities | 10,937 | 5.1 | ||||||
Financial activities | 8,447 | 4.0 | ||||||
Others | 48,610 | 22.7 | ||||||
|
|
|
| |||||
Total | 213,750 | 100.0 | ||||||
|
|
|
| |||||
3.3.6. Top 20 Non-Performing Loans of Kookmin Bank (As of March 31, 2024)
| (Unit: in billions of Won) | ||||||||||
Borrower | Industry | Total Credit | Allowance for Loan Losses | |||||||
Borrower A | Real estate activities | 254.1 | 117.0 | |||||||
Borrower B | Construction | 40.1 | 39.3 | |||||||
Borrower C | Manufacturing | 26.5 | 22.1 | |||||||
Borrower D | Construction | 22.6 | 19.6 | |||||||
Borrower E | Real estate activities | 14.8 | 4.3 | |||||||
Borrower F | Real estate activities | 14.8 | 4.3 | |||||||
Borrower G | Wholesale and retail trade | 11.2 | 11.0 | |||||||
Borrower H | Real estate activities | 11.0 | 2.0 | |||||||
Borrower I | Manufacturing | 8.5 | 2.8 | |||||||
Borrower J | Real estate activities | 7.8 | 0.8 | |||||||
Borrower K | Accommodation and food service activities | 7.8 | 0.2 | |||||||
Borrower L | Manufacturing | 7.6 | 5.3 | |||||||
Borrower M | Manufacturing | 6.8 | 3.8 | |||||||
Borrower N | Real estate activities | 6.5 | 0.8 | |||||||
Borrower O | Transportation and warehousing business | 5.0 | 1.0 | |||||||
Borrower P | Manufacturing | 4.5 | 3.2 | |||||||
Borrower Q | Publishing, film, broadcasting and information services | 4.4 | 3.4 | |||||||
Borrower R | Manufacturing | 3.8 | 0.2 | |||||||
Borrower S | Accommodation and food service activities | 3.8 | 0.2 | |||||||
Borrower T | Manufacturing | 3.6 | 3.5 | |||||||
|
|
|
| |||||||
— | — | 465.3 | 244.9 | |||||||
|
|
|
| |||||||
| 3.4. | Other Financial Information |
See Exhibits 99.1 and 99.2 attached hereto for our consolidated and separate financial statements and relevant notes, which have been prepared in accordance with K-IFRS and reviewed by our independent auditors as stated in their review reports. The review reports will also be available on our website at www.kbfg.com.
| 4. | Independent Public Accountants |
| 4.1. | Audit / Review Services |
| (Unit: in millions of Won) | ||||||||||||||||
Period | Auditor | Activity | Agreed Per Contract(1) | Actual(2) | ||||||||||||
| Compensation(3) | Estimated Hours | Compensation(3) | Accrued Hours | |||||||||||||
January 1 to March 31, 2024 | Samil PricewaterhouseCoopers | Quarterly, semi-annual and annual review & audit, review of internal accounting management system (including audit of internal control over financial reporting) | 1,296 | 10,970 | 462 | 1,463 | ||||||||||
January 1 to December 31, 2023 | Samil PricewaterhouseCoopers | Quarterly, semi-annual and annual review & audit, review of internal accounting management system (including audit of internal control over financial reporting) | 1,264 | 11,675 | 1,264 | 11,309 | ||||||||||
January 1 to December 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 | 1,291 | 11,028 | ||||||||||
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. |
| 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, 2024 | Samil Pricewaterhouse Coopers | PCAOB audit of consolidated financial statements and internal control over financial reporting | May 1, 2024 to April 30, 2025 | 804 | ||||||
January 1 to December 31, 2023 | Samil Pricewaterhouse Coopers | PCAOB audit of consolidated financial statements and internal control over financial reporting | May 1, 2023 to April 30, 2024 | 784 | ||||||
January 1 to December 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 | ||||||
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 under the Financial Services Commission had designated KPMG Samjong Accounting Corp. as the external auditor for the Company for the fiscal years ended December 31, 2020, 2021 and 2022. Following the end of KPMG Samjong Accounting Corp.’s designated period as the auditor, the Company selected Samil PricewaterhouseCoopers to be its new external auditor for the fiscal years ending December 31, 2023, 2024 and 2025, in accordance with the criteria and processes set forth by relevant laws and regulations. As such, the external auditor for the Company and its subsidiaries for the fiscal year ended December 31, 2023 was Samil PricewaterhouseCoopers.
| 5. | Corporate Governance and Affiliated Companies |
| 5.1. | Board of Directors & Committees under the Board |
[Not required to be disclosed in quarterly reports]
| 5.2. | Audit Committee |
[Not required to be disclosed in quarterly reports]
| 5.3. | Compensation to Directors |
[Not required to be disclosed in quarterly reports]
| 5.4. | Top 5 Highest-Paid Individuals |
[Not required to be disclosed in quarterly reports]
| 5.5. | Affiliated Companies |
[Not required to be disclosed in quarterly reports]
| 6. | Directors, Senior Management and Employees |
| 6.1. | Executive Directors |
As of March 31, 2024 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, 2024 are set forth below.
Name | Date of Birth | Position | Common Shares Owned | End of Term | ||||
Jong Hee Yang | June 1961 | Chairman & Chief Executive Officer | 5,914 | November 20, 2026 |
| 6.2. | Non-standing Directors |
As of March 31, 2024, 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, 2024 are set forth below.
Name | Date of Birth | Position | Common Shares Owned | End of Term(1) | ||||
Jae Keun Lee | May 1966 | Non-standing Director | 1,119 | March 21, 2025 |
| 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 2024, which is expected be held in March 2025. |
| 6.3. | Non-executive Directors |
As of March 31, 2024, 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, 2024 were as follows.
Name | Date of Birth | Position | Common Shares Owned | End of Term | ||||||
Seon-joo Kwon | November 1956 | Non-executive Director | — | March 21, 2025 | ||||||
Whajoon Cho | February 1957 | Non-executive Director | — | March 23, 2025 | ||||||
Gyutaeg Oh | February 1959 | Non-executive Director | — | March 21, 2025 | ||||||
Jungsung Yeo | April 1960 | Non-executive Director | — | March 23, 2025 | ||||||
Jaehong Choi | August 1962 | Non-executive Director | — | March 21, 2025 | ||||||
Myong-Hwal Lee | May 1964 | Non-executive Director | — | March 21, 2026 | ||||||
Sung-Yong Kim | March 1966 | Non-executive Director | March 23, 2025 | |||||||
| 6.4. | Senior Management |
Members of our senior management as of March 31, 2024 are as follows.
Name | Date of Birth | Position | Common Shares Owned(1) | End of Term | ||||||
Seung Jong Lee | January 1966 | Senior Executive Vice President and Chief Strategy Officer | 1,198 | December 31, 2024 | ||||||
Jae Kwan Kim | July 1968 | Senior Executive Vice President and Chief Finance Officer | 4,807 | December 31, 2024 | ||||||
Cheal Soo Choi | October 1966 | Senior Executive Vice President and Chief Risk Management Officer | 504 | December 31, 2024 | ||||||
Scott Y.H. Seo | March 1966 | Senior Executive Vice President and Chief Business Officer of Global | 2,000 | December 31, 2024 | ||||||
Young Suh Cho | February 1971 | Senior Executive Vice President, Chief Digital Officer and Chief IT Officer | 1,000 | December 31, 2024 | ||||||
Dae Hwan Lim | November 1965 | Senior Executive Vice President and Chief Compliance Officer | 1,715 | December 31, 2025 | ||||||
Bong Joong Kwon | November 1969 | Senior Managing Director and Head of the IR Division | 2,103 | December 31, 2024 | ||||||
Hyo Ik Park | January 1970 | Senior Managing Director and Chief Business Officer of Insurance | 784 | December 31, 2024 | ||||||
Dae Hyun Cha | January 1966 | Senior Managing Director and Chief Officer of Audit Department | 1,244 | December 31, 2024 | ||||||
Keoung Nam Kim | August 1967 | Managing Director and Head of the ESG Division | 1,213 | December 31, 2024 | ||||||
Sang Rock Na | August 1972 | Managing Director and General Manager of the Financial Planning Department | 743 | December 31, 2025 | ||||||
Hyo Sung Jeon | March 1971 | Managing Director and Chief Human Resources Officer | 1,272 | December 31, 2025 | ||||||
Ki Won Seo | November 1972 | Managing Director and General Manager of the Office of Board of Directors | 665 | December 31, 2025 | ||||||
Jin Young Park | September 1972 | Chief Public Relation Officer | 1,680 | December 31, 2024 | ||||||
Jin Ho Jeong | October 1967 | Head of the DT Division | 2,138 | December 31, 2024 | ||||||
Chang Hwa Yook | December 1967 | Head of the AI Division | 657 | December 31, 2024 | ||||||
Sang Won Oh | December 1967 | Head of the IT Division | 676 | December 31, 2024 | ||||||
Yoon Ha | March 1971 | Head of the Customer Experience Design Center | — | December 31, 2024 | ||||||
Soon Young Oh | August 1977 | Head of the Financial AI Center | — | December 31, 2024 | ||||||
Ki Eun Park | September 1970 | Head of the Group Architecture Center | 261 | December 31, 2024 | ||||||
Joo Hyun Kim | November 1970 | Head of the Group Cloud Center | 281 | December 31, 2024 | ||||||
Chan Yong Park | September 1965 | Head of the Planning & Coordination Department | 1,134 | December 31, 2024 | ||||||
Note: | (1) | The numbers of common shares owned are as of March 31, 2024 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. |
Subsequent to the end of the first quarter of 2024, the following individuals joined as members of our senior management in April 2024.
Name | Date of Birth | Position | Common Shares Owned(3) | End of Term | ||||||
Shin Dong Jeung(1) | January 1966 | Senior Managing Director and the Head of KB Research | — | December 31, 2024 | ||||||
Young Sei Park(2) | January 1968 | Head of Consumer Protection Division | 522 | December 31, 2024 | ||||||
Notes: | (1) | Newly appointed on April 6, 2024. |
| (2) | Newly appointed on April 26, 2024. |
| (3) | The number of common shares owned is as of March 31, 2024 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 31, 2024, 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 | |||
Keoung Nam Kim | Kookmin Bank | Managing Director, ESG Division | January 2024 | |||
Jin Young Park | Kookmin Bank | Managing Director, Brand & PR Group | January 2024 | |||
Jin Ho Jeong | Kookmin Bank | Senior Executive Vice President, DT Initiative Division | January 2024 | |||
Chang Hwa Yook | Kookmin Bank | Senior Executive Vice President, AI/Data Innovation Division | January 2024 | |||
Sang Won Oh | Kookmin Bank | Senior Executive Vice President, Tech Development Division | January 2024 | |||
Yoon Ha | Kookmin Bank | Head of the Customer Experience Design Center | January 2022 | |||
Soon Young Oh | Kookmin Bank | Managing Director, Financial AI Center | June 2022 | |||
Ki Eun Park | Kookmin Bank | Senior Executive Vice President, Tech Development Division | January 2024 | |||
Joo Hyun Kim | Kookmin Bank | Head of the Cloud Platform Department | February 2022 | |||
Chan Yong Park | Kookmin Bank | Senior Executive Vice President, Planning & Coordination Department | January 2024 | |||
Seung Jong Lee | KB Securities | Non-standing Director | March 2024 | |||
| KB Life Insurance | Non-standing Director | March 2024 | ||||
Jae Kwan Kim | KB Insurance | Non-standing Director | March 2024 | |||
| KB Kookmin Card | Non-standing Director | March 2024 | ||||
Sang Rock Na | KB Capital | Non-standing Director | March 2021 | |||
| KB Investment | Non-standing Director | August 2020 |
Subsequent to the end of the first quarter of 2024, the following addition was made to our list of management members who also served as senior management members at our subsidiaries, on April 26, 2024.
Name | Subsidiary | Position | Appointment Date | |||
Young Sei Park | Kookmin Bank | Senior Executive Vice President, Consumer Protection Group | January 2024 |
| 6.5. | Employees |
[Not required to be disclosed in quarterly reports]
| 7. | Major Shareholders and Related Party Transactions |
| 7.1. | Major Shareholders |
[Not required to be disclosed in quarterly reports]
| 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 | 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 | |||||||
Korean National Pension Service | June 30, 2022 | 33,830,623 | 8.20 | |||||||
Korean National Pension Service | September 30, 2022 | 32,594,691 | 7.97 | |||||||
Korean National Pension Service | October 12, 2022 | 32,457,827 | (5) | 7.94 | ||||||
Korean National Pension Service | December 31, 2022 | 32,499,151 | 7.95 | |||||||
Korean National Pension Service | March 31, 2023 | 33,572,593 | 8.21 | |||||||
Korean National Pension Service | June 30, 2023 | 33,183,590 | 8.22 | |||||||
Korean National Pension Service | September 30, 2023 | 35,321,767 | 8.75 | |||||||
Korean National Pension Service | October 6, 2023 | 35,273,578 | 8.74 | |||||||
Korean National Pension Service | December 31, 2023 | 33,473,917 | 8.30 | |||||||
Korean National Pension Service | February 29, 2024 | 33,704,092 | 8.35 | |||||||
Korean National Pension Service | March 31, 2024 | 33,200,471 | 8.23 | |||||||
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: |
From December 12, 2019 to February 14, 2022: 415,807,920
From February 14, 2022 to August 1, 2022: 412,352,494
From August 1, 2022 to April 4, 2023: 408,897,068
After April 4, 2023: 403,511,072
| (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. |
| (5) | Based on disclosure made by the Korean National Pension Service in a statement of disposal filing on November 2, 2022. |
| 7.3. | Employee Stock Ownership Association |
[Not required to be disclosed in quarterly reports]
| 7.4. | Investments in Affiliated Companies |
[Not required to be disclosed in quarterly reports]
| 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 | |||||||
| (Unit: in billions of Won) | ||||||||||||||
Issuer | Relationship | Type | Issue | Issue Date | Interest | Maturity Date | Use of | |||||||
KB Securities Co., Ltd. | Subsidiary | No. 3 Private Placement of Capital Securities in Won | 230 | September 30, 2022 | 5.500% | September 30, 2052 (may be extended) | Working capital | |||||||
| (Unit: in billions of Won) | ||||||||||||||
Issuer | Relationship | Type | Issue | Issue Date | Interest | Maturity Date | Use of | |||||||
KB Securities Co., Ltd. | Subsidiary | No. 4 Private Placement of Capital Securities in Won | 100 | May 8, 2023 | 5.350% | May 8, 2053 (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%(1) | 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%(1) | 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%(1) | 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 | 7.664%(1) | April 27, 2047 | 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. 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 | |||||||
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 Date | Interest | Maturity Date | |||||||
KB Investment Co., Ltd. | Subsidiary | Loans(1) | 10 | 10 | July 14, 2017 | 2.654% | July 12, 2024 | |||||||
Notes: (1) Unsecured credit loans. | ||||||||||||||
| (Unit: in billions of Won) | ||||||||||||||
Name | Relationship | Account | Loan Amount | Current | Credit Offering Date | Interest | Maturity Date | |||||||
KB Investment Co., Ltd. | Subsidiary | Loans(1) | 40 | 40 | July 13, 2018 | 2.654% | July 12, 2024 | |||||||
Notes: (1) Unsecured credit loans. | ||||||||||||||
| (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 | March 8, 2019 | 2.694% | March 7, 2025 | |||||||
Notes: (1) Unsecured credit loans. | ||||||||||||||
| (Unit: in billions of Won) | ||||||||||||||
Name | Relationship | Account | Loan Amount | Current | Credit Offering Date | Interest | Maturity Date | |||||||
KB Investment Co., Ltd. | Subsidiary | Loans(1) | 30 | 30 | March 9, 2020 | 2.694% | March 7, 2025 | |||||||
Notes: (1) Unsecured credit loans. | ||||||||||||||
| (Unit: in billions of Won) | ||||||||||||||
Name | Relationship | Account | Loan Amount | Current | Credit Offering Date | Interest | Maturity Date | |||||||
KB Investment Co., Ltd. | Subsidiary | Loans(1) | 30 | 30 | July 13, 2020 | 2.654% | July 12, 2024 | |||||||
Notes: (1) Unsecured credit loans. | ||||||||||||||
| (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 | 2.685% | December 19, 2024 | |||||||
Note: (1) Unsecured credit loans. | ||||||||||||||
| (Unit: in billions of Won) | ||||||||||||||
Name | Relationship | Account | Loan Amount | Current | Credit Offering Date | Interest | Maturity Date | |||||||
KB Investment Co., Ltd. | Subsidiary | Loans(1) | 60 | 60 | July 13, 2022 | 2.654% | July 12, 2024 | |||||||
Note: (1) Unsecured credit loans. | ||||||||||||||
| (Unit: in billions of Won) | ||||||||||||||
Name | Relationship | Account | Loan Amount | Current | Credit Offering Date | Interest | Maturity Date | |||||||
KB Investment Co., Ltd. | Subsidiary | Loans(1) | 50 | 50 | July 13, 2023 | 2.654% | July 12, 2024 | |||||||
Note: (1) Unsecured credit loans. | ||||||||||||||
| (Unit: in billions of Won) | ||||||||||||||
Name | Relationship | Account | Loan Amount | Current | Credit Offering Date | Interest | Maturity Date | |||||||
KB Capital Co., Ltd. | Subsidiary | Loans(1) | 200 | 200 | November 25, 2022 | 2.470% | November 24, 2024 | |||||||
Note: (1) Unsecured credit loans. | ||||||||||||||
| (Unit: in billions of Won) | ||||||||||||||
Name | Relationship | Account | Loan Amount | Current | Credit Offering Date | Interest | Maturity Date | |||||||
KB Real Estate Trust Co., Ltd. | Subsidiary | Loans(1) | 50 | 50 | July 25, 2023 | 4.275% | July 24, 2024 | |||||||
Note: (1) Unsecured credit loans. | ||||||||||||||
| (Unit: in billions of Won) | ||||||||||||||
Name | Relationship | Account | Loan Amount | Current | Credit Offering Date | Interest | Maturity Date | |||||||
KB Real Estate Trust Co., Ltd. | Subsidiary | Loans(1) | 35 | 35 | February 28, 2024 | 4.081% | February 18, 2025 | |||||||
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: May 16, 2024 | By: /s/ Jae Kwan Kim | |||||||
| (Signature) | ||||||||
| Name: | Jae Kwan Kim | |||||||
| Title: | Senior Executive Vice President and Chief Finance Officer | |||||||
