Table of Contents
Exhibit 99.2
KB Financial Group Inc.
Separate Interim Financial Statements
March 31, 2024 and 2023
(Unaudited)
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Report on Review of Condensed Separate Interim Financial Statements
(English Translation of a Report Originally Issued in Korean)
To the Shareholders and the Board of Directors of
KB Financial Group Inc.
Reviewed Financial Statements
We have reviewed the accompanying condensed separate interim financial statements of KB Financial Group Inc. (the “Company”). These condensed separate interim financial statements consist of the separate interim statement of financial position of the Company as at March 31, 2024, and the related separate interim statements of comprehensive income, changes in equity and cash flows for the three-month periods ended March 31, 2024 and 2023, and material accounting policy information and other selected explanatory notes, expressed in Korean Won.
Management’s Responsibility for the Financial Statements
Management is responsible for the preparation and presentation of these condensed separate interim financial statements in accordance with International Financial Reporting Standards as adopted by the Republic of Korea (“Korean IFRS”) No.1034 Interim Financial Reporting, and for such internal control as management determines is necessary to enable the preparation of condensed separate interim financial statements that are free from material misstatement, whether due to fraud or error.
Auditor’s Responsibility
Our responsibility is to express a conclusion on these condensed separate interim financial statements based on our review.
We conducted our review in accordance with quarterly or semi-annual review standards established by the Securities and Futures Commission of the Republic of Korea. A review of interim financial information consists of making inquiries, primarily of persons responsible for financial and accounting matters, and applying analytical and other review procedures. A review is substantially less in scope than an audit conducted in accordance with Korean Standards on Auditing and consequently does not enable us to obtain assurance that we would become aware of all significant matters that might be identified in an audit. Accordingly, we do not express an audit opinion.
Conclusion
Based on our review, nothing has come to our attention that causes us to believe the accompanying condensed separate interim financial statements are not prepared, in all material respects, in accordance with Korean IFRS 1034 Interim Financial Reporting.
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Other Matters
We have audited the separate statement of financial position of the Company as at December 31, 2023, and the related separate statements of comprehensive income, changes in equity and cash flows for the year then ended, not presented herein, in accordance with Korean Standards on Auditing. We expressed an unqualified opinion on those financial statements in our audit report dated March 6, 2024. The separate statement of financial position as at December 31, 2023, presented herein for comparative purposes, is consistent, in all material respects, with the above audited statement of financial position as at December 31, 2023.
Review standards and their application in practice vary among countries. The procedures and practices used in the Republic of Korea to review such financial statements may differ from those generally accepted and applied in other countries.
/s/ Samil PricewaterhouseCoopers
Seoul, Korea
May 16, 2024
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KB Financial Group Inc.
Separate Interim Statements of Financial Position
March 31, 2024 and December 31, 2023
(In millions of Korean won) | Notes | March 31, 2024 (Unaudited) | December 31, 2023 | |||||||||
Assets | ||||||||||||
Cash and due from financial institutions | 4,5,6,23 | |||||||||||
Financial assets at fair value through profit or loss | 4,5,7 | 1,062,613 | 1,376,423 | |||||||||
Loans measured at amortized cost | 4,5,8 | 643,195 | 608,286 | |||||||||
Investments in subsidiaries | 9 | 26,717,817 | 26,717,817 | |||||||||
Property and equipment | 3,766 | 3,080 | ||||||||||
Intangible assets | 15,409 | 15,954 | ||||||||||
Net defined benefit assets | 13 | 3,347 | 3,694 | |||||||||
Deferred income tax assets | 10 | 7,873 | 4,492 | |||||||||
Other assets | 4,5 | 1,069,424 | 542,815 | |||||||||
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Total assets | ||||||||||||
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Liabilities | ||||||||||||
Borrowings | 4,5,11 | 465,000 | 100,000 | |||||||||
Debentures | 4,5,12 | 3,267,247 | 3,871,820 | |||||||||
Current income tax liabilities | 127,739 | 104,299 | ||||||||||
Other liabilities | 4,5 | 1,093,802 | 410,704 | |||||||||
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Total liabilities | 4,953,788 | 4,486,823 | ||||||||||
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Equity | 14 | |||||||||||
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 | ) | ||||||||
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Total equity | 27,191,268 | 25,042,075 | ||||||||||
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Total liabilities and equity | ||||||||||||
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The above separate interim statements of financial position should be read in conjunction with the accompanying
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KB Financial Group Inc.
Separate Interim Statements of Comprehensive Income
Three-Month Periods Ended March 31, 2024 and 2023
(In millions of Korean won, except per share amounts) | Notes | 2024 | 2023 | |||||||||
Interest income | ||||||||||||
Interest income from financial instruments at amortized cost | 9,115 | 5,551 | ||||||||||
Interest income from financial instruments at fair value through profit or loss | 702 | 1,119 | ||||||||||
Interest expense | (23,542 | ) | (26,724 | ) | ||||||||
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Net interest expense | 16 | (13,725 | ) | (20,054 | ) | |||||||
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Fee and commission income | 378 | 372 | ||||||||||
Fee and commission expense | (1,520 | ) | (1,619 | ) | ||||||||
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Net fee and commission expense | 17 | (1,142 | ) | (1,247 | ) | |||||||
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Net gains (losses) on financial instruments at fair value through profit or loss | 18 | 15,579 | 45,428 | |||||||||
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Net other operating income | 19 | 2,243,250 | 2,192,380 | |||||||||
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General and administrative expenses | 20 | (24,187 | ) | (22,902 | ) | |||||||
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Operating income before provision for credit losses | 2,219,775 | 2,193,605 | ||||||||||
Provision for credit losses | (96 | ) | — | |||||||||
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Net operating income | 2,219,679 | 2,193,605 | ||||||||||
Net non-operating income (expense) | (646 | ) | 13 | |||||||||
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Profit before tax | 2,219,033 | 2,193,618 | ||||||||||
Income tax benefit (expense) | 21 | 3,586 | (10,691 | ) | ||||||||
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Profit for the period | 2,222,619 | 2,182,927 | ||||||||||
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Items that will not be reclassified to profit or loss: | ||||||||||||
Remeasurements of net defined benefit liabilities | 47 | 17 | ||||||||||
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Other comprehensive income(loss) for the period, net of tax | 47 | 17 | ||||||||||
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Total comprehensive income for the period | ||||||||||||
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Earnings per share | 22 | |||||||||||
Basic earnings per share | ||||||||||||
Diluted earnings per share | 5,612 | 5,394 |
The above separate interim statements of comprehensive income should be read in conjunction with the accompanying notes.
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KB Financial Group Inc.
Separate Interim Statements of Changes in Equity
Three-Month Periods Ended March 31, 2024 and 2023
(In millions of Korean won) | Share capital | Hybrid securities | Capital surplus | Accumulated other comprehensive income | Retained earnings | Treasury shares | Total equity | |||||||||||||||||||||
Balance as of January 1, 2023 | ||||||||||||||||||||||||||||
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Comprehensive income for the period | ||||||||||||||||||||||||||||
Profit for the period | — | — | — | — | 2,182,927 | — | 2,182,927 | |||||||||||||||||||||
Remeasurements of net defined benefit liabilities | — | — | — | 17 | — | — | 17 | |||||||||||||||||||||
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Total comprehensive income for the period | — | — | — | 17 | 2,182,927 | — | 2,182,944 | |||||||||||||||||||||
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Transactions with shareholders | ||||||||||||||||||||||||||||
Annual dividends | — | — | — | — | (564,970 | ) | — | (564,970 | ) | |||||||||||||||||||
Acquisition of treasury shares | — | — | — | — | — | (271,745 | ) | (271,745 | ) | |||||||||||||||||||
Issuance of hybrid securities | — | 598,537 | — | — | — | — | 598,537 | |||||||||||||||||||||
Dividends on hybrid securities | — | — | — | — | (40,703 | ) | — | (40,703 | ) | |||||||||||||||||||
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Total transactions with shareholders | — | 598,537 | — | — | (605,673 | ) | (271,745 | ) | (278,881 | ) | ||||||||||||||||||
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Balance as of March 31, 2023 | ||||||||||||||||||||||||||||
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Balance as of January 1, 2024 | ||||||||||||||||||||||||||||
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Comprehensive income for the period | ||||||||||||||||||||||||||||
Profit for the period | — | — | — | — | 2,222,619 | — | 2,222,619 | |||||||||||||||||||||
Remeasurements of net defined benefit liabilities | — | — | — | 47 | — | — | 47 | |||||||||||||||||||||
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Total comprehensive income for the period | — | — | — | 47 | 2,222,619 | — | 2,222,666 | |||||||||||||||||||||
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Transactions with shareholders | ||||||||||||||||||||||||||||
Annual dividends | — | — | — | — | (587,006 | ) | — | (587,006 | ) | |||||||||||||||||||
Acquisition of treasury shares | — | — | — | — | — | (65,537 | ) | (65,537 | ) | |||||||||||||||||||
Disposal of treasury shares | — | — | — | — | — | 234,600 | 234,600 | |||||||||||||||||||||
Consideration for exchange right of exchangeable bonds | — | — | (11,933 | ) | — | — | — | (11,933 | ) | |||||||||||||||||||
Issuance of hybrid securities | — | 399,045 | — | — | — | — | 399,045 | |||||||||||||||||||||
Dividends on hybrid securities | — | — | — | — | (48,070 | ) | — | (48,070 | ) | |||||||||||||||||||
Others | — | — | 5,428 | — | — | — | 5,428 | |||||||||||||||||||||
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Total transactions with shareholders | — | 399,045 | (6,505 | ) | — | (635,076 | ) | 169,063 | (73,473 | ) | ||||||||||||||||||
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Balance as of March 31, 2024 | ||||||||||||||||||||||||||||
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The above separate interim statements of changes in equity should be read in conjunction with the accompanying notes.
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KB Financial Group Inc.
Separate Interim Statements of Cash Flows
Three-Month Periods Ended March 31, 2024 and 2023
(In millions of Korean won) | Notes | 2024 | 2023 | |||||||||
Cash flows from operating activities | ||||||||||||
Profit for the period | ||||||||||||
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Adjustment for non-cash items | ||||||||||||
Depreciation and amortization expense | 1,526 | 1,446 | ||||||||||
Provision for credit losses | 96 | — | ||||||||||
Share-based payments | 4,573 | 1,098 | ||||||||||
Net interest expense | 1,290 | 731 | ||||||||||
Valuation losses (gains) on financial assets | (1,847 | ) | (32,503 | ) | ||||||||
Net other income (expense) | 1,023 | 380 | ||||||||||
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6,661 | (28,848 | ) | ||||||||||
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Changes in operating assets and liabilities | ||||||||||||
Deferred income tax assets | (3,586 | ) | 10,692 | |||||||||
Other assets | (417,743 | ) | (2,038 | ) | ||||||||
Other liabilities | (5,573 | ) | (3,624 | ) | ||||||||
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(426,902 | ) | 5,030 | ||||||||||
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Net cash inflow from operating activities | 1,802,378 | 2,159,109 | ||||||||||
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Cash flows from investing activities | ||||||||||||
Disposal of financial assets at fair value through profit of loss | 316,080 | 300,000 | ||||||||||
Increase in loans measured at amortized cost | (35,000 | ) | — | |||||||||
Acquisition of property and equipment | (7 | ) | (95 | ) | ||||||||
Acquisition of intangible assets | (74 | ) | (140 | ) | ||||||||
Disposal of intangible assets | — | 34 | ||||||||||
Net increase in guarantee deposits paid | 1,607 | 78 | ||||||||||
Other investing activities | — | (161 | ) | |||||||||
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Net cash inflow from investing activities | 282,606 | 299,716 | ||||||||||
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Cash flows from financing activities | ||||||||||||
Increase in borrowings | 365,000 | — | ||||||||||
Decrease in debentures | (370,000 | ) | (410,000 | ) | ||||||||
Redemption of principal of lease liabilities | (147 | ) | (139 | ) | ||||||||
Acquisition of treasury shares | (65,537 | ) | (271,745 | ) | ||||||||
Issuance of hybrid securities | 399,045 | 598,537 | ||||||||||
Dividends paid on hybrid securities | (48,070 | ) | (40,704 | ) | ||||||||
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Net cash inflow (outflow) from financing activities | 280,291 | (124,051 | ) | |||||||||
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Net increase in cash and cash equivalents | 2,365,275 | 2,334,774 | ||||||||||
Cash and cash equivalents at the beginning of the period | 23 | 116,334 | 231,053 | |||||||||
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Cash and cash equivalents at the end of the period | 23 | |||||||||||
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The above separate statements of cash flows should be read in conjunction with the accompanying notes.
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KB Financial Group Inc.
Notes to the Separate Interim Financial Statements
March 31, 2024 and 2023 (Unaudited), and December 31, 2023
1. The Company
KB Financial Group Inc. (the “Company”), in accordance with Financial Holding Companies Act, was established on September 29, 2008, through stock transfers with the former shareholders of Kookmin Bank, KB Investment & Securities Co., Ltd., KB Asset Management Co., Ltd., KB Real Estate Trust Co., Ltd., KB Investment Co., Ltd., KB Futures Co., Ltd., KB Credit Information Co., Ltd., and KB Data Systems Co., Ltd., and the Company’s main business purpose is to control subsidiaries that engage in the financial business or subsidiaries closely related to the financial business through the stock ownership. The headquarter is located at 26, Gukjegeumyung-ro 8-gil, Yeongdeungpo-gu, Seoul. The Company’s share capital as of March 31, 2024, isW 2,090,558 million. In 2011, Kookmin Bank spun off its credit card business segment and established a new separate credit card company, KB Kookmin Card Co., Ltd., and KB Investment & Securities Co., Ltd. merged with KB Futures Co., Ltd. The Company established KB Savings Bank Co., Ltd. in January 2012, acquired Yehansoul Savings Bank Co., Ltd. in September 2013, and KB Savings Bank Co., Ltd. merged with Yehansoul Savings Bank Co., Ltd. in January 2014. In March 2014, the Company acquired Woori Financial Co., Ltd. and changed the name to KB Capital Co., Ltd. Meanwhile, the Company included LIG Insurance Co., Ltd. as an associate and changed the name to KB Insurance Co., Ltd. in June 2015, and KB Insurance Co., Ltd. became one of the subsidiaries through a tender offer in May 2017. Also, the Company included Hyundai Securities Co., Ltd. as an associate in June 2016 and included as a subsidiary in October 2016 by comprehensive exchange of shares. Hyundai Securities Co., Ltd. merged with KB Investment & Securities Co., Ltd. in December 2016 and changed its name to KB Securities Co., Ltd. in January 2017. In August 2020, the Group acquired Prudential Life Insurance Company of Korea Ltd. which was classified as a subsidiary and the name was changed to KB Life Insurance Co., Ltd. in December 2022. Then in January 2023, it merged with another existing KB Life Insurance Co., Ltd. The Company sold 100% shares of KB Credit Information Co., Ltd. to KB Kookmin Card Co., Ltd. on June 30, 2023.
The Company has been listed on the Korea Exchange (“KRX”) since October 10, 2008, and on the New York Stock Exchange (“NYSE”) for its American Depositary Shares (“ADS”) since September 29, 2008. Number of shares authorized on its Articles of Incorporation is 1,000 million.
2. Basis of Preparation
2.1 Application of Korean IFRS
The Company maintains its accounting records in Korean won and prepares statutory financial statements in the Korean language in accordance with International Financial Reporting Standards as adopted by the Republic of Korea (“Korean IFRS”). The accompanying separate financial statements have been translated into English from the Korean language separate financial statements.
The separate financial statements of the Company have been prepared in accordance with Korean IFRS. Korean IFRS are the standards and related interpretations issued by the International Accounting Standards Board (“IASB”) that have been adopted by the Republic of Korea.
The preparation of separate financial statements requires the use of certain critical accounting estimates. Management also needs to exercise judgment in applying the Company’s accounting policies. The areas that require a more complex and higher level of judgment or areas that require significant assumptions and estimations are disclosed in Note 2.4.
The separate financial statements have been prepared in accordance with Korean IFRS No.1027 Separate Financial Statements.
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KB Financial Group Inc.
Notes to the Separate Interim Financial Statements
March 31, 2024 and 2023 (Unaudited), and December 31, 2023
2.1 Application of Korean IFRS (cont’d)
The Company’s condensed separate interim financial statements for the three-month period ended March 31, 2024, have been prepared in accordance with Korean IFRS No.1034 Interim Financial Reporting and contain less information than is required in annual separate financial statements. Selected explanatory notes include descriptions of transactions or events that are significant in understanding change in financial position and financial performance of the Company since the end of the previous annual reporting period. These separate interim financial statements have been prepared in accordance with Korean IFRS which is effective or early adopted as of March 31, 2024.
2.1.1 The Company has applied the following new and amended standards for the first time for its annual reporting period commencing January 1, 2024.
• | Amendment of Korean IFRS No.1001 “Presentation of Financial Statements” – Classification of Liabilities into Current and Non-Current and Non-current Liabilities with Covenants |
Liabilities are classified as current or non-current based on their substantive rights existing at the end of the reporting period, without considering the possibility of exercising the right to delay the payment or management’s expectations. Also, if the transfer of equity instruments is included in the payment of liabilities, it is excluded if the option to pay with equity instruments is recognized separately from the liability in a compound financial instrument and meets the definition of equity instruments. These amendments do not have a significant impact on the financial statements.
• | Amendment of Korean IFRS No.1007 “Statement of Cash Flows” and No.1107 “Financial Instruments: Disclosures” – Disclosure of Supplier Finance Arrangements |
The amendments require disclosure of the effects of supplier finance arrangements on the Company’s liabilities, cash flows and exposure to liquidity risk. These amendments do not have a significant impact on the financial statements.
• | Amendment of Korean IFRS No.1116 “Leases” – Lease Liability in a Sale and Leaseback |
The amendments require a seller-lessee to subsequently measure lease liabilities arising from a leaseback in a way that it does not recognize any amount of the gain or loss that relates to the right of use it retains. These amendments do not have a significant impact on the financial statements.
• | Amendment of Korean IFRS No.1001 “Presentation of Financial Statements” – Disclosure of Virtual Asset |
The amendments require additional disclosure for virtual assets held by the Company, virtual assets entrusted by customers to the Company, and the issuance and transfer of virtual assets. These amendments do not have a significant impact on the financial statements.
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KB Financial Group Inc.
Notes to the Separate Interim Financial Statements
March 31, 2024 and 2023 (Unaudited), and December 31, 2023
2.1.2 The following are the accounting standards that have been established or announced but have not yet been implemented, which the Group has not applied
• | Amendment of Korean IFRS No.1021 “The Effects of Changes in Foreign Exchange Rates” and Korean IFRS No.1101 “First-time Adoption of International Financial Reporting Standards” – Lack of exchangeability |
The amendments require the Company to determine a spot exchange rate when exchangeability is lacking, and to disclose information on the nature and financial effects of the currency not being exchangeable into the other currency, the spot exchange rate(s) used, the estimation process, and the risks to which the Company is exposed. This amendment will be applied to the financial statements for the accounting year beginning on or after January 1, 2025. These amendments do not have a significant impact on the financial statements.
2.2 Measurement Basis
The separate financial statements have been prepared under the historical cost convention unless otherwise specified.
2.3 Functional and Presentation Currency
Items included in the separate financial statements of the Company are measured using the currency of the primary economic environment in which the Company operates (“functional currency”). The separate financial statements are presented in Korean won, which is the Company’s functional and presentation currency.
2.4 Critical Accounting Estimates
The Company applies accounting policies and uses judgements, accounting estimates, and assumptions that may have a significant impact on the assets (liabilities) and incomes (expenses) in preparing the separate financial statements. Management’s estimates of outcomes may differ from actual outcomes if management’s estimates and assumptions based on management’s best judgment are different from the actual environment.
Estimates and underlying assumptions are continually evaluated, and changes in accounting estimates are recognized in the period in which the estimates are changed and in any future periods affected.
Uncertainties in estimates and assumptions with significant risks used in the preparation of these condensed separate interim financial statements are the same as 2023 financial statements, except for the method of estimating income tax expense.
3. Material Accounting Policies
The material accounting policies and calculation methods applied in the preparation of these condensed separate interim financial statements are the same as those applied to the separate financial statements for the year ended December 31, 2023, except for the impact of changes due to adopting new and amended standards and interpretations described in Note 2.1 and below paragraph.
The Company is subject to Pillar2 income taxes, and has applied a temporary exemption provision regarding the recognition and disclosure of deferred taxes related to the Pillar 2 rules.
Income tax expense for the interim period is measured applying the expected average annual income tax rate applicable on expected total annual income.
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KB Financial Group Inc.
Notes to the Separate Interim Financial Statements
March 31, 2024 and 2023 (Unaudited), and December 31, 2023
4. Financial Risk Management
4.1 Summary
4.1.1 Overview of financial risk management policy
The financial risks that the Company is exposed to are credit risk, market risk, liquidity risk, operational risk and others.
This note regarding financial risk management provides information about the risks that the Company is exposed to and about its objectives, policies, risk assessment and management procedures, and capital management. Additional quantitative information is disclosed throughout the separate financial statements.
The Company’s risk management system focuses on efficiently supporting long-term strategy and management decisions of the Company by increasing risk transparency, preventing risk transfer between subsidiaries and preemptive response to rapidly changing financial environments. Credit risk, market risk, liquidity risk, operational risk, interest rate risk, insurance risk, credit concentration risk, strategy risk, and reputation risk are recognized as significant risks.
4.1.2 Risk management organization
4.1.2.1 Risk Management Committee
The Risk Management Committee, as the ultimate decision-making body, deals with risk-related issues, such as establishing risk management strategies in accordance with the strategic direction determined by the board of directors, determining the affordable level of risk appetite, reviewing the level of risk and the status of risk management activities, approving the application of risk management systems, methodologies, and major improvements, and establishing and approving risk management policies and procedures to timely recognize, measure, monitor, and control risks arising from various transactions by the Company and subsidiaries (the “Group”).
4.1.2.2 Risk Management Council
The Risk Management Council is responsible for consulting on matters delegated by the Risk Management Committee and requests for review by the Group Management Executive Committee, consulting on details of each subsidiary’s risk management policies and procedures, monitoring the Group’s risk management status, and establishing and implementing necessary measures.
4.1.2.3 Risk Management Department
The Risk Management Department performs the Company’s risk management detailed policies, procedures, and business processes, and is responsible for calculating the Group’s risk-weighted assets, monitoring and managing internal capital limits.
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KB Financial Group Inc.
Notes to the Separate Interim Financial Statements
March 31, 2024 and 2023 (Unaudited), and December 31, 2023
4.2 Credit Risk
4.2.1 Overview of credit risk
Credit risk is the risk of loss from the portfolio of assets held due to the counterparty’s default, breach of contract, and deterioration of credit quality. For risk management purposes, the Company considers default risk of individual borrowers.
4.2.2 Credit risk management
The Company measures the expected losses of assets subject to credit risk management and uses them as a management indicator.
4.2.3 Maximum exposure to credit risk
The Company’s maximum exposures to credit risk without consideration of collateral values in relation to financial instruments other than equity securities as of March 31, 2024 and December 31, 2023, are as follows:
(In millions of Korean won) | March 31, 2024 | December 31, 2023 | ||||||
Due from financial institutions | ||||||||
Loans measured at amortized cost * | 643,195 | 608,286 | ||||||
Loans measured at fair value through profit or loss | 49,753 | 48,981 | ||||||
Other financial assets * | 462,889 | 57,562 | ||||||
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* | After netting of allowance |
4.2.4 Credit risk of loans
The Company maintains allowances for loan losses associated with credit risk of loans to manage its credit risk.
The Company assesses expected credit losses and recognizes loss allowances of financial assets at amortized cost and financial asset at fair value through other comprehensive income. Financial assets at fair value through profit or loss are excluded. Expected credit losses are a probability-weighted estimate of possible credit losses occurring in a certain range by reflecting reasonable and supportable information that is reasonably available at the end of the reporting period without undue cost or effort, including information about past events, current conditions, and forecasts of future economic conditions. The Company measures the expected credit losses on loans classified as financial assets at amortized cost, by deducting allowances for credit losses. The expected credit losses of loans classified as financial assets at fair value through other comprehensive income are presented in other comprehensive income in the financial statements.
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KB Financial Group Inc.
Notes to the Separate Interim Financial Statements
March 31, 2024 and 2023 (Unaudited), and December 31, 2023
4.2.4 Credit risk of loans (cont’d)
Credit qualities of loans measured at amortized cost as of March 31, 2024 and December 31 2023, are classified as follows:
March 31, 2024 | ||||||||||||||||||||
(In millions of Korean won) | 12-month expected credit losses | Lifetime expected credit losses | Not applying expected credit losses | Total | ||||||||||||||||
Not-impaired | Impaired | |||||||||||||||||||
Loans measured at amortized cost * |
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Corporate |
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Grade 2 | — | — | — | — | — | |||||||||||||||
Grade 3 | — | — | — | — | — | |||||||||||||||
Grade 4 | — | — | — | — | — | |||||||||||||||
Grade 5 | — | — | — | — | — | |||||||||||||||
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(In millions of Korean won) | 12-month expected credit losses | Lifetime expected credit losses | Not applying expected credit losses | Total | ||||||||||||||||
Not-impaired | Impaired | |||||||||||||||||||
Loans measured at amortized cost * |
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Corporate |
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Grade 2 | — | — | — | — | — | |||||||||||||||
Grade 3 | — | — | — | — | — | |||||||||||||||
Grade 4 | — | — | — | — | — | |||||||||||||||
Grade 5 | — | — | — | — | — | |||||||||||||||
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* | Before netting of allowance |
Credit qualities of loans graded according to the probability of default as March 31, 2023 and December 31 2022, are as follows:
Range of probability of default (%) | ||
Grade 1 | 0.0 ~ 1.0 | |
Grade 2 | 1.0 ~ 5.0 | |
Grade 3 | 5.0 ~ 15.0 | |
Grade 4 | 15.0 ~ 30.0 | |
Grade 5 | 30.0 ~ |
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KB Financial Group Inc.
Notes to the Separate Interim Financial Statements
March 31, 2024 and 2023 (Unaudited), and December 31, 2023
4.2.5 Credit risk of due from financial institutions
Credit qualities of due from financial institutions as of March 31, 2024 and December 31 2023, are as follows:
March 31, 2024 | ||||||||||||||||||||
12-month expected credit losses | Lifetime expected credit losses | Not applying expected credit losses | Total | |||||||||||||||||
(In millions of Korean won) | Not-impaired | Impaired | ||||||||||||||||||
Due from financial institutions measured at amortized cost |
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Grade 2 | — | — | — | — | — | |||||||||||||||
Grade 3 | — | — | — | — | — | |||||||||||||||
Grade 4 | — | — | — | — | — | |||||||||||||||
Grade 5 | — | — | — | — | — | |||||||||||||||
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(In millions of Korean won) | 12-month expected credit losses | Lifetime expected credit losses | Not applying expected credit losses | Total | ||||||||||||||||
Not-impaired | Impaired | |||||||||||||||||||
Due from financial institutions measured at amortized cost |
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Grade 2 | — | — | — | — | — | |||||||||||||||
Grade 3 | — | — | — | — | — | |||||||||||||||
Grade 4 | — | — | — | — | — | |||||||||||||||
Grade 5 | — | — | — | — | — | |||||||||||||||
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Table of Contents
KB Financial Group Inc.
Notes to the Separate Interim Financial Statements
March 31, 2024 and 2023 (Unaudited), and December 31, 2023
4.2.6 Credit risk concentration analysis
4.2.6.1 Classifications of corporate loans by industry as of March 31, 2024 and December 31, 2023, are as follows:
March 31, 2024 | ||||||||||||||||
(In millions of Korean won) | Corporate loans * | % | Allowances | Carrying amount | ||||||||||||
Financial institutions | 100.00 |
December 31, 2023 | ||||||||||||||||
(In millions of Korean won) | Corporate loans * | % | Allowances | Carrying amount | ||||||||||||
Financial institutions | 100.00 |
* | Amount includes loans measured at fair value through profit or loss and amortized cost. |
4.2.6.2 Classifications of due from financial institutions by industry as of March 31, 2024 and December 31 2023, are as follows:
March 31, 2024 | ||||||||||||||||
(In millions of Korean won) | Amount | % | Allowances | Carrying amount | ||||||||||||
Due from financial institutions measured at amortized cost | ||||||||||||||||
Financial institutions | 100.00 |
December 31, 2023 | ||||||||||||||||
(In millions of Korean won) | Amount | % | Allowances | Carrying amount | ||||||||||||
Due from financial institutions measured at amortized cost | ||||||||||||||||
Financial institutions | 100.00 |
16
Table of Contents
KB Financial Group Inc.
Notes to the Separate Interim Financial Statements
March 31, 2024 and 2023 (Unaudited), and December 31, 2023
4.3 Liquidity Risk
4.3.1 Overview of liquidity risk
Liquidity risk is a risk that the Company becomes insolvent due to the mismatch between the inflow and outflow of funds, unexpected cash outflows, or a risk of loss due to financing funds at a high interest rate or disposing of securities at an unfavorable price due to lack of available funds. The Company manages its liquidity risk through analysis of the contractual maturity of all financial assets and liabilities and discloses in six categories such as on demand, less than one month, between one month to three months, between three months to one year, between one year to five years, and over five years.
4.3.2. Liquidity risk management
The liquidity risk is managed by risk management policies and liquidity risk management guidelines set forth in these policies that apply to all risk management policies and procedures that may arise throughout the overall business of the Company.
4.3.3. Analysis of remaining contractual maturity of financial liabilities
The cash flows disclosed in the maturity analysis are undiscounted contractual amounts including principal and future interest payments; as such, amounts in the table below do not match with those in the statements of financial position which are based on discounted cash flows. The future interest payments for floating-rate liabilities are calculated on the assumption that the current interest rate is the same until maturity.
Remaining contractual maturity of financial liabilities as of March 31, 2024 and December 31 2023, are as follows:
March 31, 2024 | ||||||||||||||||||||||||||||
(In millions of Korean won) | On Demand | Up to 1 month | 1-3 months | 3-12 months | 1-5 years | Over 5 years | Total | |||||||||||||||||||||
Financial liabilities | ||||||||||||||||||||||||||||
Borrowings | ||||||||||||||||||||||||||||
Debentures | — | 3,074 | 301,313 | 568,281 | 1,661,184 | 979,272 | 3,513,124 | |||||||||||||||||||||
Lease liabilities | — | 51 | 93 | 409 | 730 | — | 1,283 | |||||||||||||||||||||
Other financial liabilities | — | 601,547 | — | 5,391 | — | — | 606,938 | |||||||||||||||||||||
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December 31, 2023 | ||||||||||||||||||||||||||||
(In millions of Korean won) | On Demand | Up to 1 month | 1-3 months | 3-12 months | 1-5 years | Over 5 years | Total | |||||||||||||||||||||
Financial liabilities | ||||||||||||||||||||||||||||
Borrowings | ||||||||||||||||||||||||||||
Debentures | — | 3,074 | 388,246 | 757,507 | 1,880,375 | 1,115,241 | 4,144,443 | |||||||||||||||||||||
Lease liabilities | — | 50 | 62 | 256 | 245 | — | 613 | |||||||||||||||||||||
Other financial liabilities | — | 2,063 | — | — | — | — | 2,063 | |||||||||||||||||||||
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17
Table of Contents
KB Financial Group Inc.
Notes to the Separate Interim Financial Statements
March 31, 2024 and 2023 (Unaudited), and December 31, 2023
4.4 Market Risk
4.4.1 Concept
Market risk refers to risks that can result in losses due to changes in market factors such as interest rate, stock price, and foreign exchange rate, etc. The Company manages the market risks by dividing them into those arising from the trading position and those arising from the non-trading position.
4.4.2 Trading position
In accordance with Financial Holding Companies Act, the Company’s main business is to control financial companies or companies closely related to the financial service. And the Company cannot perform any other business other than managing activities as a holding company, therefore there is no risk of trading position.
4.4.3 Non-trading position
Non-trading position refers to the part except trading position, and the main risk the Company is managing is interest rate risk.
4.4.3.1 Interest rate risk
(a) Definition of interest rate risk
Interest rate risk refers to the risk of changes in the value (fair value) of the items in the statement of financial position due to changes in interest rate and the risk of changes in cash flows related to interest income and interest expense arising from investment and financing activities.
(b) Observation method and management indicator on interest rate risk
The main objective of interest rate risk management is to protect the value changes from interest rate fluctuations. In addition to the Interest Rate Risk in the Banking Book (“IRRBB”) standard methodology required for disclosure to measure interest rate risk.
18
Table of Contents
KB Financial Group Inc.
Notes to the Separate Interim Financial Statements
March 31, 2024 and 2023 (Unaudited), and December 31, 2023
5. Financial Assets and Financial Liabilities
5.1 Classification and Fair Value of Financial Instruments
5.1.1 Carrying amount and fair value of financial assets and liabilities by category as of March 31, 2024 and December 31, 2023, are as follows:
March 31, 2024 | ||||||||
(In millions of Korean won) | Carrying amount | Fair value | ||||||
Financial assets | ||||||||
Financial assets at fair value through profit or loss | ||||||||
Hybrid securities | ||||||||
Loans | 49,753 | 49,753 | ||||||
Financial assets at amortized cost | ||||||||
Due from financial institutions | 2,621,612 | 2,621,612 | ||||||
Loans | 643,195 | 643,195 | ||||||
Other financial assets | 462,889 | 462,889 | ||||||
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Financial liabilities | ||||||||
Financial liabilities at amortized cost | ||||||||
Borrowings | ||||||||
Debentures | 3,267,247 | 3,135,782 | ||||||
Other financial liabilities | 615,122 | 615,122 | ||||||
December 31, 2023 | ||||||||
(In millions of Korean won) | Carrying amount | Fair value | ||||||
Financial assets | ||||||||
Financial assets at fair value through profit or loss | ||||||||
Hybrid securities | ||||||||
Beneficiary certificates | 316,080 | 316,080 | ||||||
Loans | 48,981 | 48,981 | ||||||
Financial assets at amortized cost | ||||||||
Due from financial institutions | 256,337 | 256,337 | ||||||
Loans | 608,286 | 608,286 | ||||||
Other financial assets | 57,562 | 57,562 | ||||||
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Financial liabilities | ||||||||
Financial liabilities at amortized cost | ||||||||
Borrowings | ||||||||
Debentures | 3,871,820 | 3,715,939 | ||||||
Other financial liabilities | 10,381 | 10,381 | ||||||
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Fair value is defined as the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants. The Company discloses the fair value of each class of assets and liabilities in a way that permits it to be compared with its carrying amount at the end of each reporting period. The best evidence of fair value of financial instruments is quoted price in an active market.
19
Table of Contents
KB Financial Group Inc.
Notes to the Separate Interim Financial Statements
March 31, 2024 and 2023 (Unaudited), and December 31, 2023
5.1.1 Carrying amount and fair value of financial assets and liabilities by category as of March 31, 2024 and December 31, 2023, are as follows: (cont’d)
Methods of determining fair value of financial instruments are as follows:
Cash and due from financial institutions | Fair value of cash is same as carrying amount. Carrying amount of demand deposit and settlement deposit is a reasonable approximation of fair value because these financial instruments do not have a fixed maturity and are receivable on demand. Fair value of general deposit is measured using Discounted Cash Flow (“DCF”) Model. | |
Securities | Fair value of financial instruments that are quoted in an active market is determined using the quoted prices. If there is no quoted price, fair value is determined using external professional valuation institutions. The institutions use one or more valuation techniques that are deemed appropriate considering the characteristics of the financial instruments among DCF Model, Imputed Market Value Model, Free Cash Flow to Equity Model, Dividend Discount Model, Risk Adjusted Discount Rate Method, and Net Asset Value Method. | |
Derivatives | Fair value of exchange traded derivatives is determined using quoted price in an active market, and fair value of OTC derivatives is determined using valuation techniques. The Company uses internally developed valuation models that are widely used by market participants to determine fair value of plain vanilla OTC derivatives including options, interest rate swaps, and currency swaps, based on observable market parameters. However, some complex financial instruments are valued using appropriate models developed from generally accepted market valuation models including the Finite Difference Method (“FDM”), and the MonteCarlo Simulation or valuation results from independent external professional valuation institution. | |
Loans | Fair value of loans is determined using DCF model discounting the expected cash flows, which are contractual cash flows adjusted by the expected prepayment rate, at an appropriate discount rate. | |
Borrowings | DCF model is used to determine the fair value of borrowings, but in the case of short-term maturity, carrying amount is a reasonable approximation of fair value. | |
Debentures | Fair value is determined by using valuation results of external professional valuation institutions, which are calculated using market inputs. | |
Other financial assets and other financial liabilities | Carrying amount is a reasonable approximation of fair value because other financial assets and other financial liabilities are temporary accounts used for other various transactions and their maturities are relatively short or not defined. |
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Table of Contents
KB Financial Group Inc.
Notes to the Separate Interim Financial Statements
March 31, 2024 and 2023 (Unaudited), and December 31, 2023
5.1.2 Fair value hierarchy
The Company believes that valuation techniques used for measuring the fair value of financial instruments are reasonable and that the fair value recognized in the statements of financial position is appropriate. However, the fair value of the financial instruments recognized in the statements of financial position may be different if other valuation techniques or assumptions are used. Additionally, as there are a variety of valuation techniques and assumptions used in measuring fair value, it may be difficult to reasonably compare the fair value with that of other financial institutions.
The Company classifies and discloses fair value of the financial instruments into the three fair value levels as follows:
Level 1 : | The fair values are based on quoted prices (unadjusted) in active markets for identical assets or liabilities that the entity can access at the measurement date. | |
Level 2 : | The fair values are based on inputs other than quoted prices included within Level 1 that are observable for the asset or liability, either directly or indirectly. | |
Level 3 : | The fair values are based on unobservable inputs for the asset or liability. |
The fair value measurement is categorized in its entirety in the same level of the fair value hierarchy as the lowest level input that is significant to the entire measurement. If an observable input requires an adjustment using an unobservable input and that adjustment results in a significantly higher or lower fair value measurement, the resulting measurement would be categorized within Level 3 of the fair value hierarchy.
5.1.2.1 Fair value hierarchy of financial assets and liabilities at fair value in the statements of financial position
Fair value hierarchy of financial assets at fair value in the statements of financial position as of March 31, 2024 and December 31, 2023, are as follows:
March 31, 2024 | ||||||||||||||||
Fair value hierarchy | ||||||||||||||||
(In millions of Korean won) | Level 1 | Level 2 | Level 3 | Total | ||||||||||||
Financial assets | ||||||||||||||||
Financial assets at fair value through profit or loss: | ||||||||||||||||
Hybrid securities | ||||||||||||||||
Loans | — | 49,753 | — | 49,753 | ||||||||||||
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December 31, 2023 | ||||||||||||||||
Fair value hierarchy | ||||||||||||||||
(In millions of Korean won) | Level 1 | Level 2 | Level 3 | Total | ||||||||||||
Financial assets | ||||||||||||||||
Financial assets at fair value through profit or loss: | ||||||||||||||||
Hybrid securities | ||||||||||||||||
Beneficiary certificates | — | 316,080 | — | 316,080 | ||||||||||||
Loans | — | 48,981 | — | 48,981 | ||||||||||||
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21
Table of Contents
KB Financial Group Inc.
Notes to the Separate Interim Financial Statements
March 31, 2024 and 2023 (Unaudited), and December 31, 2023
5.1.2.1 Fair value hierarchy of financial assets and liabilities at fair value in the statements of financial position (cont’d)
Valuation techniques and inputs of financial assets and liabilities classified as Level 2 and measured at fair value in the statements of financial position as of March 31, 2024 and December 31, 2023, are as follows:
March 31, 2024 | ||||||||||||
(In millions of Korean won) | Fair value | Valuation techniques | Inputs | |||||||||
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Financial assets at fair value through profit or loss: | ||||||||||||
Loans | DCF model | | Interest rate, Discount rate, etc. |
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(In millions of Korean won) | Fair value | Valuation techniques | Inputs | |||||||||
Financial assets | ||||||||||||
Financial assets at fair value through profit or loss: | ||||||||||||
Beneficiary certificates | DCF model | | Interest rate, Discount rate, etc. |
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Loans | 48,981 | DCF model | | Interest rate, Discount rate, etc. |
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5.1.2.2 Fair value hierarchy of financial assets and liabilities whose fair value is disclosed
Fair value hierarchy of financial assets and liabilities whose fair value is disclosed as of March 31, 2024 and December 31, 2023, are as follows:
March 31, 2024 | ||||||||||||||||
Fair value hierarchy | ||||||||||||||||
(In millions of Korean won) | Level 1 | Level 2 | Level 3 | Total | ||||||||||||
Financial assets | ||||||||||||||||
Cash and due from financial institutions 1 | ||||||||||||||||
Loans measured at amortized cost 2 | — | — | 643,195 | 643,195 | ||||||||||||
Other financial assets 3 | — | — | 462,889 | 462,889 | ||||||||||||
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Borrowings 4 | ||||||||||||||||
Debentures | — | 3,135,782 | — | 3,135,782 | ||||||||||||
Other financial liabilities 3 | — | — | 615,122 | 615,122 | ||||||||||||
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22
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KB Financial Group Inc.
Notes to the Separate Interim Financial Statements
March 31, 2024 and 2023 (Unaudited), and December 31, 2023
5.1.2.2 Fair value hierarchy of financial assets and liabilities whose fair value is disclosed (cont’d)
December 31, 2023 | ||||||||||||||||
Fair value hierarchy | ||||||||||||||||
(In millions of Korean won) | Level 1 | Level 2 | Level 3 | Total | ||||||||||||
Financial assets | ||||||||||||||||
Cash and due from financial institutions 1 | ||||||||||||||||
Loans measured at amortized cost 2 | — | — | 608,286 | 608,286 | ||||||||||||
Other financial assets 3 | — | — | 57,562 | 57,562 | ||||||||||||
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Financial liabilities | ||||||||||||||||
Borrowings 4 | ||||||||||||||||
Debentures | — | 3,715,939 | — | 3,715,939 | ||||||||||||
Other financial liabilities 3 | — | — | 10,381 | 10,381 | ||||||||||||
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1 | Because due from financial institutions classified as level 2 are deposits on demand and with remaining maturities of less than one year, carrying amounts are reasonable approximations of fair values. |
2 | Because loans measured at amortized cost classified as level 3 are loans with residual maturity of less than one year, carrying amounts are reasonable approximations of fair values. |
3 | For other financial assets and other financial liabilities classified as level 3, carrying amounts are reasonable approximations of fair values. |
4 | For borrowings classified as level 2, carrying amount is reasonable approximations of fair value. |
Financial assets and liabilities whose carrying amount is a reasonable approximation of fair value, valuation techniques and inputs are not disclosed.
Valuation techniques and inputs of financial assets and liabilities classified as Level 2, and whose fair value is disclosed as of March 31, 2024 and December 31, 2023, are as follows:
Fair value | Valuation techniques | Inputs | ||||||||||||||
(In millions of Korean won) | March 31, 2024 | December 31, 2023 | ||||||||||||||
Financial liabilities | ||||||||||||||||
Debentures | | DCF model | | | Discount rate | |
5.2 Disclosure of Fair Value Hierarchy Level 3
5.2.1 Valuation policy and process of Level 3 fair value
The Company uses external, independent and qualified valuation service to determine the fair value of financial instruments at the end of every reporting period.
23
Table of Contents
KB Financial Group Inc.
Notes to the Separate Interim Financial Statements
March 31, 2024 and 2023 (Unaudited), and December 31, 2023
5.2.2 Changes in fair value (Level 3) measured using valuation technique based on unobservable inputs in the market
5.2.2.1 Changes in financial instruments classified as Level 3 of the fair value hierarchy for the three-month periods ended March 31, 2024 and 2023, are as follows:
2024 | 2023 | |||||||
(In millions of Korean won) | Financial assets at fair value through profit or loss | Financial assets at fair value through profit or loss | ||||||
Beginning | ||||||||
Total gains or losses: | ||||||||
- Profit or loss | 1,497 | 27,660 | ||||||
- Other comprehensive income | — | — | ||||||
Purchases | — | — | ||||||
Sales | — | — | ||||||
Issues | — | — | ||||||
Settlements | — | — | ||||||
Transfers into Level 3 | — | — | ||||||
Transfers out of Level 3 | — | — | ||||||
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5.2.2.2 In relation to changes in financial instruments classified as Level 3 of the fair value hierarchy, total gains or losses recognized in profit or loss for the period, and total gains or losses recognized in profit or loss from financial instruments held at the end of the reporting period for the three-month periods ended March 31, 2024 and 2023, are as follows:
2024 | 2023 | |||||||||||||||||||||||
(In millions of Korean won) | Gains on financial instruments at fair value through profit or loss | Other operating income | Net interest income | Losses on financial instruments at fair value through profit or loss | Other operating income | Net interest income | ||||||||||||||||||
Total gains (losses) included in profit or loss for the period | ||||||||||||||||||||||||
Total gains (losses) for the period included in profit or loss for financial instruments held at the end of the reporting period | 1,497 | — | — | 27,660 | — | — |
24
Table of Contents
KB Financial Group Inc.
Notes to the Separate Interim Financial Statements
March 31, 2024 and 2023 (Unaudited), and December 31, 2023
5.2.3 Sensitivity analysis of changes in unobservable inputs
5.2.3.1 Information about fair value measurements using unobservable inputs as of March 31, 2024 and December 31, 2023, are as follows:
March 31, 2024 | ||||||||||||||||||||||
(In millions of Korean won) | Fair value | Valuation techniques | Inputs | Unobservable inputs | Range of unobservable inputs (%) | Relationship of | ||||||||||||||||
Financial assets |
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Financial assets at fair value through profit or loss: | ||||||||||||||||||||||
Hybrid securities | | Hull and White Model, MonteCarlo Simulation | | | Matrix YTM, Additional spread by grade, Risk spread of company, Valid credit rating, Disclosed information of securities, Estimated volatility of Interest rate | | | Discount rate | | 4.89 ~ 6.59 | The lower the discount rate, the higher the fair value | |||||||||||
| Volatility of interest rate | | 0.55 | The higher the volatility, the higher the fair value fluctuation |
December 31, 2023 | ||||||||||||||||||||||
(In millions of Korean won) | Fair value | Valuation techniques | Inputs | Unobservable inputs | Range of unobservable inputs (%) | Relationship of | ||||||||||||||||
Financial assets |
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Financial assets at fair value through profit or loss: | ||||||||||||||||||||||
Hybrid securities | | Hull and White Model, MonteCarlo Simulation | | | Matrix YTM, Additional spread by grade, Risk spread of company, Valid credit rating, Disclosed information of securities, Estimated volatility of Interest rate | | | Discount rate | | 5.05 ~ 6.30 | The lower the discount rate, the higher the fair value | |||||||||||
| Volatility of interest rate | | 0.61 | The higher the volatility, the higher the fair value fluctuation |
25
Table of Contents
KB Financial Group Inc.
Notes to the Separate Interim Financial Statements
March 31, 2024 and 2023 (Unaudited), and December 31, 2023
5.2.3.2 Sensitivity analysis of changes in unobservable inputs
Sensitivity analysis of financial instruments is performed to measure favorable and unfavorable changes in fair value of financial instruments which are affected by unobservable parameters, using a statistical technique. When the fair value is affected by more than one input parameter, the amounts represent the most favorable or most unfavorable outcome. There are hybrid securities whose fair value changes are recognized in profit or loss.
Results of the sensitivity analysis of changes in unobservable inputs as of March 31, 2024 and December 31, 2023, are as follows:
March 31, 2024 | ||||||||||||||||
Profit or loss | Other comprehensive income or loss | |||||||||||||||
(In millions of Korean won) | Favorable changes | Unfavorable changes | Favorable changes | Unfavorable changes | ||||||||||||
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Financial assets | ||||||||||||||||
Financial assets at fair value through profit or loss: |
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Hybrid securities * |
* | The changes in fair value are calculated by increasing or decreasing discount rates (4.89% ~ 6.59%) by 1%p, which are principal unobservable input parameters. |
December 31, 2023 | ||||||||||||||||
Profit or loss | Other comprehensive income or loss | |||||||||||||||
(In millions of Korean won) | Favorable changes | Unfavorable changes | Favorable changes | Unfavorable changes | ||||||||||||
Financial assets | ||||||||||||||||
Financial assets at fair value through profit or loss: |
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Hybrid securities * |
* | The changes in fair value are calculated by increasing or decreasing discount rates (5.05% ~ 6.30%) by 1%p, which are principal unobservable input parameters. |
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Table of Contents
KB Financial Group Inc.
Notes to the Separate Interim Financial Statements
March 31, 2024 and 2023 (Unaudited), and December 31, 2023
6. Due from Financial Institutions
6.1 Details of due from financial institutions as of March 31, 2024 and December 31, 2023, are as follows:
(In millions of Korean won) | Financial Institution | Interest rate (%) as of March 31, 2024 | March 31, 2024 | December 31, 2023 | ||||||||||||||||
Due from financial institutions in Korean won | | Due from banks | | | Kookmin Bank | | 0.00 ~ 1.20 | |||||||||||||
| KB Savings Bank Co., Ltd. | | 2.50 ~ 3.90 | 140,000 | 140,000 | |||||||||||||||
| Standard Chartered Bank | | 3.15 | 9,872 | 2,001 | |||||||||||||||
| Shinhan Bank | | 3.5 | 247,946 | — | |||||||||||||||
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6.2 Details of restricted due from financial institution as of March 31, 2024 and December 31, 2023, are as follows:
(In millions of Korean won) | Financial Institution | March 31, 2024 | December 31, 2023 | Reasons of restriction | ||||||||
Due from financial institutions in Korean won | Kookmin Bank | Pledged as collateral for the overdraft account |
7. Financial Assets at Fair Value through Profit or Loss
Details of financial assets at fair value through profit or loss as of March 31, 2024 and December 31, 2023, are as follows:
(In millions of Korean won) | March 31, 2024 | December 31, 2023 | ||||||
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Financial assets at fair value through profit or loss: |
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Hybrid securities | ||||||||
Beneficiary certificates | — | 316,080 | ||||||
Loans | 49,753 | 48,981 | ||||||
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Table of Contents
KB Financial Group Inc.
Notes to the Separate Interim Financial Statements
March 31, 2024 and 2023 (Unaudited), and December 31, 2023
8. Loans Measured at Amortized Cost
Details of loans measured at amortized cost as of March 31, 2024 and December 31, 2023, are as follows:
(In millions of Korean won) | March 31, 2024 | December 31, 2023 | ||||||
Loans measured at amortized cost | ||||||||
Less: Allowances for loan losses | (1,805 | ) | (1,714 | ) | ||||
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9. Investments in Subsidiaries
9.1 Details of subsidiaries as of March 31, 2024, are as follows:
Name of subsidiaries | Industry | Location | ||
Kookmin Bank | Banking and foreign exchange transaction | Korea | ||
KB Securities Co., Ltd. | Financial investment | Korea | ||
KB Insurance Co., Ltd. | Non-life insurance | Korea | ||
KB Kookmin Card Co., Ltd. | Credit card and installment financial business | Korea | ||
KB Life Insurance Co., Ltd. | Life insurance | Korea | ||
KB Asset Management Co., Ltd. | Investment advisory and investment trust | Korea | ||
KB Capital Co., Ltd. | Financial leasing | Korea | ||
KB Real Estate Trust Co., Ltd. | Real estate trust management | Korea | ||
KB Savings Bank Co., Ltd. | Savings banking | Korea | ||
KB Investment Co., Ltd. | Capital investment | Korea | ||
KB Data System Co., Ltd. | System software, development and supply | Korea |
9.2 Details of investments in subsidiaries as of March 31, 2024 and December 31, 2023, are as follows:
(In millions of Korean won, except for shares) | As of March 31, 2024 | Carrying amount | ||||||||||||||
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Name of subsidiaries | Number of issued shares | Ownership (%) | March 31, 2024 | December 31, 2023 | ||||||||||||
Kookmin Bank | 404,379,116 | 100.00 | ||||||||||||||
KB Securities Co., Ltd. | 298,620,424 | 100.00 | 3,342,391 | 3,342,391 | ||||||||||||
KB Insurance Co., Ltd. | 66,500,000 | 100.00 | 2,375,430 | 2,375,430 | ||||||||||||
KB Kookmin Card Co., Ltd. | 92,000,000 | 100.00 | 1,953,175 | 1,953,175 | ||||||||||||
KB Life Insurance Co., Ltd. | 16,201,518 | 100.00 | 2,795,367 | 2,795,367 | ||||||||||||
KB Asset Management Co., Ltd. | 7,667,550 | 100.00 | 96,312 | 96,312 | ||||||||||||
KB Capital Co., Ltd. | 32,175,147 | 100.00 | 873,811 | 873,811 | ||||||||||||
KB Real Estate Trust Co., Ltd. | 16,000,000 | 100.00 | 121,553 | 121,553 | ||||||||||||
KB Savings Bank Co., Ltd. | 8,001,912 | 100.00 | 176,813 | 176,813 | ||||||||||||
KB Investment Co., Ltd. | 22,525,328 | 100.00 | 154,910 | 154,910 | ||||||||||||
KB Data System Co., Ltd. | 800,000 | 100.00 | 6,334 | 6,334 | ||||||||||||
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Table of Contents
KB Financial Group Inc.
Notes to the Separate Interim Financial Statements
March 31, 2024 and 2023 (Unaudited), and December 31, 2023
10. Deferred Income Tax Assets and Liabilities
Details of deferred income tax assets and liabilities as of March 31, 2024 and December 31, 2023, are as follows:
March 31, 2024 | ||||||||||||
(In millions of Korean won) | Assets | Liabilities | Net amount | |||||||||
Share-based payments | ||||||||||||
Membership rights | 227 | — | 227 | |||||||||
Defined benefit obligation | 1,800 | — | 1,800 | |||||||||
Plan assets | — | (2,890 | ) | (2,890 | ) | |||||||
Short-term employee benefits | 717 | — | 717 | |||||||||
Losses on valuation of financial assets at fair value through profit or loss | 4,524 | — | 4,524 | |||||||||
Others | 1,600 | (2,405 | ) | (805 | ) | |||||||
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13,168 | (5,295 | ) | 7,873 | |||||||||
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Offsetting of deferred tax assets and liabilities | (5,295 | ) | 5,295 | — | ||||||||
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December 31, 2023 | ||||||||||||
(In millions of Korean won) | Assets | Liabilities | Net amount | |||||||||
Share-based payments | ||||||||||||
Membership rights | 227 | — | 227 | |||||||||
Defined benefit obligation | 2,369 | — | 2,369 | |||||||||
Plan assets | — | (2,369 | ) | (2,369 | ) | |||||||
Short-term employee benefits | 403 | — | 403 | |||||||||
Losses on valuation of financial assets at fair value through profit or loss | 675 | — | 675 | |||||||||
Others | 2,159 | (3,676 | ) | (1,517 | ) | |||||||
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10,537 | (6,045 | ) | 4,492 | |||||||||
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Offsetting of deferred tax assets and liabilities | (6,045 | ) | 6,045 | — | ||||||||
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KB Financial Group Inc.
Notes to the Separate Interim Financial Statements
March 31, 2024 and 2023 (Unaudited), and December 31, 2023
11. Borrowings
11.1 Details of borrowings as of March 31, 2024 and December 31, 2023, are as follows:
(In millions of Korean won) | March 31, 2024 | December 31, 2023 | ||||||
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Borrowings |
11.2 Details of borrowings as of March 31, 2024 and December 31, 2023, are as follows:
(In millions of Korean won) | Lenders | Borrowing | Maturity | Interest rate (%) as of March 31, 2024 | March 31, 2024 | December 31, 2023 | ||||||||||||||
Borrowings in Korean won | Other borrowings | HI INVESTMENT & SECURITIES co., Ltd. | Jul. 21, 2023 | Jul. 19, 2024 | 4.15 | |||||||||||||||
Other borrowings | KIWOOM SECURITIES co., Ltd. | Feb. 20, 2024 | Feb. 18, 2025 | 3.81 | 200,000 | — | ||||||||||||||
Other borrowings | Hanyang SECURITIES co., Ltd. | Feb. 21, 2024 | Feb. 19, 2025 | 3.81 | 65,000 | — | ||||||||||||||
Other borrowings | SK SECURITIES co., Ltd. | Mar. 21, 2024 | Mar. 20, 2025 | 3.80 | 100,000 | — | ||||||||||||||
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11.3 Maturities of borrowings as of March 31, 2024 are as follows:
March 31, 2024 | ||||||||||||||||||||||||
(In millions of Korean won) | Up to 3 months | 3~6 months | 6~12 months | 1~3 years | Over 3 years | Total | ||||||||||||||||||
Borrowings in Korean won |
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Table of Contents
KB Financial Group Inc.
Notes to the Separate Interim Financial Statements
March 31, 2024 and 2023 (Unaudited), and December 31, 2023
12. Debentures
12.1 Details of debentures as of March 31, 2024 and December 31, 2023, are as follows:
(In millions of Korean won) | Issuance date | Maturity date | Interest rate (%) as of March 31, 2024 | March 31, 2024 | December 31, 2023 | |||||||||||
Unguaranteed debentures No.15-3 | May 12, 2016 | May 12, 2026 | 2.01 | |||||||||||||
Unguaranteed debentures No.18-3 | Jul. 25, 2016 | Jul. 25, 2026 | 1.69 | 80,000 | 80,000 | |||||||||||
Unguaranteed debentures No.19-3 | Aug. 25, 2016 | Aug. 25, 2026 | 1.69 | 120,000 | 120,000 | |||||||||||
Unguaranteed debentures No.25-4 | May 24, 2017 | May 24, 2027 | 2.62 | 80,000 | 80,000 | |||||||||||
Unguaranteed debentures No.26-2 | Jun. 27, 2017 | Jun. 27, 2024 | 2.34 | 200,000 | 200,000 | |||||||||||
Unguaranteed debentures No.27 | Jul. 19, 2017 | Jul. 19, 2024 | 2.41 | 100,000 | 100,000 | |||||||||||
Unguaranteed debentures No.28-2 | Aug. 30, 2017 | Aug. 30, 2024 | 2.43 | 30,000 | 30,000 | |||||||||||
Unguaranteed debentures No.28-3 | Aug. 30, 2017 | Aug. 30, 2027 | 2.60 | 60,000 | 60,000 | |||||||||||
Unguaranteed debentures No.29-2 | Sep. 19, 2017 | Sep. 19, 2024 | 2.44 | 110,000 | 110,000 | |||||||||||
Unguaranteed debentures No.31-3 | Feb. 28, 2018 | Feb. 28, 2028 | 3.02 | 60,000 | 60,000 | |||||||||||
Unguaranteed debentures No.32-3 | Apr. 6, 2018 | Apr. 6, 2028 | 2.86 | 20,000 | 20,000 | |||||||||||
Unguaranteed debentures No.33-2 | Jun. 12, 2018 | Jun. 12, 2028 | 2.92 | 30,000 | 30,000 | |||||||||||
Unguaranteed debentures No.34-3 | Jul. 25, 2018 | Jul. 25, 2025 | 2.71 | 20,000 | 20,000 | |||||||||||
Unguaranteed debentures No.34-4 | Jul. 25, 2018 | Jul. 25, 2028 | 2.76 | 20,000 | 20,000 | |||||||||||
Unguaranteed debentures No.36-2 | Feb. 22, 2019 | Feb. 22, 2024 | 2.11 | — | 230,000 | |||||||||||
Unguaranteed debentures No.36-3 | Feb. 22, 2019 | Feb. 22, 2029 | 2.22 | 60,000 | 60,000 | |||||||||||
Unguaranteed debentures No.37-1 | Mar. 15, 2019 | Mar. 15, 2024 | 2.06 | — | 140,000 | |||||||||||
Unguaranteed debentures No.37-2 | Mar. 15, 2019 | Mar. 15, 2029 | 2.16 | 70,000 | 70,000 | |||||||||||
Unguaranteed debentures No.38-1 | Jun. 19, 2019 | Jun. 19, 2026 | 1.73 | 80,000 | 80,000 | |||||||||||
Unguaranteed debentures No.38-2 | Jun. 19, 2019 | Jun. 19, 2029 | 1.77 | 120,000 | 120,000 | |||||||||||
Unguaranteed debentures No.39-1 | Oct. 15, 2019 | Oct. 15, 2024 | 1.60 | 80,000 | 80,000 | |||||||||||
Unguaranteed debentures No.39-2 | Oct. 15, 2019 | Oct. 15, 2029 | 1.67 | 40,000 | 40,000 | |||||||||||
Unguaranteed debentures No.40-1 | Dec. 4, 2019 | Dec. 4, 2024 | 1.76 | 70,000 | 70,000 | |||||||||||
Unguaranteed debentures No.40-2 | Dec. 4, 2019 | Dec. 4, 2029 | 1.87 | 30,000 | 30,000 | |||||||||||
Unguaranteed debentures No.41-2 | Jan. 16, 2020 | Jan. 16, 2025 | 1.74 | 100,000 | 100,000 | |||||||||||
Unguaranteed debentures No.41-3 | Jan. 16, 2020 | Jan. 16, 2030 | 1.88 | 40,000 | 40,000 | |||||||||||
Subordinated debentures No.1-1 | Feb. 18, 2020 | Feb. 18, 2030 | 2.21 | 370,000 | 370,000 | |||||||||||
Subordinated debentures No.1-2 | Feb. 18, 2020 | Feb. 18, 2035 | 2.26 | 30,000 | 30,000 | |||||||||||
Unguaranteed debentures No.42-1 | May 13, 2020 | May 13, 2025 | 1.59 | 130,000 | 130,000 | |||||||||||
Unguaranteed debentures No.42-2 | May 13, 2020 | May 13, 2030 | 1.78 | 70,000 | 70,000 | |||||||||||
Unguaranteed debentures No.43-2 | Jun. 16, 2020 | Jun. 16, 2025 | 1.44 | 110,000 | 110,000 | |||||||||||
Unguaranteed debentures No.43-3 | Jun. 16, 2020 | Jun. 16, 2030 | 1.63 | 50,000 | 50,000 | |||||||||||
Exchangeable bonds No.1 * | Jun. 30, 2020 | Jun. 30, 2025 | — | — | 240,000 | |||||||||||
Unguaranteed debentures No.44-3 | Aug. 11, 2020 | Aug. 9, 2024 | 1.18 | 30,000 | 30,000 | |||||||||||
Unguaranteed debentures No.44-4 | Aug. 11, 2020 | Aug. 11, 2027 | 1.39 | 20,000 | 20,000 | |||||||||||
Unguaranteed debentures No.46-2 | Jan. 14, 2021 | Jan. 14, 2026 | 1.43 | 30,000 | 30,000 | |||||||||||
Unguaranteed debentures No.46-3 | Jan. 14, 2021 | Jan. 14, 2028 | 1.62 | 10,000 | 10,000 | |||||||||||
Unguaranteed debentures No.46-4 | Jan. 14, 2021 | Jan. 14, 2031 | 1.84 | 100,000 | 100,000 | |||||||||||
Unguaranteed debentures No.48-1 | Jun. 16, 2022 | Jun. 17, 2024 | 4.15 | 85,000 | 85,000 | |||||||||||
Unguaranteed debentures No.48-2 | Jun. 16, 2022 | Jun. 16, 2025 | 4.27 | 240,000 | 240,000 | |||||||||||
Unguaranteed debentures No.48-3 | Jun. 16, 2022 | Jun. 16, 2027 | 4.34 | 80,000 | 80,000 | |||||||||||
Unguaranteed debentures No.48-4 | Jun. 16, 2022 | Jun. 16, 2032 | 4.40 | 95,000 | 95,000 | |||||||||||
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3,270,000 | 3,880,000 |
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Table of Contents
KB Financial Group Inc.
Notes to the Separate Interim Financial Statements
March 31, 2024 and 2023 (Unaudited), and December 31, 2023
12.1 Details of debentures as of March 31, 2024 and December 31, 2023, are as follows: (cont’d)
(In millions of Korean won) | Issuance date | Maturity date | Interest rate (%) as of March 31, 2024 | March 31, 2024 | December 31, 2023 | |||||||||||
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Less: Bond Discounts |
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Less: adjustment on exchange right |
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* | Fair value of the liability component of exchangeable bonds is calculated by using market interest rate of bonds under the same conditions without the exchange right. The residual amount, after deducting liability component from the issuance amount, represents the value of exchange right and is recorded in equity. Shares to be exchanged are 5 million treasury shares of KB Financial Group Inc. with the exchange price of |
12.2 Maturities of debentures as of March 31, 2024 and December 31, 2023, are as follows:
March 31, 2024 | ||||||||||||||||||||||||
(In millions of Korean won) | Up to 3 months | 3~6 months | 6~12 months | 1~3 years | Over 3 years | Total | ||||||||||||||||||
Debentures in Korean won |
December 31, 2023 | ||||||||||||||||||||||||
(In millions of Korean won) | Up to 3 months | 3~6 months | 6~12 months | 1~3 years | Over 3 years | Total | ||||||||||||||||||
Debentures in Korean won |
12.3 Changes in debentures based on par value for the three-month periods ended March 31, 2024 and 2023, are as follows:
2024 | ||||||||||||||||
(In millions of Korean won) | Beginning | Issue | Repayment | Ending | ||||||||||||
Debentures in Korean won |
2023 | ||||||||||||||||
(In millions of Korean won) | Beginning | Issue | Repayment | Ending | ||||||||||||
Debentures in Korean won |
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KB Financial Group Inc.
Notes to the Separate Interim Financial Statements
March 31, 2024 and 2023 (Unaudited), and December 31, 2023
13. Net Defined Benefit Liabilities (Assets)
13.1 Defined Benefit Plan
The Company operates defined benefit plans which have the following characteristics:
• | The Company has the obligation to pay the agreed benefits to all its current and former employees. |
• | The Company assumes actuarial risk (that benefits will cost more than expected) and investment risk. |
The net defined benefit liabilities recognized in the statements of financial position are calculated in accordance with actuarial valuation method using assumptions based on market data and historical data such as discount rate, future salary increase rate, and mortality. Actuarial assumptions may differ from actual results, due to changes in the market conditions, economic trends, and mortality trends.
13.2 Details of the net defined benefit liabilities as of March 31, 2024 and December 31, 2023, are as follows:
(In millions of Korean won) | March 31, 2024 | December 31, 2023 | ||||||
Present value of defined benefit obligation | ||||||||
Fair value of plan assets | (20,672 | ) | (23,333 | ) | ||||
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13.3 Details of post-employment benefits recognized in profit or loss for the three-month periods ended March 31, 2024 and 2023, are as follows:
(In millions of Korean won) | 2024 | 2023 | ||||||
Current service cost | ||||||||
Net interest expense(income) on net defined benefit liabilities | (39 | ) | (56 | ) | ||||
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(*) | The gains or losses related to the defined benefit pension plan is fully included in general administrative expenses. |
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Table of Contents
KB Financial Group Inc.
Notes to the Separate Interim Financial Statements
March 31, 2024 and 2023 (Unaudited), and December 31, 2023
14. Equity
14.1 Share Capital
14.1.1 Details of share capital as of March 31, 2024 and December 31, 2023, are as follows:
(In millions of Korean won) | March 31, 2024 | December 31, 2023 | ||||||
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Type of share | Ordinary share | Ordinary share | ||||||
Number of authorized shares | 1,000,000,000 | 1,000,000,000 | ||||||
Par value per share (In Korean won) | ||||||||
Number of issued shares | 403,511,072 | 403,511,072 | ||||||
Share capital * |
* | Due to the retirement of shares deducted through retained earnings, it is different from the total par value of the shares issued. |
14.1.2 Changes in shares for the three-month periods ended March 31, 2024 and 2023, are as follows:
(In number of shares) | 2024 | 2023 | ||||||||||
Beginning | 378,663,825 | 389,634,335 | ||||||||||
Increase | 5,000,000 | — | ||||||||||
Decrease | (900,000 | ) | (5,385,996 | ) | ||||||||
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Ending | 382,763,825 | 384,248,339 | ||||||||||
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KB Financial Group Inc.
Notes to the Separate Interim Financial Statements
March 31, 2024 and 2023 (Unaudited), and December 31, 2023
14.2 Hybrid Securities
Details of hybrid securities classified as equity as of March 31, 2024 and December 31, 2023, are as follows:
(In millions of Korean won)
Hybrid securities | Issuance date | Maturity | Interest rate (%) as of March 31, 2024 | March 31, 2024 | December 31, 2023 | |||||||||||||
The 1-1st * | May 2, 2019 | Perpetual bond | 3.23 | |||||||||||||||
The 1-2nd | May 2, 2019 | Perpetual bond | 3.44 | 49,881 | 49,881 | |||||||||||||
The 2-1st | May 8, 2020 | Perpetual bond | 3.30 | 324,099 | 324,099 | |||||||||||||
The 2-2nd | May 8, 2020 | Perpetual bond | 3.43 | 74,812 | 74,812 | |||||||||||||
The 3-1st | Jul. 14, 2020 | Perpetual bond | 3.17 | 369,099 | 369,099 | |||||||||||||
The 3-2nd | Jul. 14, 2020 | Perpetual bond | 3.38 | 29,922 | 29,922 | |||||||||||||
The 4-1st | Oct. 20, 2020 | Perpetual bond | 3.00 | 433,918 | 433,918 | |||||||||||||
The 4-2nd | Oct. 20, 2020 | Perpetual bond | 3.28 | 64,843 | 64,843 | |||||||||||||
The 5-1st | Feb. 19, 2021 | Perpetual bond | 2.67 | 419,056 | 419,056 | |||||||||||||
The 5-2nd | Feb. 19, 2021 | Perpetual bond | 2.87 | 59,862 | 59,862 | |||||||||||||
The 5-3rd | Feb. 19, 2021 | Perpetual bond | 3.28 | 119,727 | 119,727 | |||||||||||||
The 6-1st | May 28, 2021 | Perpetual bond | 3.20 | 165,563 | 165,563 | |||||||||||||
The 6-2nd | May 28, 2021 | Perpetual bond | 3.60 | 109,708 | 109,708 | |||||||||||||
The 7-1st | Oct. 8, 2021 | Perpetual bond | 3.57 | 208,453 | 208,453 | |||||||||||||
The 7-2nd | Oct. 8, 2021 | Perpetual bond | 3.80 | 59,834 | 59,834 | |||||||||||||
The 8-1st | Feb. 16, 2022 | Perpetual bond | 4.00 | 442,955 | 442,955 | |||||||||||||
The 8-2nd | Feb. 16, 2022 | Perpetual bond | 4.30 | 155,626 | 155,626 | |||||||||||||
The 9-1st | May 12, 2022 | Perpetual bond | 4.68 | 478,814 | 478,814 | |||||||||||||
The 9-2nd | May 12, 2022 | Perpetual bond | 4.97 | 19,906 | 19,906 | |||||||||||||
The 10-1st | Aug. 26, 2022 | Perpetual bond | 4.90 | 407,936 | 407,936 | |||||||||||||
The 10-2nd | Aug. 26, 2022 | Perpetual bond | 5.15 | 70,819 | 70,819 | |||||||||||||
The 10-3rd | Aug. 26, 2022 | Perpetual bond | 5.30 | 19,944 | 19,944 | |||||||||||||
The 11-1st | Feb 3, 2023 | Perpetual bond | 4.90 | 548,666 | 548,666 | |||||||||||||
The 11-2nd | Feb 3, 2023 | Perpetual bond | 5.03 | 49,871 | 49,871 | |||||||||||||
The 12 | Feb 28, 2024 | Perpetual bond | 4.39 | 399,045 | — | |||||||||||||
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* | As a result of exercising the call option for the Company’s write-down contingent convertible bonds on May 2, 2024, |
The above hybrid securities are early redeemable by the Company after 5 or 7or 10 years from the issuance date.
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KB Financial Group Inc.
Notes to the Separate Interim Financial Statements
March 31, 2024 and 2023 (Unaudited), and December 31, 2023
14.3 Capital Surplus
Details of capital surplus as of March 31, 2024 and December 31, 2023, are as follows:
(In millions of Korean won) | March 31, 2024 | December 31, 2023 | ||||||
Paid-in capital in excess of par value | ||||||||
Other capital surplus | 1,467,346 | 1,465,893 | ||||||
Gains on sales of treasury shares | 90,621 | 86,646 | ||||||
Consideration for exchange right of exchangeable bonds | — | 11,933 | ||||||
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14.4 Accumulated Other Comprehensive Income (Loss)
Details of accumulated other comprehensive income (loss) as of March 31, 2024 and December 31, 2023, are as follows:
(In millions of Korean won) | March 31, 2024 | December 31, 2023 | ||||||
Remeasurements of net defined benefit liabilities |
14.5 Retained Earnings
14.5.1 Details of retained earnings as of March 31, 2024 and December 31, 2023, are as follows:
(In millions of Korean won) | March 31, 2024 | December 31, 2023 | ||||||
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Legal reserves | ||||||||
Voluntary reserves | 982,000 | 982,000 | ||||||
Regulatory reserve for credit losses | 4,061 | 9,340 | ||||||
Unappropriated retained earnings | 3,718,571 | 2,337,872 | ||||||
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With respect to the allocation of net profit earned in a fiscal term, the Company must set aside in its legal reserve an amount equal to at least 10% of its profit after tax as reported in the financial statements, each time it pays dividends on its net profits earned until its legal reserve reaches the aggregate amount of its paid-in capital in accordance with Article 53 of the Financial Holding Company Act. The reserve is not available for the payment of cash dividends, but may be transferred to share capital, or used to reduce accumulated deficit.
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KB Financial Group Inc.
Notes to the Separate Interim Financial Statements
March 31, 2024 and 2023 (Unaudited), and December 31, 2023
14.5.2 Regulatory reserve for credit losses
Measurement and disclosure of regulatory reserve for credit losses are required in accordance with Articles 26 through 28 of the Regulations on Supervision of Financial Holding Companies.
14.5.2.1 Details of regulatory reserve for credit losses as of March 31, 2024 and December 31, 2023, are as follows:
(In millions of Korean won) | March 31, 2024 | December 31, 2023 | ||||||
Amounts before appropriation | ||||||||
Amounts estimated to be appropriated (reversed) | 2,663 | (5,279 | ) | |||||
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14.5.2.2 Regulatory reserve for credit losses estimated to be appropriated (reversed) and adjusted profit after provision (reversal) of regulatory reserve for credit losses for the three-month periods ended March 31, 2024 and 2023, are as follows:
(In millions of Korean won, except for per share amounts) | 2024 | 2023 | ||||||
Regulatory reserve for credit losses estimated to be appropriated (reversed) | ||||||||
Adjusted profit after provision (reversal) of regulatory reserve for credit losses 1,2 | 2,171,886 | 2,143,062 | ||||||
Adjusted basic earnings per share after provision (reversal) of regulatory reserve for credit losses 1 | 5,699 | 5,522 | ||||||
Adjusted diluted earnings per share after provision (reversal) of regulatory reserve for credit losses 1 | 5,605 | 5,396 |
1 | Adjusted profit after provision (reversal) of regulatory reserve for credit losses is not based on Korean IFRS. It is calculated by reflecting provision (reversal) of regulatory reserve for credit losses before tax to the net profit for the period. |
2 | After deducting dividends on hybrid securities |
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KB Financial Group Inc.
Notes to the Separate Interim Financial Statements
March 31, 2024 and 2023 (Unaudited), and December 31, 2023
14.6 Treasury Shares
Changes in treasury shares for the three-month periods ended March 31, 2024 and 2023, are as follows:
2024 | ||||||||||||||||||||
(In millions of Korean won and in number of shares) | Beginning | Acquisition | Disposal | Retirement | Ending | |||||||||||||||
Number of treasury shares * | 24,847,247 | 900,000 | (5,000,000 | ) | — | 20,747,247 | ||||||||||||||
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Carrying amount | ||||||||||||||||||||
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2023 | ||||||||||||||||
Beginning | Acquisition | Retirement | Ending | |||||||||||||
Number of treasury shares * | 19,262,733 | 5,385,996 | — | 24,648,729 | ||||||||||||
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Carrying amount | ||||||||||||||||
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* | 5 million treasury shares deposited at the Korea Securities Depository for the exchange of exchangeable bonds were disposed on February 14, 2024, due to the exercise of exchange right. |
In accordance with the resolution of the Board of Directors on July 25, 2023, the Company acquired 5,584,514 shares (W 300,000 million) and plans to retire of treasury stocks by July 31, 2024. In addition, The Company plans to acquireW 320,000 million of its own shares and retire the treasury shares by August 7, 2024 pursuant to board resolutions dated February 7, 2024.
15. Dividends
The annual dividends to the shareholders of the Parent Company for the year ended December 31, 2023 amounting toW 587,006 million (W 1,530 per share) were declared at the annual general shareholders’ meeting on March 22, 2024. The financial statements as of March 31, 2024 reflect this dividend payable. Meanwhile, the annual dividends to the shareholders of the Parent Company for the year ended December 31, 2022 and quarterly dividend paid in 2023 wereW 564,970 million (W 1,450 per share) andW 586,931 million (W 510 per share), respectively.
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KB Financial Group Inc.
Notes to the Separate Interim Financial Statements
March 31, 2024 and 2023 (Unaudited), and December 31, 2023
16. Net Interest Expense
Details of interest income, interest expense, and net interest expense for the three-month periods ended March 31, 2024 and 2023, are as follows:
(In millions of Korean won) | 2024 | 2023 | ||||||
Interest income | ||||||||
Due from financial institutions | ||||||||
Loans measured at amortized cost | 4,394 | 3,180 | ||||||
Loans measured at fair value through profit or loss | 702 | 1,119 | ||||||
Others | 1,275 | 135 | ||||||
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9,817 | 6,670 | |||||||
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Interest expense | ||||||||
Borrowings | 2,238 | — | ||||||
Debentures | 21,293 | 26,718 | ||||||
Others | 11 | 6 | ||||||
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23,542 | 26,724 | |||||||
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Net interest expense | ||||||||
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17. Net Fee and Commission Expense
Details of fee and commission income, fee and commission expense, and net fee and commission expense for the three-month periods ended March 31, 2024 and 2023, are as follows:
(In millions of Korean won) | 2024 | 2023 | ||||||
Fee and commission income | ||||||||
Fees earned in Korean won | ||||||||
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Fee and commission expense | ||||||||
Fees paid in Korean won | 1,337 | 1,459 | ||||||
Fees paid in foreign currency | 183 | 160 | ||||||
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1,520 | 1,619 | |||||||
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Net fee and commission expense | ||||||||
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KB Financial Group Inc.
Notes to the Separate Interim Financial Statements
March 31, 2024 and 2023 (Unaudited), and December 31, 2023
18. Net Gains or Losses on Financial Instruments at Fair value through Profit or Loss
Net gains or losses on financial instruments at fair value through profit or loss include dividend income, gains or losses arising from changes in fair value, and gains or losses arising from sales and redemptions. Details of net gains or losses on financial assets at fair value through profit or loss for the three-month periods ended March, 31, 2024 and 2023, are as follows:
(In millions of Korean won) | 2024 | 2023 | ||||||
Gains on financial instruments at fair value through profit or loss | ||||||||
Dividend income from financial assets at fair value through profit or loss | ||||||||
Gains on valuation of financial assets at fair value through profit or loss | 2,163 | 32,503 | ||||||
Gains on disposal of financial assets at fair value through profit or loss | 148 | 678 | ||||||
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15,895 | 45,428 | |||||||
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Losses on financial instruments at fair value through profit or loss | ||||||||
Losses on valuation of financial assets at fair value through profit or loss | 316 | — | ||||||
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316 | — | |||||||
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Net gains (losses) on financial instruments at fair value through profit or loss | ||||||||
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KB Financial Group Inc.
Notes to the Separate Interim Financial Statements
March 31, 2024 and 2023 (Unaudited), and December 31, 2023
19. Net Other Operating Income and Expenses
Details of other operating income and expenses for the three-month periods ended March 31, 2024 and 2023, are as follows:
(In millions of Korean won) | 2024 | 2023 | ||||||
Other operating income | ||||||||
Dividend income from subsidiaries | ||||||||
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2,243,250 | 2,192,380 | |||||||
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Net other operating income | ||||||||
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20. General and Administrative Expenses
20.1 Details of general and administrative expenses for the three-month periods ended March 31, 2024 and 2023, are as follows:
(In millions of Korean won) | 2024 | 2023 | ||||||
Expenses related to employee | ||||||||
Employee benefits—salaries | ||||||||
Employee benefits—others | 1,038 | 923 | ||||||
Post-employment benefits—defined benefit plans | 410 | 402 | ||||||
Post-employment benefits—defined contribution plans | 4 | 1 | ||||||
Share-based payments | 4,573 | 1,098 | ||||||
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14,755 | 12,246 | |||||||
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Depreciation and amortization | 1,526 | 1,446 | ||||||
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Other general and administrative expenses | ||||||||
Travel | 89 | 212 | ||||||
Communications | 263 | 327 | ||||||
Tax and dues | 229 | 239 | ||||||
Publication | 47 | 55 | ||||||
Rental expense | 419 | 521 | ||||||
Vehicle | 22 | 26 | ||||||
Service fees | 3,876 | 4,850 | ||||||
Advertising | 421 | 439 | ||||||
Training | 228 | 277 | ||||||
Others | 2,312 | 2,264 | ||||||
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7,906 | 9,210 | |||||||
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KB Financial Group Inc.
Notes to the Separate Interim Financial Statements
March 31, 2024 and 2023 (Unaudited), and December 31, 2023
20.2 Share-based Payments
Share-based payments plan for executives and employees of the Company and its subsidiaries as of March 31, 2024, are as follows:
20.2.1 Stock grants linked to long-term performance
(In number of shares) | Grant date | Number of granted shares 1 | Vesting conditions 2 | |||||
KB Financial Group Inc. | ||||||||
Series 34 | Jan. 1, 2022 | 654 | Services fulfillment, market performance 3 30%, and non-market performance 4 70% | |||||
Series 36 | Jan. 1, 2023 | 25,717 | Services fulfillment, market performance 3 0~30%, and non-market performance 4 70~100% | |||||
Series 37 | Apr. 1, 2023 | 2,087 | Services fulfillment, market performance 3 30%, and non-market performance 4 70% | |||||
Series 38 | Nov. 21, 2023 | 55,547 | Services fulfillment, market performance 3 35%, and non-market performance 4 65% | |||||
Series 39 | Jan. 1, 2024 | 93,783 | Services fulfillment, market performance 3 0~30%, and non-market performance 4 70~100% | |||||
Deferred grant in 2015 | 2,123 | Satisfied | ||||||
Deferred grant in 2020 | 284 | Satisfied | ||||||
Deferred grant in 2021 | 9,060 | Satisfied | ||||||
Deferred grant in 2022 | 26,240 | Satisfied | ||||||
Deferred grant in 2023 | 85,663 | Satisfied | ||||||
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301,158 | ||||||||
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Kookmin Bank | ||||||||
Series 85 | Jan. 1, 2022 | 6,740 | Services fulfillment, market performance 3 0~30%, and non-market performance 4 70~100% Services fulfillment, market performance 3 30%, and EPS & Asset Quality 5 70% | |||||
Series 86 | Feb. 1, 2022 | 1,525 | Services fulfillment, market performance 3 0~30%, and non-market performance 4 70~100% | |||||
Series 88 | Mar. 14, 2022 | 5,179 | Services fulfillment, market performance 3 0~30%, and non-market performance 4 70~100% | |||||
Series 90 | Jul. 18, 2022 | 3,716 | Services fulfillment, market performance 3 0~30%, and non-market performance 4 70~100% | |||||
Series 91 | Aug. 24, 2022 | 7,277 | Services fulfillment, market performance 3 0~30%, and non-market performance 4 70~100% | |||||
Series 92 | Jan. 1, 2023 | 150,035 | Services fulfillment, market performance 3 0~30%, and non-market performance 4 70~100% | |||||
Series 94 | Apr. 1, 2023 | 5,997 | Services fulfillment, market performance 3 0~30%, and non-market performance 4 70~100% | |||||
Series 96 | Jan. 1, 2024 | 367,067 | Services fulfillment, market performance 3 0~30%, and non-market performance 4 70~100% |
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KB Financial Group Inc.
Notes to the Separate Interim Financial Statements
March 31, 2024 and 2023 (Unaudited), and December 31, 2023
20.2.1 Stock grants linked to long-term performance (cont’d)
(In number of shares) | Grant date | Number of granted shares 1 | Vesting conditions 2 | |||||
Deferred grant in 2021 | 52,347 | Satisfied | ||||||
Deferred grant in 2022 | 58,485 | Satisfied | ||||||
Deferred grant in 2023 | 138,055 | Satisfied | ||||||
Deferred grant in 2024 | 1,902 | Satisfied | ||||||
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798,325 | ||||||||
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Other subsidiaries | ||||||||
Stock granted in 2012 | 160 | |||||||
Stock granted in 2013 | 219 | |||||||
Stock granted in 2014 | 1,028 | |||||||
Stock granted in 2015 | 1,287 | |||||||
Stock granted in 2016 | 234 | |||||||
Stock granted in 2017 | 5,834 | |||||||
Stock granted in 2018 | 14,316 | Services fulfillment, market performance 3 0~50%, and non-market performance 4 50~100% | ||||||
Stock granted in 2019 | 18,106 | |||||||
Stock granted in 2020 | 54,131 | |||||||
Stock granted in 2021 | 54,206 | |||||||
Stock granted in 2022 | 152,354 | |||||||
Stock granted in 2023 | 383,947 | |||||||
Stock granted in 2024 | 234,922 | |||||||
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920,744 | ||||||||
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2,020,227 | ||||||||
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1 | Granted shares represent the total number of shares initially granted to executives and employees who have residual shares as of March 31, 2024 (Deferred grants are residual shares vested as of March 31, 2024). |
2 | Executives and employees were given the right of choice about the timing of the deferred payment (after the date of retirement), payment ratio, and payment period. Accordingly, a certain percentage of the granted shares is deferred for up to five years after the date of retirement after the deferred grant has been confirmed. |
3 | Relative TSR (Total Shareholder Return): [(Fair value at the end of the contract—Fair value at the beginning of the contract) + (Total amount of dividend per share paid during the contract period)] / Fair value at the beginning of the contract |
4 | Performance results of company and employee |
5 | EPS, Asset Quality |
The stock grant linked to long-term performance is an incentive plan that sets, on grant date, the maximum number of shares that can be awarded. Actual shares to be granted is determined in accordance with achievement of pre-set performance targets over the vesting period.
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KB Financial Group Inc.
Notes to the Separate Interim Financial Statements
March 31, 2024 and 2023 (Unaudited), and December 31, 2023
20.2.2 Stock grants linked to short-term performance
(In number of shares) | Estimated number of vested shares * | Vesting conditions | ||||
KB Financial Group Inc. | ||||||
Stock granted in 2015 | 1,078 | Satisfied | ||||
Stock granted in 2016 | 2,076 | Satisfied | ||||
Stock granted in 2020 | 156 | Satisfied | ||||
Stock granted in 2021 | 11,857 | Satisfied | ||||
Stock granted in 2022 | 29,285 | Satisfied | ||||
Stock granted in 2023 | 41,923 | Satisfied | ||||
Stock granted in 2024 | 7,183 | Proportional to service period | ||||
Kookmin Bank | ||||||
Stock granted in 2016 | 706 | Satisfied | ||||
Stock granted in 2020 | 8,351 | Satisfied | ||||
Stock granted in 2021 | 53,465 | Satisfied | ||||
Stock granted in 2022 | 123,292 | Satisfied | ||||
Stock granted in 2023 | 118,637 | Satisfied | ||||
Stock granted in 2024 | 27,768 | Proportional to service period | ||||
Other subsidiaries | ||||||
Stock granted in 2015 | 2,672 | Satisfied | ||||
Stock granted in 2016 | 12,312 | Satisfied | ||||
Stock granted in 2017 | 27,164 | Satisfied | ||||
Stock granted in 2018 | 66,024 | Satisfied | ||||
Stock granted in 2019 | 69,405 | Satisfied | ||||
Stock granted in 2020 | 123,145 | Satisfied | ||||
Stock granted in 2021 | 346,018 | Satisfied | ||||
Stock granted in 2022 | 405,934 | Satisfied | ||||
Stock granted in 2023 | 616,556 | Satisfied | ||||
Stock granted in 2024 | 32,851 | Proportional to service period | ||||
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2,127,858 | ||||||
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* | Executives and employees were given the right of choice about the timing of the deferred payment (after the date of retirement), payment ratio, and payment period. Accordingly, a certain percentage of the granted shares is deferred for up to five years after the date of retirement after the deferred grant has been confirmed. |
Share-based payments arrangement for subsidiaries was transferred to the Company in 2010, and the related compensation cost paid to the executives and employees of subsidiaries is reimbursed by subsidiaries. The accrued expenses for share-based payments as of March 31, 2024 and December 31, 2023, areW 209,361 million andW 202,249 million, respectively, and the receivables to be reimbursed by subsidiaries for the compensation costs as of March 31, 2024 and December 31, 2023, areW 193,075 million andW 184,433 million, respectively. And compensation costs from share-based payments amounting toW 4,573 million andW 1,098 million were recognized for the three-month periods ended March 31, 2024 and 2023, respectively.
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KB Financial Group Inc.
Notes to the Separate Interim Financial Statements
March 31, 2024 and 2023 (Unaudited), and December 31, 2023
21. Income Tax Benefit (Expense)
Details of income tax benefit (expense) for the three-month periods ended March 31, 2024 and 2023, are as follows:
(In millions of Korean won) | 2024 | 2023 | ||||||
Income tax payable | ||||||||
Changes in deferred tax assets and liabilities | 3,381 | (10,697 | ) | |||||
Origination and reversal of temporary differences | 3,381 | (10,697 | ) | |||||
Income tax recognized directly in equity | 205 | 6 | ||||||
Remeasurements of net defined benefit liabilities | 17 | 6 | ||||||
Consideration for exchange right of exchangeable bonds | 188 | — | ||||||
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Income tax benefit (expense) | ||||||||
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Table of Contents
KB Financial Group Inc.
Notes to the Separate Interim Financial Statements
March 31, 2024 and 2023 (Unaudited), and December 31, 2023
22. Earnings per Share
22.1 Basic Earnings per Share
Basic earnings per share is calculated from the earnings attributable to ordinary shares.
22.1.1 Weighted average number of ordinary shares outstanding
(In number of shares) | March 31, 2024 | March 31, 2023 | ||||||
Number of issued ordinary shares | 403,511,072 | 408,897,068 | ||||||
Number of treasury shares * | (20,747,247 | ) | (24,648,729 | ) | ||||
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Weighted average number of ordinary shares outstanding | 381,106,133 | 388,114,802 |
* | Initial date of treasury shares that was deducted by the retirement is April 4, 2023. |
22.1.2 Basic earnings per share
(In Korean won and in number of shares) | 2024 | 2023 | ||||||
Profit for the period | ||||||||
Deduction: Dividends on hybrid securities | (48,070,325,000 | ) | (40,704,075,000 | ) | ||||
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Profit attributable to ordinary equity holders (A) | 2,174,548,198,505 | 2,142,222,927,717 | ||||||
Weighted average number of ordinary shares outstanding (B) | 381,106,133 | 388,114,802 | ||||||
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Basic earnings per share (A/B) | ||||||||
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22.2 Diluted Earnings per Share
Diluted earnings per share is calculated through increasing the weighted average number of ordinary shares outstanding by the weighted average number of additional ordinary shares that would have been outstanding assuming the conversion of all dilutive potential ordinary shares. The Company has dilutive potential ordinary shares such as stock grants and ordinary share exchange right of exchangeable bonds.
A calculation is done to determine the number of shares that could have been acquired at fair value (determined as the average market share price for the year) based on the monetary value of stock grants. The number of shares calculated above is compared with the number of shares that would have been issued assuming the settlement of stock grants.
Exchangeable bonds are included in potential ordinary shares from the exercisable date of the exchange right, and interest expense after tax for the period is added to profit for diluted earnings per share.
22.2.1 Adjusted profit for diluted earnings per share
(In Korean won) | 2024 | 2023 | ||||||
Profit attributable to the ordinary equity holders * | ||||||||
Adjustment: | ||||||||
Interest expense on exchangeable bonds | 306,631,690 | 604,566,012 | ||||||
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Adjusted profit for diluted earnings per share | ||||||||
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* | The amount is after deducting dividends on hybrid securities. |
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KB Financial Group Inc.
Notes to the Separate Interim Financial Statements
March 31, 2024 and 2023 (Unaudited), and December 31, 2023
22.2.2 Weighted average number of ordinary shares outstanding for diluted earnings per share
(In number of shares) | 2024 | 2023 | ||||||
Weighted average number of ordinary shares outstanding | 381,106,133 | 388,114,802 | ||||||
Adjustment: | ||||||||
Stock grants | 4,036,449 | 4,129,985 | ||||||
Exchangeable bonds | 2,417,582 | 5,000,000 | ||||||
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Adjusted weighted average number of ordinary shares outstanding for diluted earnings per share | 387,560,164 | 397,244,787 | ||||||
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22.2.3 Diluted earnings per share
(In Korean won and in number of shares) | 2024 | 2023 | ||||||
Adjusted profit for diluted earnings per share | ||||||||
Adjusted weighted average number of ordinary shares outstanding for diluted earnings per share | 387,560,164 | 397,244,787 | ||||||
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Diluted earnings per share | ||||||||
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Table of Contents
KB Financial Group Inc.
Notes to the Separate Interim Financial Statements
March 31, 2024 and 2023 (Unaudited), and December 31, 2023
23. Statement of Cash Flows
23.1 Details of cash and cash equivalents as of March 31, 2024 and December 31, 2023, are as follows:
(In millions of Korean won) | March 31, 2024 | December 31, 2023 | ||||||
Due from financial institutions | ||||||||
Deduction: | ||||||||
Restricted due from financial institutions | (3 | ) | (3 | ) | ||||
Due from financial institutions with original maturities over three months | (140,000 | ) | (140,000 | ) | ||||
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(140,003 | ) | (140,003 | ) | |||||
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23.2 Significant non-cash transactions for the three-month periods ended March 31, 2024 and 2023, are as follows:
(In millions of Korean won) | 2024 | 2023 | ||||||
Changes in receivables and payables from consolidated tax return | ||||||||
Changes in receivables and payables related to stock grants | 8,641 | (43,256 | ) | |||||
Changes in receivables related to subsidiary’s interim dividend | 399,974 | — | ||||||
Recognition of dividends payable due to appropriation of retained earnings | 587,006 | 564,970 | ||||||
Exchange of treasury shares through the exercise of exchange rights related to exchangeable bonds | 240,000 | — |
23.3 Cash inflows and outflows from income tax, interest, and dividends for the three-month periods ended March 31, 2024 and 2023, are as follows:
(In millions of Korean won) | Activity | 2024 | 2023 | |||||||||
Income tax paid | Operating | |||||||||||
Interest received | Operating | 6,391 | 4,332 | |||||||||
Interest paid | Operating | 35,178 | 26,434 | |||||||||
Dividends received | Operating | 1,856,884 | 2,206,801 | |||||||||
Dividends paid | Financing | 48,070 | 40,703 |
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KB Financial Group Inc.
Notes to the Separate Interim Financial Statements
March 31, 2024 and 2023 (Unaudited), and December 31, 2023
24. Contingent Liabilities and Commitments
24.1 Commitments made with financial institutions as of March 31, 2024 and December 31, 2023, are as follows:
(In millions of Korean won) | March 31, 2024 | December 31, 2023 | ||||||||||||||||
Amount of commitments | Amount borrowed | Amount of commitments | Amount borrowed | |||||||||||||||
General loan | Hana Bank | |||||||||||||||||
General loan | Shinhan Bank | 200,000 | — | 200,000 | — | |||||||||||||
General loan | NongHyup Bank | 300,000 | — | 300,000 | — |
24.2 Other Matters (including litigation)
The Company has 1 pending lawsuit as a defendant with aggregate claims amount ofW 0.1 million, which arose in the normal course of management activities, as of March 31, 2024.
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KB Financial Group Inc.
Notes to the Separate Interim Financial Statements
March 31, 2024 and 2023 (Unaudited), and December 31, 2023
25. Related Party Transactions
According to Korean IFRS No.1024, the Company includes subsidiaries and key management personnel (including family members) in the scope of related parties. The Company discloses balances (receivables and payables) and other amounts arising from transactions with related parties in the notes to the financial statements. Refer to Note 9 for details of subsidiaries. Key management personnel include the executives of the Company, their close family members, and the companies where the executives and/or their close family members have control or joint control.
25.1 Details of significant profit or loss arising from transactions with related parties for the three-month periods ended March 31, 2024 and 2023 are as follows:
(In millions of Korean won) | ||||||||||
Subsidiaries | Profit or loss | 2024 | 2023 | |||||||
Kookmin Bank | Interest income | |||||||||
Fee and commission income | 325 | 297 | ||||||||
Net other operating income 1 | 1,467,896 | 1,346,582 | ||||||||
General and administrative expenses | 2,641 | 2,687 | ||||||||
KB Securities Co., Ltd. | Fee and commission income | 23 | 20 | |||||||
Net gains on financial assets at fair value through profit or loss | 6,821 | 23,967 | ||||||||
Net other operating income 1 | 150,000 | 100,000 | ||||||||
General and administrative expenses | 166 | 103 | ||||||||
KB Insurance Co., Ltd. | Fee and commission income | 24 | 34 | |||||||
General and administrative expenses | 457 | 532 | ||||||||
Net other operating income 1 | 249,974 | 349,990 | ||||||||
KB Kookmin Card Co., Ltd. | Fee and commission income | 6 | 9 | |||||||
Net other operating income 1 | 185,380 | 200,008 | ||||||||
General and administrative expenses | 110 | 75 | ||||||||
Net non-operating income | 1 | 1 | ||||||||
KB Life Insurance Co., Ltd. | Fee and commission income | 9 | 11 | |||||||
Net other operating income 1 | 150,000 | 100,000 | ||||||||
General and administrative expenses | 327 | 67 | ||||||||
KB Asset Management Co., Ltd. | Net other operating income 1 | 40,000 | 60,000 | |||||||
General and administrative expenses | 16 | — | ||||||||
KB Capital Co., Ltd | Interest income | 1,232 | 1,184 | |||||||
Fee and commission income | 3 | 4 | ||||||||
Net gains on financial assets at fair value through profit or loss | 8,260 | 15,940 | ||||||||
General and administrative expenses | 35 | — | ||||||||
Provision for credit losses | 3 | 1 | ||||||||
KB Real Estate Trust. Co., Ltd. | Interest income | 662 | — | |||||||
Net other operating income 1 | — | 35,000 | ||||||||
Provision for credit losses | 93 | — |
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KB Financial Group Inc.
Notes to the Separate Interim Financial Statements
March 31, 2024 and 2023 (Unaudited), and December 31, 2023
25.1 Details of significant profit or loss arising from transactions with related parties for the three-month periods ended March 31, 2024 and 2023, are as follows: (cont’d)
(In millions of Korean won) | ||||||||||
Subsidiaries | Profit or loss | 2024 | 2023 | |||||||
KB Savings Bank Co., Ltd. | Interest income | |||||||||
Net gains (losses) on financial assets at fair value through profit or loss | 350 | 2,037 | ||||||||
KB Investment Co., Ltd. | Interest income | 2,386 | 1,916 | |||||||
Provision (reversal) for credit losses | (1 | ) | 1 | |||||||
KB Data Systems Co., Ltd. | General and administrative expenses | 735 | 692 | |||||||
Net other operating income 1 | — | 600 | ||||||||
Other related parties | Profit or loss | 2024 | 2023 | |||||||
KB Credit Information Co., Ltd 2 | Interest income | |||||||||
Net other operating income 1 | — | 200 |
1 | Net other operating income includes dividend income from subsidiaries. |
2 | The Company sold the 100% shares of KB Credit Information Co., Ltd. to Kookmin Card Co., Ltd. on June 30, 2023. |
25.2 Details of significant outstanding balances of receivables and payables arising from transactions with related parties as of March 31, 2024 and December 31, 2023, are as follows:
(In millions of Korean won) | ||||||||||
Subsidiaries | Assets or liabilities | March 31, 2024 | December 31, 2023 | |||||||
Kookmin Bank | Cash and due from financial institutions | |||||||||
Other assets | 320,444 | 308,475 | ||||||||
Other liabilities | 51,165 | 45 | ||||||||
Property and equipment | 1,300 | 1,055 | ||||||||
KB Securities Co., Ltd. | Financial assets at fair value through profit or loss | 523,383 | 523,188 | |||||||
Other assets | 142,926 | 92,212 | ||||||||
Other liabilities | 164 | 1 | ||||||||
KB Insurance Co., Ltd. | Other assets | 270,704 | 21,170 | |||||||
Other liabilities | 52,137 | 42,956 | ||||||||
KB Kookmin Card Co., Ltd. | Other assets | 92,311 | 56,852 | |||||||
Other liabilities | 620 | 730 | ||||||||
KB Life Insurance Co., Ltd. | Other assets | 160,616 | 9,552 | |||||||
Other liabilities | 149,643 | 132,548 | ||||||||
KB Asset Management Co., Ltd. | Other assets | 12,141 | 11,508 | |||||||
Other liabilities | 16 | — | ||||||||
KB Capital Co., Ltd. | Financial assets at fair value through profit or loss | 489,477 | 488,175 | |||||||
Loans measured at amortized cost (gross amount) | 200,000 | 200,000 | ||||||||
Allowances for credit losses | 522 | 522 | ||||||||
Other assets | 34,098 | 19,364 | ||||||||
Other liabilities | 40 | — |
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KB Financial Group Inc.
Notes to the Separate Interim Financial Statements
March 31, 2024 and 2023 (Unaudited), and December 31, 2023
25.2 Details of significant outstanding balances of receivables and payables arising from transactions with related parties as of March 31, 2024 and December 31, 2023, are as follows: (cont’d)
(In millions of Korean won) | ||||||||||
Subsidiaries | Assets or liabilities | March 31, 2024 | December 31, 2023 | |||||||
KB Real Estate Trust Co., Ltd. | Loans measured at amortized cost (gross amount) | |||||||||
Allowances for credit losses | 222 | 131 | ||||||||
Other assets | 4,227 | 3,949 | ||||||||
Other liabilities | 8,910 | 8,910 | ||||||||
KB Savings Bank Co., Ltd. | Cash and due from financial institutions | 140,000 | 140,000 | |||||||
Financial assets at fair value through profit or loss | 49,752 | 48,980 | ||||||||
Other assets | 5,582 | 4,729 | ||||||||
Other liabilities | 2,599 | 2,599 | ||||||||
KB Investment Co., Ltd. | Loans measured at amortized cost (gross amount) | 360,000 | 360,000 | |||||||
Allowances for credit losses | 1,061 | 1,061 | ||||||||
Other assets | 8,997 | 8,579 | ||||||||
KB Data Systems Co., Ltd. | Intangible assets | 351 | 331 | |||||||
Other assets | 2,034 | 1,972 | ||||||||
Other liabilities | 1,139 | 1,118 |
Other related parties | Assets or liabilities | March 31, 2024 | December 31, 2023 | |||||||
KB Credit Information Co., Ltd * | Other assets | |||||||||
Other liabilities | — | 94 |
* | The Company sold the 100% shares of KB Credit Information Co., Ltd. to Kookmin Card Co., Ltd. on June 30, 2023. |
25.3 Right-of-use assets and lease liabilities with related parties as of March 31, 2024 and December 31, 2023, are as follows:
(In millions of Korean won) | March 31, 2024 | December 31, 2023 | ||||||||||
Subsidiary | Kookmin Bank | Right-of-use assets |
25.4 Unused commitments provided from related parties as of March 31, 2024 and December 31, 2023, are as follows:
(In millions of Korean won) | March 31, 2024 | December 31, 2023 | ||||||||||
Subsidiary | KB Kookmin Card Co., Ltd. | Unused lines of credit for credit card |
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KB Financial Group Inc.
Notes to the Separate Interim Financial Statements
March 31, 2024 and 2023 (Unaudited), and December 31, 2023
25.5 There were no share transactions with related parties for the three-month periods ended March 31, 2024 and 2023.
25.6 Details of significant lending transactions with related parties for the three-month periods ended March 31, 2024 and 2023, are as follows:
(In millions of Korean won) | 2024 | |||||||||||||||||
Beginning | Loan | Collection | Ending | |||||||||||||||
Subsidiary | KB Investment Co., Ltd. | |||||||||||||||||
KB Capital Co., Ltd. | 200,000 | — | — | 200,000 | ||||||||||||||
KB Savings Bank Co., Ltd. * | 70,000 | — | — | 70,000 | ||||||||||||||
KB Real Estate Trust Co., Ltd. | 50,000 | 35,000 | — | 85,000 |
(In millions of Korean won) | 2023 | |||||||||||||||||
Beginning | Loan | Collection | Ending | |||||||||||||||
Subsidiary | KB Investment Co., Ltd. | |||||||||||||||||
KB Credit Information Co., Ltd. | 13,500 | — | — | 13,500 | ||||||||||||||
KB Capital Co., Ltd. | 200,000 | — | — | 200,000 | ||||||||||||||
KB Savings Bank Co., Ltd. * | 70,000 | — | — | 70,000 |
* | Par value of subordinated bond issued by KB Savings Bank Co., Ltd. The difference between par value and fair value at the acquisition date was accounted for as investments in subsidiaries. |
25.7 Details of compensation to key management personnel for the three-month periods ended March 31, 2024 and 2023, are as follows:
2024 | ||||||||||||||||
(In millions of Korean won) | Short-term employee benefits | Post- employment benefits | Share-based payments | Total | ||||||||||||
Registered directors (executive) | ||||||||||||||||
Registered directors (non-executive) | 184 | — | — | 184 | ||||||||||||
Non-registered directors | 1,121 | 16 | 3,452 | 4,589 | ||||||||||||
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(In millions of Korean won) | Short-term employee benefits | Post- employment benefits | Share-based payments | Total | ||||||||||||
Registered directors (executive) | ||||||||||||||||
Registered directors (non-executive) | 176 | — | — | 176 | ||||||||||||
Non-registered directors | 1,452 | 75 | 885 | 2,412 | ||||||||||||
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KB Financial Group Inc.
Notes to the Separate Interim Financial Statements
March 31, 2024 and 2023 (Unaudited), and December 31, 2023
26. Events after the reporting period
According to the resolution of the board of directors on April 25, 2024, the quarterly dividend per share ofW 784 (total dividend:W 300,087 million) with dividend record date of March 31, 2024 were paid on May 9, 2024. The Company’s financial statements as of March 31, 2024, do not reflect this dividend payable. As a result of exercising the call option for the Company’s write-down contingent convertible bonds on May 2, 2024,W 350,000 million was fully redeemed before maturity.
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