6-K 1 d748378d6k.htm FORM 6-K Form 6-K
Table of Contents

 

 

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

 

 

Form 6-K

 

 

REPORT OF FOREIGN PRIVATE ISSUER

PURSUANT TO RULE 13a-16 OR 15d-16 UNDER

THE SECURITIES EXCHANGE ACT OF 1934

For the month of May 2019

Commission File Number: 000-53445

 

 

KB Financial Group Inc.

(Translation of registrant’s name into English)

 

 

26, Gukjegeumyung-ro 8-gil, Yeongdeungpo-gu, Seoul 07331, Korea

(Address of principal executive office)

 

 

Indicate by check mark whether the registrant files or will file annual reports under cover of Form 20-F or Form 40-F.

Form 20-F  ☒            Form 40-F  ☐

Indicate by check mark if the registrant is submitting the Form 6-K in paper as permitted by Regulation S-T Rule 101(b)(1):  ☐

Note: Regulation S-T Rule 101(b)(1) only permits the submission in paper of a Form 6-K if submitted solely to provide an attached annual report to security holders.

Indicate by check mark if the registrant is submitting the Form 6-K in paper as permitted by Regulation S-T Rule 101(b)(7):  ☐

Note: Regulation S-T Rule 101(b)(7) only permits the submission in paper of a Form 6-K if submitted to furnish a report or other document that the registrant foreign private issuer must furnish and make public under the laws of the jurisdiction in which the registrant is incorporated, domiciled or legally organized (the registrant’s “home country”), or under the rules of the home country exchange on which the registrant’s securities are traded, as long as the report or other document is not a press release, is not required to be and has not been distributed to the registrant’s security holders, and, if discussing a material event, has already been the subject of a Form 6-K submission or other Commission filing on EDGAR.

 

 

 


Table of Contents

Index

1. Summary of the 2019 First Quarter Business Report

2. Exhibit 99.1 KB Financial Group Review Report for the First Quarter of 2019 (Consolidated)

3. Exhibit 99.2 KB Financial Group Review Report for the First Quarter of 2019 (Separate)

 

2


Table of Contents

TABLE OF CONTENTS

 

1.

   Introduction to the Company      5  

1.1.

   Business Purpose      5  

1.2.

   History      5  

1.3.

   Overview of the Business Group      8  

1.4.

   Capital Structure      10  

1.5.

   Dividends      10  

2.

   Business      11  

2.1.

   Results of Operations      11  

2.2.

   Sources and Uses of Funds      12  

2.3.

   Other Information to Consider in Making an Investment Decision      14  

3.

   Financial Information      17  

3.1.

   Consolidated Financial Information      17  

3.2.

   Separate Financial Information      20  

3.3.

   Other Selected Financial Data      22  

3.4.

   Other Financial Information      25  

4.

   Independent Public Accountants      26  

4.1.

   Audit/ Review Services      26  

4.2.

   Public Company Accounting Oversight Board (“PCAOB”) Audit Services      26  

5.

   Corporate Governance and Affiliated Companies      27  

5.1.

   Board of Directors & Committees under the Board      27  

5.2.

   Audit Committee      27  

5.3.

   Compensation to Directors      28  

5.4.

   Top 5 Highest-Paid Individuals      29  

5.5.

   Affiliated Companies      30  

6.

   Directors, Senior Management and Employees      31  

6.1.

   Executive Directors      31  

6.2.

   Non-standing Directors      31  

6.3.

   Non-executive Directors      31  

6.4.

   Senior Management      32  

6.5.

   Employees      33  

7.

   Major Shareholders and Related Party Transactions      34  

7.1.

   Major Shareholders      34  

7.2.

   Changes in the Largest Shareholder      34  

7.3.

   Employee Stock Ownership Association      35  

7.4.

   Investments in Affiliated Companies      36  

7.5.

   Related Party Transactions      37  

 

3


Table of Contents

Summary of 2019 First Quarter Business Report

On May 15, 2019, KB Financial Group Inc. (“KB Financial Group”) filed its business report for the first quarter of 2019 (the “Business Report”) with the Financial Services Commission of Korea and the Korea Exchange. This is a summary of the Business Report translated into English.

Except where indicated otherwise, financial information contained in this summary have been prepared in accordance with the Korean equivalent of International Financial Reporting Standards (“K-IFRS”), which differ in certain important respects from generally accepted accounting principles in the United States.

All references to “KB Financial Group,” “we,” “us” or the “Company” are to KB Financial Group and, unless the context requires otherwise, its subsidiaries. In addition, all references to “Won” or “KRW” in this document are to the currency of the Republic of Korea.

 

4


Table of Contents
1.

Introduction to the Company

 

1.1.

Business Purpose

KB Financial Group is a financial holding company that was established in September 2008. Its main business purpose is to hold shares in companies that are engaged in financial or related services, as well as govern and manage such companies. Its consolidated subsidiaries are primarily engaged in the banking business, as well as the credit card business, the financial investment business, the insurance business and other related businesses.

 

1.2.

History

 

   

September 26, 2008

Obtained final approval from the Financial Services Commission to establish a financial holding company

 

   

September 29, 2008

Establishment of the Company through a comprehensive stock transfer and listing on the New York Stock Exchange

 

   

October 10, 2008

Listing on the Korea Exchange

 

   

October 20, 2008

The largest shareholder of the Company changed from the Korean National Pension Service to ING Bank N.V.

 

   

October 31, 2008

The largest shareholder of the Company changed from ING Bank N.V. to the Korean National Pension Service

 

   

May 4, 2009

Added Kookmin Bank Cambodia PLC as a second-tier subsidiary

 

   

June 22, 2009

Added KB Life Insurance Co., Ltd. (“KB Life Insurance”), formerly a second-tier subsidiary, as a first-tier subsidiary

 

   

September 28, 2009

Added Burrill-KB Life Sciences Fund Ltd. as a second-tier subsidiary

 

   

December 1, 2009

Added KB-Glenwood Private Equity Fund No.1 as a second-tier subsidiary

 

   

January 22, 2010

The largest shareholder of the Company changed from the Korean National Pension Service to ING Bank N.V.

 

   

July 6, 2010

Added KBIC Private Equity Fund No. 3 as a second-tier subsidiary

 

5


Table of Contents
   

December 13, 2010

Added KoFC KBIC Frontier Champ 2010-5 PEF as a second-tier subsidiary

 

   

March 2, 2011

Added KB Kookmin Card Co., Ltd. (“KB Kookmin Card”) as a first-tier subsidiary

 

   

March 14, 2011

KB Futures Co., Ltd. was merged into KB Investment & Securities Co., Ltd. (“KB Investment & Securities”)

 

   

July 8, 2011

The largest shareholder of the Company changed from ING Bank N.V. to the Korean National Pension Service

 

   

November 12, 2011

Closed KB Investment & Securities Hong Kong Ltd.

 

   

January 13, 2012

Added KB Savings Bank Co., Ltd. (“KB Savings Bank”) as a first-tier subsidiary

 

   

May 11, 2012

Added KoFC POSCO HANWHA KB Shared Growth No. 2. Private Equity Fund as a second-tier subsidiary

 

   

June 8, 2012

Liquidated Burrill-KB Life Sciences Fund Ltd.

 

   

July 2, 2012

Added KoFC Value-up Private Equity Fund as a second-tier subsidiary

 

   

October 10, 2012

Added Kookmin Bank (China) Ltd. as a second-tier subsidiary

 

   

June 20, 2013

Acquired the remaining shares of KB Life Insurance, which increased the Company’s shareholding to 100%

 

   

September 2, 2013

Added Yehansoul Savings Bank as a first-tier subsidiary

 

   

January 13, 2014

Yehansoul Savings Bank was merged into KB Savings Bank

 

   

March 20, 2014

Added KB Capital Co., Ltd. (“KB Capital”) as a first-tier subsidiary

 

   

July 2, 2014

Added Korea GCC Global Cooperation Private Equity Fund as a second-tier subsidiary

 

   

June 24, 2015

Added KB Insurance Co., Ltd. (“KB Insurance”) as a non-consolidated first-tier subsidiary.

 

   

November 23, 2015

Acquired additional shares of KB Insurance, which increased the Company’s shareholding from 19.47% to 33.29%.

 

   

May 31, 2016

Added Hyundai Securities Co., Ltd. (“Hyundai Securities”) as a non-consolidated first-tier subsidiary

 

6


Table of Contents
   

June 21, 2016

Disposed of LIG Investment & Securities, Co., Ltd., a second-tier subsidiary

 

   

June 28, 2016

Acquired treasury shares of Hyundai Securities, which increased the Company’s equity ownership in Hyundai Securities from 22.56% to 29.62%

 

   

September 9, 2016

Liquidated NPS-KBIC No. 1 Private Equity Fund

 

   

November 29, 2016

Established KB Golden Life Care Co., Ltd. as a second-tier subsidiary

 

   

December 22, 2016

Established KB Private Equity Fund III as a second-tier subsidiary

 

   

December 30, 2016

Purchased new shares of KB Insurance in a rights offering, which increased the Company’s shareholding in KB Insurance from 33.29% to 39.81%

 

   

December 30, 2016

Merged KB Investment & Securities with and into Hyundai Securities, with Hyundai Securities as the surviving entity, then changed its name to KB Securities Co., Ltd. (“KB Securities”)

 

   

January 4, 2017

Converted Kookmin Bank Hong Kong Ltd., a subsidiary, into Kookmin Bank Hong Kong Branch

 

   

February 8, 2017

Added KB KOLAO LEASING Co., Ltd. as a second-tier subsidiary

 

   

March 8, 2017

Added KB Microfinance Myanmar Co., Ltd. as a second-tier subsidiary

 

   

March 22, 2017

Liquidated KBIC Private Equity Fund No. 3, a second-tier subsidiary

 

   

May 19, 2017

Acquired additional shares of KB Insurance in a tender offer, which increased the Company’s shareholding in KB Insurance from 39.81% to 94.30%.

 

   

May 19, 2017

Acquired additional shares of KB Capital in a tender offer, which increased the Company’s shareholding in KB Capital from 52.02% to 79.70%

 

   

June 20, 2017

Liquidated Korea GCC Global Cooperation Private Equity Fund, a second-tier subsidiary

 

   

July 7, 2017

Converted KB Insurance and KB Capital into wholly-owned subsidiaries of the Company through comprehensive stock swaps

 

   

September 29, 2017

Added KB Asset Management Singapore Pte. Ltd. as a second-tier subsidiary (changed from a second-tier subsidiary of KB Securities to a first-tier subsidiary of KB Asset Management Co., Ltd.)

 

7


Table of Contents
   

October 9, 2017

Added Maritime Securities Incorporation as a second-tier subsidiary

 

   

October 16, 2017

Disposed of Hyundai Savings Bank, Co., Ltd., a second-tier subsidiary

 

   

December 22, 2017

Disposed of Hyundai Asset Management, Co., Ltd., a second-tier subsidiary

 

   

January 17, 2018

Added KB-TS Technology Venture Private Equity Fund as a second-tier subsidiary (equity interests of 16%, 30% and 10% held by KB Securities, Kookmin Bank and KB Capital, respectively)

 

   

May 16, 2018

Converted Kookmin Bank International Ltd., a subsidiary, into Kookmin Bank London Branch (liquidation in progress)

 

   

July 6, 2018

Liquidated Hyundai-Tongyang Agrifood Private Equity Fund, a second-tier subsidiary

 

   

July 6, 2018

Added KB Daehan Specialized Bank Plc. as a second-tier subsidiary

 

   

August 21, 2018

Added KBAM Shanghai Advisory Services Co., Ltd. as a second-tier subsidiary

 

   

December 31, 2018

Added KB-Stonebridge Secondary Private Equity Fund as a second-tier subsidiary

 

   

January 9, 2019

Added KB-SPROTT Renewable Private Equity Fund I as a second-tier subsidiary

 

   

February 22, 2019

Liquidated KoFC KBIC Frontier Champ 2010-5 PEF, a second-tier subsidiary

 

1.3.

Overview of the Business Group

 

         

(As of March 31, 2019)

 

Type

  

Name of Company

  

Controlling Company

  

Remarks

Holding Company    KB Financial Group    —      Listed
1st Tier Subsidiaries    Kookmin Bank    KB Financial Group    Not listed
   KB Securities Co., Ltd.    KB Financial Group    Not listed
   KB Insurance Co., Ltd.    KB Financial Group    Not listed
   KB Kookmin Card Co., Ltd.    KB Financial Group    Not listed
   KB Asset Management Co., Ltd.    KB Financial Group    Not listed
   KB Capital Co., Ltd.    KB Financial Group    Not listed
   KB Life Insurance Co., Ltd.    KB Financial Group    Not listed
   KB Real Estate Trust Co., Ltd.    KB Financial Group    Not listed
   KB Savings Bank Co., Ltd.    KB Financial Group    Not listed
   KB Investment Co., Ltd.    KB Financial Group    Not listed
   KB Data Systems Co., Ltd.    KB Financial Group    Not listed
   KB Credit Information Co., Ltd.    KB Financial Group    Not listed

 

8


Table of Contents
2nd Tier Subsidiaries    Kookmin Bank Cambodia PLC    Kookmin Bank   

Not listed

(Overseas)

   Kookmin Bank (China) Ltd.    Kookmin Bank   

Not listed

(Overseas)

   KB Microfinance Myanmar Co., Ltd.    Kookmin Bank   

Not listed

(Overseas)

   KBFG Securities America Inc.    KB Securities   

Not listed

(Overseas)

   KB Securities Hong Kong Ltd.    KB Securities   

Not listed

(Overseas)

   Keystone-Hyundai Securities No. 1 Private Equity Fund    KB Securities    Not listed
   KB-IGen Private Equity Fund No. 1    KB Securities    Not listed
   KB Private Equity Fund III    KB Securities    Not listed
   KB SECURITIES VIETNAM JOINT STOCK COMPANY    KB Securities   

Not listed

(Overseas)

   KB-TS Technology Venture Private Equity Fund    KB Securities    Not listed
   KB-Stonebridge Secondary Private Equity Fund    KB Securities    Not listed
   KB-SPROTT Renewable Private Equity Fund I    KB Securities    Not listed
   KB Claims Survey & Adjusting Co., Ltd.    KB Insurance    Not listed
   KB Sonbo CNS    KB Insurance    Not listed
   Leading Insurance Services, Inc.    KB Insurance   

Not listed

(Overseas)

   LIG Insurance (China) Co., Ltd.    KB Insurance   

Not listed

(Overseas)

   PT. Kookmin Best Insurance Indonesia    KB Insurance   

Not listed

(Overseas)

   KB Golden Life Care Co., Ltd.    KB Insurance    Not listed
   KB Daehan Specialized Bank Plc.    KB Kookmin Card   

Not listed

(Overseas)

   KB Asset Management Singapore Pte. Ltd.    KB Asset Management   

Not listed

(Overseas)

   KBAM Shanghai Advisory Services Co., Ltd.    KB Asset Management   

Not listed

(Overseas)

   KB KOLAO LEASING Co., Ltd.    KB Capital   

Not listed

(Overseas)

   KoFC POSCO HANWHA KB Shared Growth No. 2. Private Equity Fund    KB Investment    Not listed
   KoFC Value-up Private Equity Fund    KB Investment    Not listed

 

9


Table of Contents
1.4.

Capital Structure

 

1.4.1.

Common Shares

Changes in Capital

Not included in quarterly business reports.

Number of Shares

 

(As of March 31, 2019)

  

(Unit: shares)

 

 
     Type  
     Common Stock      Other Stock      Total  

Shares Authorized for Issuance

     1,000,000,000        —          1,000,000,000  

Shares Issued (A)

     418,111,537        —          418,111,537  

Treasury Shares (B)

     25,265,602        —          25,265,602  

Shares Outstanding (A-B)

     392,845,935        —          392,845,935  

Note: The board of directors of the Company resolved to enter into a trust agreement to acquire treasury shares on February 4, 2016, August 2, 2016, November 24, 2017 and November 30, 2018. For more information, please refer to the Company’s reports on Form 6-K furnished to the Securities and Exchange Commission on each respective date.

 

1.4.2.

Voting Rights

 

(As of March 31, 2019)

 

             

Items

        Number of Shares      Notes  

Total number of issued shares

   Common shares      418,111,537        —    
   Preferred shares      —          —    

Shares without voting rights

   Common shares      25,265,602        Treasury shares  
   Preferred shares      —          —    

Shares for which voting rights cannot be exercised pursuant to the Articles of Incorporation

   —        —          —    

Shares for which voting rights are restricted under relevant laws and regulations

   —        —          —    
   —        —          —    

Shares with restored voting rights

   —        —          —    

Total shares for which voting rights may be exercised

   Common shares      392,845,935        —    
   Preferred shares      —          —    

 

1.5.

Dividends

Not included in quarterly business reports.

 

10


Table of Contents
2.

Business

 

  2.1.

Results of Operations

 

     (Unit: in millions of Won)  
     For the three
months ended
March 31, 2019
    For the three
months ended
March 31, 2018
    For the year
ended December 31,
2018
    For the year
ended December 31,
2017
 

Net interest income

     2,252,066       2,143,786       8,904,928       8,246,614  

Interest income

     3,646,443       3,194,767       13,734,569       11,919,057  

Interest expense

     (1,394,377     (1,050,981     (4,829,641     (3,672,443

Net fee and commission income

     550,647       628,922       2,243,376       2,050,024  

Fee and commission income

     911,711       969,498       3,717,720       3,988,250  

Fee and commission expense

     (361,064     (340,576     (1,474,344     (1,938,226

Net insurance income

     108,783       148,636       490,116       593,710  

Insurance income

     3,127,811       3,007,788       11,975,070       8,970,992  

Insurance expense

     (3,019,028     (2,859,152     (11,484,954     (8,377,282

Net gains (losses) on financial assets/liabilities at fair value through profit or loss (under K-IFRS 1039)

           —               203,724  

Net gains (losses) on financial assets/liabilities at fair value through profit or loss

     199,672       75,599       351,303       —    

Net other operating expenses

     (246,328     (213,551     (1,130,036     (901,890

General and administrative expenses

     (1,513,878     (1,391,704     (5,918,512     (5,628,664

Operating profit before provision for credit losses

     1,350,962       1,391,688       4,941,175       4,563,518  

Provision for credit losses

     (191,713     (164,537     (673,694     (548,244

Net operating profit

     1,159,249       1,227,151       4,267,481       4,015,274  

 

Note:    The consolidated financial information for the three months ended March 31, 2019, the three months ended March 31, 2018 and the year ended December 31, 2018 is based on K-IFRS 1109 and 1115. The corresponding financial information for the year ended December 31, 2017 has not been restated.

 

11


Table of Contents
  2.2.

Sources and Uses of Funds

 

  2.2.1.

Sources of Funds

 

                                                   

(Unit: in millions of Won)

 

 
          For the three months ended
March 31, 2019
     For the year ended
December 31, 2018
     For the year ended
December 31, 2017
 
          Average
Balance
     Interest Rate
(%)
     Ratio
(%)
     Average
Balance
     Interest Rate
(%)
     Ratio
(%)
     Average
Balance
     Interest Rate
(%)
     Ratio
(%)
 

Won Currency

   Deposits      250,212,429        1.54        52.34        238,468,014        1.39        52.82        219,970,681        1.20        54.26  
   Certificate of deposit      3,942,632        2.09        0.82        3,044,609        1.91        0.67        2,862,817        1.57        0.71  
   Borrowings      10,844,823        1.69        2.27        10,312,988        1.59        2.28        9,306,125        1.41        2.30  
   Call money      517,953        1.88        0.11        1,437,887        1.53        0.32        2,165,151        1.26        0.53  
   Debentures      47,809,911        2.30        10.00        44,072,110        2.29        9.76        36,393,274        2.17        8.98  
   Others      15,533,684        1.97        3.25        16,665,395        1.60        3.69        13,735,978        1.41        3.38  
     

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

 

Subtotal

     328,861,432        1.68        68.79        314,001,003        1.54        69.54        284,434,026        1.35        70.16  
     

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

 

Foreign Currency

   Deposits      11,813,903        1.32        2.47        11,039,672        1.15        2.45        10,156,743        0.80        2.51  
   Borrowings      9,360,518        2.43        1.96        8,249,765        2.02        1.83        6,438,408        1.17        1.59  
   Call money      553,954        2.64        0.12        751,171        2.35        0.17        1,239,627        1.39        0.31  
   Debentures      5,040,238        3.89        1.05        4,076,096        3.40        0.90        3,374,998        2.71        0.83  
   Others      342,086        1.34        0.07        297,657        0.89        0.07        321,263        0.56        0.07  
     

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

 

Subtotal

     27,110,699        2.21        5.67        24,414,361        1.85        5.42        21,531,039        1.24        5.31  
     

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

 

Others

   Total shareholders’
equity
     36,821,782        —          7.70        35,690,200        —          7.90        34,785,839        —          8.58  
   Allowances      803,002        —          0.17        750,262        —          0.17        829,075        —          0.20  
   Others      84,455,034        —          17.67        76,643,695        —          16.97        63,855,888        —          15.75  
     

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

 

Subtotal

        122,079,818        —          25.54        113,084,157        —          25.04        99,470,802        —          24.53  
     

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

 

Total

        478,051,949        —          100.00        451,499,521        —          100.00        405,435,867        —          100.00  
     

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

 

Note: Based on K-IFRS (on a consolidated basis).

 

12


Table of Contents
  2.2.2.

Uses of Funds

 

                                               

(Unit: in millions of Won)

 

 
     For the three months ended
March 31, 2019
    For the year ended
December 31, 2018
    For the year ended
December 31, 2017
 
   Average
Balance
    Interest Rate
(%)
     Ratio
(%)
    Average
Balance
    Interest Rate
(%)
     Ratio
(%)
    Average
Balance
    Interest Rate
(%)
     Ratio
(%)
 

Won Currency

   Due from banks      4,613,950       1.61        0.97       4,817,024       1.43        1.07       6,757,757       1.44        1.67  
   Securities      100,218,674       2.82        20.96       95,395,973       2.84        21.13       80,406,670       1.81        19.83  
   Loans      284,773,334       3.54        59.57       269,569,916       3.43        59.71       247,117,982       3.28        60.95  
  

Guarantee payments under payment guarantee

     6,861       0.88        —         8,206       1.87        —         17,008       0.66        —    
   Call loan      766,631       1.78        0.16       632,317       1.48        0.14       315,950       1.28        0.08  
  

Private placement corporate bonds

     1,463,470       3.42        0.31       1,452,396       3.44        0.32       1,801,681       4.00        0.44  
   Credit cards      17,508,712       8.18        3.66       16,722,691       8.15        3.70       14,877,741       8.32        3.67  
   Others      3,989,317       4.61        0.83       4,209,878       4.08        0.93       4,123,143       3.87        1.02  
   Allowance      (2,526,420     —          (0.53     (2,434,872     —          (0.54     (2,116,366     —          (0.52
     

 

 

   

 

 

    

 

 

   

 

 

   

 

 

    

 

 

   

 

 

   

 

 

    

 

 

 

Subtotal

     410,814,529       3.57        85.93       390,373,529       3.49        86.46       353,301,566       3.15        87.14  
     

 

 

   

 

 

    

 

 

   

 

 

   

 

 

    

 

 

   

 

 

   

 

 

    

 

 

 

Foreign Currency

   Due from banks      4,422,936       1.45        0.93       3,666,805       1.36        0.81       2,862,165       1.06        0.71  
   Securities      11,807,971       4.92        2.47       12,704,025       2.47        2.81       10,013,637       3.19        2.47  
   Loans      9,524,968       3.15        1.99       8,050,597       2.96        1.78       7,136,381       2.29        1.76  
   Call loan      2,396,647       2.92        0.50       2,553,987       2.38        0.57       2,909,920       1.53        0.72  
   Bills bought      3,389,533       2.75        0.71       4,113,332       1.93        0.91       3,166,307       1.51        0.78  
   Allowance      (185,258     —          (0.04     (262,835     —          (0.06     (173,771     —          (0.04
   Others      444,228       —          0.09       153,277       —          0.03       72,297       —          0.01  
     

 

 

   

 

 

    

 

 

   

 

 

   

 

 

    

 

 

   

 

 

   

 

 

    

 

 

 

Subtotal

     31,801,025       3.56        6.65       30,979,188       2.41        6.85       25,986,936       2.35        6.41  
     

 

 

   

 

 

    

 

 

   

 

 

   

 

 

    

 

 

   

 

 

   

 

 

    

 

 

 
Others    Cash      1,811,014       —          0.38       1,769,656       —          0.39       1,726,448       —          0.43  
  

Fixed assets held for business

     6,930,505       —          1.45       5,639,374       —          1.25       5,826,159       —          1.44  
   Others      26,694,876       —          5.59       22,737,774       —          5.05       18,594,758       —          4.58  
     

 

 

   

 

 

    

 

 

   

 

 

   

 

 

    

 

 

   

 

 

   

 

 

    

 

 

 

Subtotal

        35,436,395       —          7.42       30,146,804       —          6.69       26,147,365       —          6.45  
     

 

 

   

 

 

    

 

 

   

 

 

   

 

 

    

 

 

   

 

 

   

 

 

    

 

 

 

Total

        478,051,949       —          100.00       451,499,521       —          100.00       405,435,867       —          100.00  
     

 

 

   

 

 

    

 

 

   

 

 

   

 

 

    

 

 

   

 

 

   

 

 

    

 

 

 

Note: Based on K-IFRS (on a consolidated basis).

 

13


Table of Contents
  2.3.

Other Information to Consider in Making an Investment Decision

 

  2.3.1.

Capital Adequacy

 

KB Financial Group     (Unit: in billions of Won)  
     As of March 31, 2019(1)     As of December 31, 2018     As of December 31, 2017  

Total capital (A)

     35,240       34,476       32,402  

Risk-weighted assets (B)

     237,607       236,099       212,777  

BIS ratio (A/B)

     14.83     14.60     15.23

Note: Calculated in accordance with Basel III.

 

(1)

Preliminary figures

 

Kookmin Bank     (Unit: in billions of Won)  
     As of March 31, 2019     As of December 31, 2018     As of December 31, 2017  

Total capital (A)

     28,437       27,694       25,914  

Risk-weighted assets (B)

     180,483       178,433       161,825  

BIS ratio (A/B)

     15.76     15.52     16.01

Note: Calculated in accordance with Basel III.

 

KB Securities     (Unit: in billions of Won)  
     As of March 31, 2019     As of December 31, 2018     As of December 31, 2017  

Net operating capital (A)

     2,810       2,969       3,211  

Total amount at risk (B)

     1,245       1,251       1,048  

Maintenance equity margin (C)

     134       134       134  

Net capital ratio (A-B)/(C)

     1,165.56     1,278.45     1,609.03

Capital surplus (A-B)

     1,565       1,718       2,163  

 

KB Insurance     (Unit: in billions of Won)  
     As of March 31, 2019(1)     As of December 31, 2018     As of December 31, 2017  

Available capital (A)

     3,476       3,333       3,080  

Required capital (B)

     1,827       1,782       1,618  

RBC ratio (A/B)

     190.3     187.1     190.3

Note: RBC ratio: Risk-Based Capital ratio.

 

(1)

Preliminary figures

 

14


Table of Contents
  2.3.2.

Credit Ratings

 

               (As of March 31, 2019)

Date of Rating

  

Type

  

Credit Rating

  

Rating Company

(Rating Range)

2/24/2017    Debentures    AAA   

Korea Ratings (AAA ~ D) / KIS Ratings (AAA ~ D) /

NICE Investors Service (AAA ~ D)

4/5/2017    Debentures    AAA   

Korea Ratings (AAA ~ D) / KIS Ratings (AAA ~ D) /

NICE Investors Service (AAA ~ D)

5/23/2017    Debentures    AAA   

Korea Ratings (AAA ~ D) / KIS Ratings (AAA ~ D) /

NICE Investors Service (AAA ~ D)

6/23/2017    Debentures    AAA   

Korea Ratings (AAA ~ D) / KIS Ratings (AAA ~ D) /

NICE Investors Service (AAA ~ D)

6/23/2017    Commercial Paper    A1   

Korea Ratings (A1 ~ D) / KIS Ratings (A1 ~ D) /

NICE Investors Service (A1 ~ D)

8/28/2017    Debentures    AAA   

Korea Ratings (AAA ~ D) / KIS Ratings (AAA ~ D) /

NICE Investors Service (AAA ~ D)

1/24/2018    Debentures    AAA   

Korea Ratings (AAA ~ D) / KIS Ratings (AAA ~ D) /

NICE Investors Service (AAA ~ D)

2/27/2018    Debentures    AAA   

Korea Ratings (AAA ~ D) / KIS Ratings (AAA ~ D) /

NICE Investors Service (AAA ~ D)

4/5/2018    Debentures    AAA   

Korea Ratings (AAA ~ D) / KIS Ratings (AAA ~ D) /

NICE Investors Service (AAA ~ D)

6/11/2018    Debentures    AAA   

Korea Ratings (AAA ~ D) / KIS Ratings (AAA ~ D) /

NICE Investors Service (AAA ~ D)

6/25/2018    Commercial Paper    A1   

Korea Ratings (A1 ~ D) / KIS Ratings (A1 ~ D) /

NICE Investors Service (A1 ~ D)

7/24/2018    Debentures    AAA   

Korea Ratings (AAA ~ D) / KIS Ratings (AAA ~ D) /

NICE Investors Service (AAA ~ D)

10/4/2018    Debentures    AAA   

Korea Ratings (AAA ~ D) / KIS Ratings (AAA ~ D) /

NICE Investors Service (AAA ~ D)

2/21/2019    Debentures    AAA   

Korea Ratings (AAA ~ D) / KIS Ratings (AAA ~ D) /

NICE Investors Service (AAA ~ D)

 

15


Table of Contents
  2.3.3.

Early Retirement Program

To enhance productivity by improving its labor structure, Kookmin Bank implemented a voluntary early retirement program following negotiations with its labor union.

 

Date of retirement

 

Number of retired persons

January 28, 2019

  613

 

  2.3.4.

Acquisition of Shares of Bank Bukopin of Indonesia

Kookmin Bank entered into a share subscription agreement with Bank Bukopin of Indonesia on June 26, 2018 and acquired its new shares on July 27, 2018.

 

    (Unit: in millions of Won)

Ownership

 

Acquisition amount

22%

  116,421(1)(2) (IDR 1,460,910,000,000)

 

(1)

The acquisition amount in IDR is converted to Won at the exchange rate on July 27, 2018, the acquisition date.

(2)

Includes consulting fees of Won 3,347 million paid in connection with the acquisition. The acquisition amount excluding such consulting fees was Won 113,074 million.

 

16


Table of Contents
3.

Financial Information

 

3.1.

Consolidated Financial Information

 

  3.1.1.

Consolidated Statements of Financial Position

 

    

(Unit: in millions of Won)

 
     As of March 31, 2019      As of December 31, 2018      As of December 31, 2017  

Cash and due from financial institutions

     19,184,293        20,274,490        19,817,825  

Financial assets at fair value through profit or loss (under K-IFRS 1039)

     —          —          32,227,345  

Financial assets at fair value through profit or loss

     49,480,097        50,987,847        —    

Derivative financial assets

     2,328,772        2,025,962        3,310,166  

Loans at amortized cost

     320,948,427        319,201,603        290,122,838  

Financial investments

     64,678,807        61,665,094        66,608,243  

Investments in associates and joint ventures

     507,570        504,932        335,070  

Property and equipment

     4,859,604        4,272,127        4,201,697  

Investment property

     2,130,976        2,119,811        848,481  

Intangible assets

     2,766,373        2,755,783        2,943,060  

Net defined benefit assets

     —          —          894  

Current income tax assets

     9,235        10,004        6,324  

Deferred income tax assets

     5,073        4,158        3,991  

Assets held for sale

     14,513        16,952        155,506  

Other assets

     23,785,658        15,749,535        16,204,169  
  

 

 

    

 

 

    

 

 

 

Total assets

     490,699,398        479,588,298        436,785,609  
  

 

 

    

 

 

    

 

 

 

Financial liabilities at fair value through profit or loss (under K-IFRS 1039)

     —          —          12,023,058  

Financial liabilities at fair value through profit or loss

     16,401,210        15,326,859        —    

Derivative financial liabilities

     2,577,476        2,901,247        3,142,765  

Deposits

     282,738,677        276,770,449        255,800,048  

Debts

     30,994,102        33,004,834        28,820,928  

Debentures

     51,667,074        53,278,697        44,992,724  

Provisions

     572,404        525,859        568,033  

Net defined benefit liabilities

     300,930        262,213        154,702  

Current income tax liabilities

     707,024        698,634        433,870  

Deferred income tax liabilities

     732,683        492,534        533,069  

Insurance contract liabilities

     33,891,323        33,412,949        31,801,275  

Other liabilities

     34,289,163        27,200,996        24,470,308  
  

 

 

    

 

 

    

 

 

 

Total liabilities

     454,872,066        443,875,271        402,740,780  
  

 

 

    

 

 

    

 

 

 

 

17


Table of Contents
     As of March 31, 2019      As of December 31, 2018      As of December 31, 2017  

Equity attributable to shareholders of the parent company

     35,817,696        35,703,916        34,038,685  

Share capital

     2,090,558        2,090,558        2,090,558  

Capital surplus

     17,119,776        17,121,660        17,122,228  

Accumulated other comprehensive income

     352,097        177,806        537,668  

Retained earnings

     17,349,948        17,282,441        15,044,204  

Treasury shares

     (1,094,683      (968,549      (755,973

Non-controlling interests

     9,636        9,111        6,144  

Total equity

     35,827,332        35,713,027        34,044,829  
  

 

 

    

 

 

    

 

 

 

Total liabilities and equity

     490,699,398        479,588,298        436,785,609  
  

 

 

    

 

 

    

 

 

 

Note: The consolidated financial information as of March 31, 2019 and December 31, 2018 is based on K-IFRS 1109 and 1115. The corresponding financial information as of December 31, 2017 has not been restated.

 

18


Table of Contents
  3.1.2.

Consolidated Statements of Comprehensive Income

 

     (Unit: in millions of Won, except per share amounts)  
     For the three months
ended March 31, 2019
     For the three months
ended March 31, 2018
     For the year ended
December 31, 2018
     For the year ended
December 31, 2017
 

Net interest income

     2,252,066        2,143,786        8,904,928        8,246,614  

Net fee and commission income

     550,647        628,922        2,243,376        2,050,024  

Net insurance income (expense)

     108,783        148,636        490,116        593,710  

Net gains (losses) on financial assets/liabilities at fair value through profit or loss (under K-IFRS 1039)

     —          —          —          203,724  

Net gains (losses) on financial assets/liabilities at fair value through profit or loss

     199,672        75,599        351,303        —    

Net other operating expenses

     (246,328      (213,551      (1,130,036      (901,890

General and administrative expenses

     (1,513,878      (1,391,704      (5,918,512      (5,628,664

Operating profit before provision for credit losses

     1,350,962        1,391,688        4,941,175        4,563,518  

Provision for credit losses

     (191,713      (164,537      (673,694      (548,244

Net operating income

     1,159,249        1,227,151        4,267,481        4,015,274  

Net non-operating income (loss)

     6,694        116,267        34,051        123,150  

Profit before income tax

     1,165,943        1,343,418        4,301,532        4,138,424  

Income tax expense

     (320,013      (375,029      (1,239,586      (794,963

Profit for the period

     845,930        968,389        3,061,946        3,343,461  

Other comprehensive income (loss) for the period, net of tax

     156,067        (13,298      (10,482      136,226  

Total comprehensive income for the period

     1,001,997        955,091        3,051,464        3,479,687  

Profit attributable to:

     845,930        968,389        3,061,946        3,343,461  

Shareholders of the parent company

     845,652        968,232        3,061,191        3,311,438  

Non-controlling interests

     278        157        755        32,023  

Total comprehensive income for the period attributable to:

     1,001,997        955,091        3,051,464        3,479,687  

Shareholders of the parent company

     1,001,534        955,021        3,050,805        3,445,285  

Non-controlling interests

     463        70        659        34,402  

Earnings per share

           

Basic earnings per share (Won)

     2,145        2,436        7,721        8,305  

Diluted earnings per share (Won)

     2,131        2,424        7,676        8,257  

 

Note:    The consolidated financial information for the three months ended March 31, 2019, the three months ended March 31, 2018 and the year ended December 31, 2018 is based on K-IFRS 1109 and 1115. The corresponding financial information for the year ended December 31, 2017 has not been restated.

 

19


Table of Contents
3.2.

Separate Financial Information

 

  3.2.1.

Separate Statements of Financial Position

 

     (Unit: in millions of Won)  
     As of March 31, 2019       As of December 31, 2018       As of December 31, 2017  

Cash and due from financial institutions

     449,038       344,302       245,400  

Financial assets at fair value through profit or loss (under K-IFRS 1039)

     —         —         284,485  

Financial assets at fair value through profit or loss

     1,050,582       289,179       —    

Loans at amortized cost

     120,000       50,000       10,000  

Investments in subsidiaries

     24,112,116       24,062,116       24,062,116  

Property and equipment

     6,074       2,185       697  

Intangible assets

     9,535       9,646       8,864  

Net defined benefit assets

     —         —         201  

Deferred income tax assets

     6,369       8,184       10,282  

Other assets

     889,589       857,462       480,789  
  

 

 

   

 

 

   

 

 

 

Total assets

     26,643,303       25,623,074       25,102,834  
  

 

 

   

 

 

   

 

 

 

Debts

     —         300,000       300,000  

Debentures

     5,912,476       5,373,266       5,162,600  

Net defined benefit liabilities

     765       183       —    

Current income tax liabilities

     701,206       691,909       308,854  

Other liabilities

     958,834       186,481       204,835  
  

 

 

   

 

 

   

 

 

 

Total liabilities

     7,573,281       6,551,839       5,976,289  
  

 

 

   

 

 

   

 

 

 

Share capital

     2,090,558       2,090,558       2,090,558  

Capital surplus

     14,742,814       14,742,814       14,742,814  

Accumulated other comprehensive loss

     (7,164     (7,144     (5,233

Retained earnings

     3,338,497       3,213,556       3,054,379  

Treasury Shares

     (1,094,683     (968,549     (755,973
  

 

 

   

 

 

   

 

 

 

Total equity

     19,070,022       19,071,235       19,126,545  
  

 

 

   

 

 

   

 

 

 

Total liabilities and equity

     26,643,303       25,623,074       25,102,834  
  

 

 

   

 

 

   

 

 

 

Note: The separate financial information as of March 31, 2019 and December 31, 2018 is based on K-IFRS 1109 and 1115. The corresponding financial information as of December 31, 2017 has not been restated.

 

20


Table of Contents
  3.2.2.

Separate Statements of Comprehensive Income

 

 

     (Unit: in millions of Won, except per share amounts)  
     For the three months
ended March 31, 2019
     For the three months
ended March 31, 2018
     For the year ended
December 31, 2018
     For the year ended
December 31, 2017
 

Net interest expense

     (30,042      (28,101      (115,835      (97,218

Net fee and commission expense

     (722      (1,236      (5,208      (7,808

Net gains on financial assets at fair value through profit or loss (under K-IFRS 1039)

     —          —          —          745  

Net gains on financial assets at fair value through profit or loss

     4,797        2,609        18,319        —    

Net other operating income

     926,934        1,089,556        1,089,556        709,544  

General and administrative expenses

     (14,398      (13,117      (57,845      (57,485

Operating profit before provision for credit losses

     886,569        1,049,711        928,987        547,778  

Provision for credit losses

     —          —          —          —    

Operating profit

     886,569        1,049,711        928,987        547,778  

Net non-operating expense

     (70      (86      (259      125  

Profit before income tax

     886,499        1,049,625        928,728        547,903  

Income tax benefit (expense)

     (1,822      (1,546      (2,823      5,522  

Profit for the period

     884,677        1,048,079        925,905        553,425  

Other comprehensive income (loss) for the period, net of tax

     (20      (38      (1,911      (491

Total comprehensive income for the period

     884,657        1,048,041        923,994        552,934  

Earnings per share

           

Basic earnings per share (Won)

     2,244        2,637        2,335        1,388  

Diluted earnings per share (Won)

     2,229        2,624        2,322        1,380  

Note: The separate financial information for the three months ended March 31, 2019, the three months ended March 31, 2018 and the year ended December 31, 2018 is based on K-IFRS 1109 and 1115. The corresponding financial information for the year ended December 31, 2017 has not been restated.

 

21


Table of Contents
3.3.

Other Selected Financial Data

 

  3.3.1.

Won-denominated Liquidity Ratio

 

    

(Unit: in millions of Won)

 

 

Category

   As of March 31, 2019     As of December 31, 2018     As of December 31, 2017  

Current assets in Won (A)

     1,295,411       30,150       47,253  

Current liabilities in Won (B)

     1,016,737       9,300       6,792  

Liquidity ratio (A/B)

     127.41     324.20     695.72

Note: 1) Based on K-IFRS (on a separate basis).

 

  2)

Calculated based on Won-denominated assets and liabilities due within one month.

 

  3.3.2.

Profitability Ratios

 

          (Unit: %)  

Category

  For the three months ended
March 31, 2019
    For the year ended
December 31, 2018
    For the year ended
December 31, 2017
 

Net income as a percentage of average total assets (ROA)

    0.71       0.66       0.82  

Net income as a percentage of average shareholders’ equity (ROE)

    9.59       8.82       10.18  

Note: Based on K-IFRS (on a consolidated basis).

 

22


Table of Contents
  3.3.3.

20 Largest Exposures of Kookmin Bank by Borrower

 

     (As of March 31, 2019)  

Company

   Credit extended  
     (Unit: in billions of Won)  

Samsung Electronics Co., Ltd.

     1,515  

Hyundai Motor Company

     1,109  

LG Display Co., Ltd.

     1,032  

Kia Motors Corporation

     710  

Hyundai Heavy Industries Co., Ltd.

     694  

S-OIL Corporation

     638  

Hyundai Capital Services, Inc.

     631  

Hyundai Steel Company

     627  

LG Electronics Inc.

     607  

Samsung Heavy Industries Co., Ltd.

     565  

GS Caltex Corporation

     478  

Daewoo Shipbuilding & Marine Engineering Co., Ltd.

     478  

Lotte Corporation

     460  

Korea Securities Finance Corp.

     441  

SK Energy Co., Ltd.

     437  

Samsung Display Co., Ltd.

     413  

LS-Nikko Copper Inc.

     400  

Shinsegae Inc.

     387  

POSCO International Co., Ltd.

     384  

CJ Cheiljedang Corp.

     382  
  

 

 

 

Total

     12,390  
  

 

 

 

 

23


Table of Contents
  3.3.4.

10 Largest Exposures of Kookmin Bank by Chaebol Group

 

     (As of March 31, 2019)  

Group

   Credit extended  
     (Unit: in billions of Won)  

Hyundai Motor

     4,927  

Samsung

     3,730  

SK

     2,392  

Lotte

     2,204  

LG

     2,012  

Hanwha

     1,754  

GS

     1,404  

CJ

     944  

Shinsegae

     831  

LS

     720  
  

 

 

 

Total

     20,918  
  

 

 

 

 

  3.3.5.

Kookmin Bank’s Loan Concentration by Industry

 

     (As of March 31, 2019)  

Industry

   Total Credit      Percentage of
Total Credit
 
     (Unit: in billions of Won, %)  

Manufacturing

     44,336.5        33.5  

Real estate

     27,642.1        20.9  

Retail and wholesale

     18,469.2        13.9  

Hotel, lodging and food service

     8,573.4        6.5  

Construction

     3,081.0        2.3  

Financial institutions

     2,752.3        2.1  

Others

     27,590.2        20.8  
  

 

 

    

 

 

 

Total

     132,444.8        100.00  
  

 

 

    

 

 

 

 

24


Table of Contents
  3.3.6.

Top 20 Non-Performing Loans of Kookmin Bank

 

          (As of March 31, 2019)  

Borrower

  

Industry

   Total Credit      Allowance
for Loan Losses
 
          (Unit: in billions of Won)  

Borrower A

   Construction      78.8        76.3  

Borrower B

   Construction      67.3        67.5  

Borrower C

   Publishing, Media, Broadcasting and Information Service      55.3        54.6  

Borrower D

   Shipbuilding      51.5        37.9  

Borrower E

   Construction      40.5        39.7  

Borrower F

   Shipping      23.8        23.5  

Borrower G

   Construction      16.7        15.8  

Borrower H

   Real estate and leasing      15.9        0.5  

Borrower I

   Real estate and leasing      13.9        0.8  

Borrower J

   Manufacturing      13.0        5.3  

Borrower K

   Retail and wholesale      11.1        7.7  

Borrower L

   Manufacturing      9.8        2.7  

Borrower M

   Retail and wholesale      9.8        4.9  

Borrower N

   Manufacturing      9.7        9.5  

Borrower O

   Manufacturing      8.2        5.0  

Borrower P

   Manufacturing      7.9        4.1  

Borrower Q

   Real estate and leasing      6.6        0.6  

Borrower R

   Construction      6.5        6.0  

Borrower S

   Manufacturing      6.2        4.3  

Borrower T

   Manufacturing      6.1        2.1  
     

 

 

    

 

 

 

Total

        458.6        368.7  
     

 

 

    

 

 

 

 

3.4.

Other Financial Information

See Exhibits 99.1 and 99.2 attached hereto for our consolidated and separate financial statements and relevant notes, which have been prepared in accordance with K-IFRS and reviewed by our independent auditors as stated in their review reports. The review reports will also be available on our website at www.kbfg.com.

 

25


Table of Contents
4.

Independent Public Accountants

 

4.1.

Audit / Review Services

 

Period

  

Auditor

  

Activity

  Compensation(1)
    (in millions of Won)    
   Accrued Time
(hours)
 

January 1 to
March 31, 2019

   Samil PricewaterhouseCoopers    Quarterly / first half and annual review & audit, review of internal accounting management system (including audit of internal control over financial reporting)   1,081      1,540  

January 1 to
December 31, 2018

   Samil PricewaterhouseCoopers    Quarterly / first half and annual review & audit, review of internal accounting management system (including audit of internal control over financial reporting)   949      9,820  

January 1 to
December 31, 2017

   Samil PricewaterhouseCoopers    Quarterly / first half and annual review & audit, review of internal accounting management system (including audit of internal control over financial reporting)   856      11,080  

 

(1)

Excluding value-added taxes.

 

4.2.

Public Company Accounting Oversight Board (“PCAOB”) Audit Services

 

Period

  

Auditor

  

Activity

   Service Period      Compensation(1)  
   (in millions of Won)  

January 1 to March 31, 2019

   Samil PricewaterhouseCoopers    PCAOB audit of consolidated financial statements and internal control over financial reporting     

May 1, 2019 to

April 30, 2020

 

 

     573  

January 1 to December 31, 2018

   Samil PricewaterhouseCoopers    PCAOB audit of consolidated financial statements and internal control over financial reporting     

May 1, 2018 to

April 30, 2019

 

 

     571  

January 1 to December 31, 2017

   Samil PricewaterhouseCoopers    PCAOB audit of consolidated financial statements and internal control over financial reporting     

May 1, 2017 to

April 30, 2018

 

 

     540  

 

(1)

Excluding value-added taxes.

 

26


Table of Contents
5.

Corporate Governance and Affiliated Companies

 

  5.1.

Board of Directors & Committees under the Board

As of March 31, 2019, our board of directors consisted of nine directors, comprising one executive director, one non-standing director and seven non-executive directors. The following committees currently serve under our board of directors:

 

   

Audit Committee;

 

   

Risk Management Committee;

 

   

Evaluation & Compensation Committee;

 

   

Non-Executive Director Nominating Committee;

 

   

Subsidiaries’ CEO Director Nominating Committee;

 

   

CEO Nominating Committee; and

 

   

Audit Committee Member Nominating Committee.

For the list of our directors, see 6. Directors, Senior Management and Employees — 6.1. Executive Directors, — 6.2. Non-standing Directors and — 6.3. Non-executive Directors below.

 

  5.2.

Audit Committee

The audit committee oversees our financial reporting and approves the appointment of our independent auditors and internal compliance officers. The committee also reviews our financial information, auditor’s examinations, key financial statement issues, the plans and evaluation of internal controls and the administration of our financial affairs by the board of directors. In connection with the general meetings of shareholders, the committee examines the agenda for, and financial statements and other reports to be submitted by, the board of directors to each general meeting of shareholders. The committee holds regular meetings every quarter and on an as-needed basis.

 

27


Table of Contents
  5.3.

Compensation to Directors

 

  5.3.1.

Total Amount Approved at the Meeting of Shareholders

 

(Unit: in millions of Won)

 

 
     Total number of persons(1)      Total amount approved at shareholders’ meeting(2)      Notes  

Registered Directors (Non-executive directors)

     9 (7)        2,500        —    

 

(1)

Represents the total number of applicable persons as of March 31, 2019.

(2)

Represents the aggregate amount for all directors (including non-executive directors). Excludes compensation in the form of long-term performance-based stock grants.

 

  5.3.2.

Total Amount Paid

 

(As of March 31, 2019)           (Unit: in millions of Won)  

Total number of persons(1)

   Total payment(2)(4)      Average payment per person(3)      Notes  

9

     482        54        —    

 

(1)

Represents the total number of applicable persons as of March 31, 2019.

(2)

Represents the total amount paid (rounded to the nearest million) for the three months ended March 31, 2019.

(3)

Represents (i) the total amount paid (rounded to the nearest million) for the three months ended March 31, 2019, divided by (ii) the number of applicable persons for the applicable reporting period.

 

  *

Jongsoo Han resigned from his post as a non-executive director on March 25, 2019.

 

  *

Kyung Ho Kim was newly appointed as a non-executive director on March 27, 2019.

 

(4)

Payment subject to the Company’s internal policies on compensation to directors.

 

  5.3.3.

Compensation Breakdown

 

 

(As of March 31, 2019)    (Unit: in millions of Won)  
     Total number of
persons(1)
     Total payment (2)(4)      Average
payment
per person (3)
     Notes  

Registered Directors (excluding non-executive directors and Audit Committee members)

     2        378        189        —    

Non-executive Directors (excluding Audit Committee members)

     3        43        14        —    

Audit Committee members

     4        62        15        —    

Internal Auditor

     —          —          —          —    

 

(1)

Represents the total number of applicable persons as of March 31, 2019.

(2)

Represents the total amount paid (rounded to the nearest million) for the three months ended March 31, 2019.

(3)

Represents (i) the total amount paid (rounded to the nearest million) for the three months ended March 31, 2019, divided by (ii) the number of applicable persons for the applicable reporting period.

(4)

Payment subject to the Company’s internal policies on compensation to directors.

 

28


Table of Contents
5.4.

Top 5 Highest-Paid Individuals

 

  5.4.1.

Compensation exceeding Won 500 million – Individual basis

Not included in quarterly business reports.

 

29


Table of Contents
5.5.

Affiliated Companies

 

  5.5.1.

List of Affiliated Companies

Affiliated companies of KB Financial Group that are first-tier subsidiaries and KB Financial Group’s ownership of such companies as of March 31, 2019 are as follows.

 

  1)

Kookmin Bank (100.00%)

 

  2)

KB Securities Co., Ltd. (100.00%)

 

  3)

KB Insurance Co., Ltd. (100.00%)

 

  4)

KB Kookmin Card Co., Ltd. (100.00%)

 

  5)

KB Asset Management Co., Ltd. (100.00%)

 

  6)

KB Capital Co., Ltd. (100.00%)

 

  7)

KB Life Insurance Co., Ltd. (100.00%)

 

  8)

KB Real Estate Trust Co., Ltd. (100.00%)

 

  9)

KB Savings Bank Co., Ltd. (100.00%)

 

  10)

KB Investment Co., Ltd. (100.00%)

 

  11)

KB Data Systems Co., Ltd. (100.00%)

 

  12)

KB Credit Information Co., Ltd. (100.00%)

 

30


Table of Contents
6.

Directors, Senior Management and Employees

 

  6.1.

Executive Directors

As of March 31, 2019, we had one executive director. The name, position and the end of the term of our executive director and the number of shares of our common stock he owned as of March 31, 2019 are set forth below.

 

Name

   Date of Birth      Position      Common Shares Owned      End of Term  

Jong Kyoo Yoon

     October 1955        Chairman & Chief Executive Officer        21,000        November 20, 2020  

 

  6.2.

Non-standing Directors

As of March 31, 2019, we had one non-standing director. The name, position and the end of the term of our non-standing director and the number of shares of our common stock he owned as of March 31, 2019 are set forth below.

 

Name

   Date of Birth      Position      Common Shares Owned      End of Term  

Yin Hur

     December 1961        Non-standing Director        5,062        March 22, 2020  

 

  6.3.

Non-executive Directors

As of March 31, 2019, we had seven non-executive directors. The names, positions and the end of the terms of our non-executive directors and the number of shares of our common stock they respectively owned as of March 31, 2019 are set forth below.

 

Name

   Date of Birth    Position    Common
Shares
Owned
     End of Term

Suk Ryul Yoo

   April 1950    Non-executive Director      —        March 26, 2020

Stuart B. Solomon

   July 1949    Non-executive Director      —        March 26, 2020

Suk Ho Sonu

   September 1951    Non-executive Director      —        March 22, 2020

Myung Hee Choi

   February 1952    Non-executive Director      —        March 22, 2020

Kouwhan Jeong

   September 1953    Non-executive Director      —        March 22, 2020

Kyung Ho Kim

   December 1954    Non-executive Director      —        March 26, 2021

Jae Ha Park

   November 1957    Non-executive Director      —        March 26, 2020

 

31


Table of Contents
  6.4.

Senior Management

In addition to our executive director who is also our executive officer, we had the following executive officers as of April 1, 2019.

 

Name

   Date of Birth   

Position

   Common Shares Owned*      End of Term

Ki-Hwan Kim

   March 1963    Deputy President and Chief Finance Officer      1,439      December 31, 2019

Pil Kyu Im

   March 1964    Deputy President and Chief Human Resources Officer      1,005      December 31, 2019

Kyung Yup Cho

   September 1961    Deputy President; KB Research      1,500      December 31, 2019

Young Hyuk Jo

   April 1963    Deputy President; Audit Department      961      December 31, 2019

Chang Kwon Lee

   November 1965    Senior Managing Director and Chief Strategy Officer      500      December 31, 2019

Hyun Jin Shin

   February 1965    Senior Managing Director and Chief Risk Management Officer      1,000      December 31, 2019

Nam Hoon Cho

   June 1968    Managing Director and Chief Global Strategy Officer      1,000      December 31, 2019

Chan Il Park

   March 1963    Managing Director and Chief Compliance Officer      913      December 31, 2020

Soon Bum Kwon

   October 1966    Managing Director      1,255      December 31, 2019

Jeong Rim Park

   November 1963    Head of Capital Market Business Unit      650      December 31, 2019

Jong Hee Yang

   June 1961    Head of Insurance Business Unit      914      December 31, 2019

Dong Cheol Lee

   October 1961    Head of Retail Customer Business Unit      1,010      December 31, 2019

Bo Youl Oh

   January 1962    Head of Corporate and Investment Banking Business Unit      463      December 31, 2019

Young Gil Kim

   January 1963    Head of Wealth Management Business Unit      152      December 31, 2019

Deok Soon Shin

   February 1963    Head of Small and Medium Enterprise Business Unit      1,155      December 31, 2019

Chai Hyun Sung

   September 1965    Chief Public Relation Officer      1,022      December 31, 2019

Dong Whan Han

   January 1965    Chief Digital Innovation Officer      1,100      December 31, 2019

Woo Yeul Lee

   November 1964    Chief Information Technology Officer      1,086      December 31, 2019

Jin Soo Yoon

   February 1964    Chief Data Officer      —        March 31, 2021

Jin Gyu Maeng

   January 1966    General Manager of Planning and Coordination Office      603      December 31, 2019

 

*

Represents the number of common shares owned as of March 31, 2019.

 

32


Table of Contents

As of April 1, 2019, the following management personnel also served as senior management at our subsidiaries.

 

Name

  Subsidiary  

Position

  Appointment Date  

Yin Hur

  Kookmin Bank  

President and Chief Executive Officer

    November 2017  

Jeong Rim Park

  KB Securities  

Chief Executive Officer

    January 2019  

Jong Hee Yang

  KB Insurance  

Chief Executive Officer

    March 2016  

Dong Cheol Lee

  KB Kookmin Card  

Chief Executive Officer

    January 2018  

Bo Youl Oh

  Kookmin Bank  

Senior Executive Vice President; Corporate and Investment Banking Customer Group

    January 2019  
  KB Securities  

Deputy President; Investment Banking Division

    January 2018  

Chai Hyun Sung

  Kookmin Bank  

Senior Managing Director; Consumer Brand Strategy Group

    January 2019  

Dong Whan Han

  Kookmin Bank  

Senior Managing Director; Digital Business Group

    January 2019  

Woo Yeul Lee

  Kookmin Bank  

Senior Managing Director; Information Technology Group

    January 2019  

Jin Soo Yoon

  Kookmin Bank  

Senior Managing Director; Data Strategy Division

    April 2019  
  KB Kookmin Card  

Senior Managing Director; Data Strategy Division

    April 2019  

Young Gil Kim

  Kookmin Bank  

Senior Managing Director; Wealth Management Group

    January 2019  
  KB Securities  

Deputy President; Wealth Management Division

    January 2019  

Deok Soon Shin

  Kookmin Bank  

Senior Managing Director; Small and Medium Enterprise Group

    January 2019  

Jin Gyu Maeng

  Kookmin Bank  

General Manager; Planning and Coordination Office

    January 2019  

Ki-Hwan Kim

  KB Insurance  

Non-standing Director

    February 2018  
  KB Kookmin Card  

Non-standing Director

    February 2018  

Chang Kwon Lee

  KB Securities  

Non-standing Director

    February 2018  

As of March 31, 2019, the following non-executive directors also served as a director at another company.

 

Name

   Company   

Position

   Appointment Date  

Suk Ryul Yoo

   Jungmok   

CEO

     December 2013  

Kouwhan Jeong

   Nambujeil Law and

Notary Office Inc.

  

President Attorney at Law

     May 2016  

 

  6.5.

Employees

The following table shows information regarding our employees as of March 31, 2019.

 

(Unit: in millions of Won)

 

 

Number of

Employees(A)(1)

   Average Tenure of
Employees
    Total Amount of Annual Salaries(B)     Average Annual Salary
per Person(B/A)
 

162

    

3 years and 3 months

(13 years and 9 months

 

) (2) 

    7,823 (3)      48 (3) 

 

(1)

Includes executive officers.

(2)

The term in parentheses includes tenure at our subsidiaries.

(3)

Includes retroactively paid bonus and wage increase for 2018. The average annual salary per person excluding such amounts is Won 38.6 million.

 

33


Table of Contents

The following table shows information regarding our executive officers as of March 31, 2019.

 

(Unit: in millions of Won)  

Number of

Executive Officers(A)*

   Total Amount of Annual Salaries(B)      Average Annual Salary
per Person(B/A)
 

9

     1,248        139  

 

*

Excludes ten executive officers who serve primarily as executive officers of our subsidiaries.

 

7.

Major Shareholders and Related Party Transactions

 

  7.1.

Major Shareholders

The following table presents information regarding holders of 5% or more of our total issued shares as of March 31, 2019.

 

(Unit: shares, %)

 

 

Name

   Number of Shares of Common Stock(1)      Percentage of Total Issued Shares(2)  

Korean National Pension Service

     39,704,733        9.50  

JP Morgan Chase Bank, N.A.(3)

     26,726,442        6.39  

 

(1)

Based on our shareholder registry as of December 31, 2018.

(2)

Based on 418,111,537 shares of our common stock issued as of December 31, 2018.

(3)

Depositary under our ADR program. The voting rights are held by ADR holders.

 

7.2.

Changes in the Largest Shareholder

 

(As of March 31, 2019)    (Unit: shares, %)

Name of Largest Shareholder

  

Date of Change in Largest
Shareholder/

Date of Change in

Number of Shares Owned

  

Number of Shares of Common
Stock

  

Percentage of Total
Issued Shares(1)

Korean National Pension Service

   December 31, 2011    26,510,171    6.86

Korean National Pension Service

   March 14, 2012    27,894,880    7.22

Korean National Pension Service

   August 1, 2012    31,817,770    8.24

Korean National Pension Service

   December 31, 2012    33,158,257    8.58

Korean National Pension Service

   June 12, 2013    34,479,641    8.92

Korean National Pension Service

   July 23, 2013    35,699,841    9.24

Korean National Pension Service

   December 31, 2013    38,476,974    9.96

Korean National Pension Service

   October 14, 2014    36,750,987    9.51

 

34


Table of Contents

Korean National Pension Service

   December 31, 2014    36,383,211    9.42

Korean National Pension Service

   December 31, 2015    35,534,667    9.20

Korean National Pension Service

   August 12, 2016    36,826,207    9.53

Korean National Pension Service

   December 31, 2016    41,190,896    9.85

Korean National Pension Service

   April 24, 2017    40,950,453    9.79

Korean National Pension Service

   October 16, 2017    40,479,793    9.68

Korean National Pension Service

   December 31, 2017    40,204,583    9.62

Korean National Pension Service

   December 31, 2018    39,704,733    9.50

 

(1)

Based on 418,111,537 total issued shares of common stock for dates on or after October 19, 2016, and 386,351,693 total issued shares of common stock for dates prior to October 19, 2016.

 

7.3.

Employee Stock Ownership Association

 

(As of March 31, 2019)   

(Unit: shares)

 

 

Company Name

   Number of Shares of
Common Stock Owned
 

KB Financial Group Inc.

     14,378  

Kookmin Bank

     2,343,492  

KB Securities Co., Ltd.

     13,653  

KB Insurance Co., Ltd.

     102,308  

KB Kookmin Card Co., Ltd.

     127,371  

KB Asset Management Co., Ltd.

     4,916  

KB Capital Co., Ltd.

     1,047  

KB Life Insurance Co., Ltd.

     8,192  

KB Real Estate Trust Co., Ltd.

     4,023  

KB Savings Bank Co., Ltd.

     2,265  

KB Investment Co., Ltd.

     731  

KB Data Systems Co., Ltd.

     7,193  

KB Credit Information Co., Ltd.

     5,736  
  

 

 

 

Total

     2,635,305  
  

 

 

 

 

35


Table of Contents
7.4.

Investments in Affiliated Companies

 

(As of March 31, 2019)

 

          (Units: shares, %, millions of Won)  

Company Name

   Ending Balance      Total Assets as of
the latest fiscal
year(1)
     Net Income
for the latest
fiscal year(1)
 
   Number of
Shares Owned
     Ownership      Book value  

Kookmin Bank

     404,379,116        100        14,821,721        356,959,258        2,259,198  

KB Securities Co., Ltd.

     298,620,424        100        3,342,391        45,086,292        178,850  

KB Insurance Co., Ltd.

     66,500,000        100        2,375,430        34,785,551        262,266  

KB Kookmin Card Co., Ltd.

     92,000,000        100        1,953,175        20,528,951        286,598  

KB Asset Management Co., Ltd.

     7,667,550        100        96,312        254,256        39,586  

KB Capital Co., Ltd.

     23,349,208        100        623,811        9,517,239        111,939  

KB Life Insurance Co., Ltd.

     91,200,000        100        485,314        9,680,379        14,824  

KB Real Estate Trust Co., Ltd.

     16,000,000        100        121,553        293,063        47,004  

KB Savings Bank Co., Ltd.

     8,001,912        100        157,544        1,388,844        11,018  

KB Investment Co., Ltd.

     8,951,797        100        104,910        528,701        14,532  

KB Data Systems Co., Ltd.

     800,000        100        6,334        40,197        2,942  

KB Credit Information Co., Ltd.

     1,252,400        100        23,621        26,276        185  
  

 

 

    

 

 

    

 

 

    

 

 

    

 

 

 

Total

     —          —          24,112,116        —          —    
  

 

 

    

 

 

    

 

 

    

 

 

    

 

 

 

 

(1)

Based on K-IFRS (on a consolidated basis).

 

36


Table of Contents
7.5.

Related Party Transactions

7.5.1. Purchase of capital securities issued by KB Capital Co., Ltd.

 

     (Unit: in billions of Won)

Issuer

  

Relationship

  

Type

   Issue
Amount
    

Issue Date

   Interest
Rate
   

Maturity Date

   Use of
Proceeds

KB Capital Co., Ltd.

   Subsidiary   

No. 299 Private Placement of Capital

Securities in Won

     50      March 27, 2015      5.011   March 27, 2045 (may be extended)    Working
capital
     (Unit: in billions of Won)

Issuer

  

Relationship

  

Type

   Issue
Amount
    

Issue Date

   Interest
Rate
   

Maturity Date

   Use of
Proceeds

KB Capital Co., Ltd.

   Subsidiary    No. 320 Private Placement of Capital Securities in Won      50      September 24, 2015      4.606   September 24, 2045 (may be extended)    Working
capital
     (Unit: in billions of Won)

Issuer

  

Relationship

  

Type

   Issue
Amount
    

Issue Date

   Interest
Rate
   

Maturity Date

   Use of
Proceeds

KB Capital Co., Ltd.

   Subsidiary   

No. 343 Private Placement of Capital

Securities in Won

     50      March 29, 2016      4.396   March 29, 2046 (may be extended)    Working
capital

 

37


Table of Contents
     (Unit: in billions of Won)

Issuer

  

Relationship

  

Type

   Issue
Amount
    

Issue Date

   Interest
Rate
   

Maturity Date

   Use of
Proceeds

KB Capital Co., Ltd.

   Subsidiary    No. 352 Private Placement of Capital Securities in Won      50      June 28, 2016      4.064   June 28, 2046 (may be extended)    Working

capital

     (Unit: in billions of Won)

Issuer

  

Relationship

  

Type

   Issue
Amount
    

Issue Date

   Interest
Rate
   

Maturity Date

   Use of
Proceeds

KB Capital Co., Ltd.

   Subsidiary    No. 367 Private Placement of Capital Securities in Won      50      November 28, 2016      4.744   November 28, 2046 (may be extended)    Working

capital

     (Unit: in billions of Won)

Issuer

  

Relationship

  

Type

   Issue
Amount
    

Issue Date

   Interest
Rate
   

Maturity Date

   Use of
Proceeds

KB Capital Co., Ltd.

   Subsidiary    No. 378 Private Placement of Capital Securities in Won      50      April 27, 2017      4.431   April 27, 2047 (may be extended)    Working

capital

 

38


Table of Contents
  7.5.2.

Prepayments and Loans to Subsidiaries

 

     (Unit: in billions of Won)

Name

  

Relationship

  

Account

   Loan Amount     

Current Balance

   Credit Offering Date     

Interest Rate

  

Maturity Date

KB Investment Co., Ltd.

   Subsidiary    Loans(1)      10      10      July 14, 2017      2.150%(2)    July 12, 2019

 

(1)

Unsecured credit loans

(2)

Changed from 2.042% to 2.150% upon extension of the loans on July 13, 2018.

 

     (Unit: in billions of Won)

Name

  

Relationship

  

Account

   Loan Amount     

Current Balance

   Credit Offering Date     

Interest Rate

  

Maturity Date

KB Investment Co., Ltd.

   Subsidiary    Loans(1)      40      40      July 13, 2018      2.150%    July 12, 2019

 

(1)

Unsecured credit loans

 

     (Unit: in billions of Won)

Name

  

Relationship

  

Account

   Loan Amount     

Current Balance

   Credit Offering Date     

Interest Rate

  

Maturity Date

KB Investment Co., Ltd.

   Subsidiary    Loans(1)      70      70      March 8, 2019      2.176%    March 7, 2020

 

(1)

Unsecured credit loans

 

39


Table of Contents

SIGNATURES

Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized.

 

   

KB Financial Group Inc.

    (Registrant)
Date: May 15, 2019    

By: /s/ Ki-Hwan Kim

    (Signature)
    Name:   Ki-Hwan Kim
    Title:   Deputy President and Chief Finance Officer

 

40