6-K 1 d889939d6k.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 March 2020

Commission File Number: 000-53445

 

 

KB Financial Group Inc.

(Translation of registrant’s name into English)

 

 

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

(Address of principal executive office)

 

 

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

Form 20-F  ☒             Form 40-F  ☐

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

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

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

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

 

 

 


Table of Contents

TABLE OF CONTENTS

 

1.    Introduction to the Company
1.1.    Business Purpose
1.2.    History
1.3.    Overview of the Business Group
1.4.    Capital Structure
1.5.    Dividends
2.    Business
2.1.    Results of Operations
2.2.    Sources and Uses of Funds
2.3.    Other Information to Consider in Making an Investment Decision
3.    Financial Information
3.1.    Consolidated Financial Information
3.2.    Separate Financial Information
3.3.    Other Selected Financial Data
3.4.    Other Financial Information
4.    Independent Public Accountants
4.1.    Audit/ Review Services
4.2.    Public Company Accounting Oversight Board (“PCAOB”) Audit Services
4.3.    Change in Auditor
5.    Corporate Governance and Affiliated Companies
5.1.    Board of Directors & Committees under the Board
5.2.    Audit Committee
5.3.    Compensation to Directors
5.4.    Highest-Paid Individuals
5.5.    Affiliated Companies
6.    Directors, Senior Management and Employees
6.1.    Executive Directors
6.2.    Non-standing Directors
6.3.    Non-executive Directors
6.4.    Senior Management
6.5.    Employees
7.    Major Shareholders and Related Party Transactions
7.1.    Major Shareholders
7.2.    Changes in the Largest Shareholder
7.3.    Employee Stock Ownership Association
7.4.    Investments in Affiliated Companies
7.5.    Related Party Transactions


Table of Contents

Summary of Business Report for Fiscal Year 2019

On March 30, 2020, KB Financial Group Inc. (“KB Financial Group”) filed its business report for the fiscal year ended December 31, 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.


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

 

   

July 1, 2009

KB Venture Capital Co., Ltd. changed its name to KB Investment Co., Ltd. (“KB Investment”)

 

   

January 22, 2010

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

 

   

March 2, 2011

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

 

   

March 14, 2011

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


Table of Contents
   

July 8, 2011

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

 

   

January 13, 2012

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

 

   

May 11, 2012

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

 

   

July 2, 2012

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

 

   

October 10, 2012

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

 

   

June 20, 2013

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

 

   

September 2, 2013

Added Yehansoul Savings Bank as a first-tier subsidiary

 

   

January 13, 2014

Yehansoul Savings Bank was merged into KB Savings Bank

 

   

March 20, 2014

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

 

   

June 24, 2015

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

 

   

November 23, 2015

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

 

   

May 31, 2016

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

 

   

June 21, 2016

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

 

   

June 28, 2016

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

 

   

December 1, 2016

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

 

   

December 29, 2016

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

 

   

December 30, 2016

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


Table of Contents
   

December 30, 2016

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

 

   

February 8, 2017

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

 

   

March 8, 2017

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

 

   

May 19, 2017

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

 

   

May 19, 2017

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

 

   

July 7, 2017

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

 

   

September 29, 2017

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

 

   

October 9, 2017

Added KB Securities Vietnam Joint Stock Company (formerly Maritime Securities Incorporation) as a second-tier subsidiary

 

   

October 16, 2017

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

 

   

December 22, 2017

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

 

   

January 17, 2018

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

 

   

July 6, 2018

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

 

   

August 21, 2018

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

 

   

December 31, 2018

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

 

   

January 9, 2019

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

 

   

September 17, 2019

Added KB-SP Private Equity Fund IV as a second-tier subsidiary


Table of Contents
1.3.

Overview of the Business Group

 

          (As of December 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
        

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-SP Private Equity Fund IV    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. KB 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


Table of Contents
1.4.

Capital Structure

 

  1.4.1.

Shares

Changes in Capital

 

(As of December 31, 2019)    (Unit: Won, shares)

Date

   Type    Number of Shares
Issued or Cancelled
     Par Value      Price     

Remarks

September 29, 2008

   Common Stock      356,351,693        5,000        48,444      Establishment of the Company

September 2, 2009

   Common Stock      30,000,000        5,000        37,250      Rights offering to existing shareholders; % increase in number of common shares: 8.41865%

October 19, 2016

   Common Stock      31,759,844        5,000        35,474      Stock Swap; % increase in number of common shares: 8.22045%

December 12, 2019

   Common Stock      2,303,617        5,000        —        Share Cancellation(1)

 

(1)

The cancelled shares constituted treasury shares acquired pursuant to a resolution of the board of directors of the Company within the limits of profit available for dividend payment, and as such, there was no change in paid-in capital.

Number of Shares

 

(As of December 31, 2019)             (Unit: shares)
     Type
     Common Stock      Other Stock      Total      Remarks

Shares Authorized for Issuance

     1,000,000,000        —          1,000,000,000      As specified in
the Articles of
Incorporation

Total Shares Issued (A)

     418,111,537        —          418,111,537      —  

Decrease in Number of Shares (B)

     2,303,617        —          2,303,617      —  

1. Capital Reduction

     —          —          —        —  

2. Cancellation

     2,303,617        —          2,303,617      Treasury Shares

3. Redemption

     —          —          —        —  

4. Other

     —          —          —        —  

Shares Issued as of December 31, 2019 (C=A-B)

     415,807,920        —          415,807,920      —  

Treasury Shares (D)

     26,173,585        —          26,173,585      —  

Shares Outstanding (C-D)

     389,634,335        —          389,634,335      —  

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. On December 6, 2019, the board of directors of the Company resolved to cancel 2,303,617 shares of the Company’s common stock held as treasury shares. For more information regarding the above, please refer to the Company’s reports on Form 6-K furnished to the Securities and Exchange Commission on each respective date above.


Table of Contents
  1.4.2.

Voting Rights

 

(As of December 31, 2019)                (Unit: shares)

Items

        Number of Shares      Notes

Total number of issued shares

   Common shares      415,807,920      —  
   Preferred shares      —        —  

Shares without voting rights

   Common shares      26,173,585      Treasury shares
   Preferred shares      —        —  

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

   —        —        —  

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

   —        —        —  

Shares with restored voting rights

   —        —        —  

Total shares for which voting rights may be exercised

   Common shares      389,634,335      —  
   Preferred shares      —        —  

 

1.5.

Dividends

 

(Unit: in millions of Won, except per share amount)

 

Items

        January 1, 2019 to
December 31, 2019
     January 1, 2018 to
December 31, 2018
     January 1, 2017 to
December 31, 2017
 

Par value per share (Won)

        5,000        5,000        5,000  

(Consolidated) Net income

        3,311,828        3,061,191        3,311,438  

(Consolidated) Earnings per share (Won)

        8,451        7,721        8,305  
     

 

 

    

 

 

    

 

 

 

Total cash dividends

        861,092        759,736        766,728  
     

 

 

    

 

 

    

 

 

 

Total stock dividends

        —          —          —    
     

 

 

    

 

 

    

 

 

 

(Consolidated) Cash dividend payout ratio (%)

     26.0        24.8        23.2  

Cash dividend yield (%)

   Common Shares      4.5        4.0        3.1  
        —          —          —    

Stock dividend yield (%)

   Common Shares      —          —          —    
        —          —          —    

Cash dividend per share (Won)

   Common Shares      2,210        1,920        1,920  
        —          —          —    

Stock dividend per share

   Common Shares      —          —          —    
        —          —          —    


Table of Contents
2.

Business

 

2.1.

Results of Operations

 

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

Net interest income

     9,196,787       8,904,928       8,246,614  

Interest income

     14,639,187       13,734,569       11,919,057  

Interest expense

     (5,442,400     (4,829,641     (3,672,443

Net fee and commission income

     2,355,004       2,243,376       2,050,024  

Fee and commission income

     3,879,247       3,717,720       3,988,250  

Fee and commission expense

     (1,524,243     (1,474,344     (1,938,226

Net insurance income

     299,512       490,116       593,710  

Insurance income

     12,317,182       11,975,070       8,970,992  

Insurance expense

     (12,017,670     (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

     643,872       351,303       —    

Net other operating expenses

     (1,063,324     (1,130,036     (901,890

General and administrative expenses

     (6,271,017     (5,918,512     (5,628,664

Operating profit before provision for credit losses

     5,160,834       4,941,175       4,563,518  

Provision for credit losses

     (670,185     (673,694     (548,244

Net operating profit

     4,490,649       4,267,481       4,015,274  

 

Note:

The consolidated financial information for the year ended December 31, 2019 is based on K-IFRS 1116 and the corresponding financial information for the years ended December 31, 2017 and 2018 has not been restated.

  

In addition, the consolidated financial information for the years ended December 31, 2018 and 2019 is based on K-IFRS 1109 and 1115 and the corresponding financial information for the year ended December 31, 2017 has not been restated.


Table of Contents
2.2.

Sources and Uses of Funds

2.2.1. Sources of Funds

 

    (Unit: in millions of Won)  
        For the year ended
December 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

    255,533,447       1.44       52.09       238,468,014       1.39       52.82       219,970,681       1.20       54.26  
 

Certificate of deposit

    4,780,665       1.95       0.97       3,044,609       1.91       0.67       2,862,817       1.57       0.71  
 

Borrowings

    11,332,972       1.67       2.31       10,312,988       1.59       2.28       9,306,125       1.41       2.30  
 

Call money

    891,357       1.55       0.18       1,437,887       1.53       0.32       2,165,151       1.26       0.53  
 

Debentures

    47,127,572       2.33       9.61       44,072,110       2.29       9.76       36,393,274       2.17       8.98  
 

Others

    15,203,562       1.88       3.11       16,665,395       1.60       3.69       13,735,978       1.41       3.38  
   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

Subtotal

      334,869,575       1.60       68.27       314,001,003       1.54       69.54       284,434,026       1.35       70.16  
   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

Foreign Currency

 

Deposits

    13,370,035       1.25       2.73       11,039,672       1.15       2.45       10,156,743       0.80       2.51  
 

Borrowings

    9,668,310       2.19       1.97       8,249,765       2.02       1.83       6,438,408       1.17       1.59  
 

Call money

    527,809       2.34       0.11       751,171       2.35       0.17       1,239,627       1.39       0.31  
 

Debentures

    5,447,017       2.62       1.11       4,076,096       3.40       0.90       3,374,998       2.71       0.83  
 

Others

    463,266       1.38       0.09       297,657       0.89       0.07       321,263       0.56       0.07  
   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

Subtotal

    29,476,437       1.83       6.01       24,414,361       1.85       5.42       21,531,039       1.24       5.31  

Others

 

Total shareholders’ equity

    38,464,863       —         7.84       35,690,200       —         7.90       34,785,839       —         8.58  
 

Allowances

    873,017       —         0.18       750,262       —         0.17       829,075       —         0.20  
 

Others

    86,839,627       —         17.70       76,643,695       —         16.97       63,855,888       —         15.75  
   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

Subtotal

    126,177,507       —         25.72       113,084,157       —         25.04       99,470,802       —         24.53  
   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

Total

    490,523,519       —         100.00       451,499,521       —         100.00       405,435,867       —         100.00  
   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

 

Note:

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


Table of Contents

2.2.2. Uses of Funds

 

                     (Unit: in millions of Won)  
         For the year ended December 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     5,939,242       1.51       1.21       4,817,024       1.43       1.07       6,757,757       1.44       1.67  
   Securities     103,204,928       2.31       21.04       95,395,973       2.84       21.13       80,406,670       1.81       19.83  
   Loans     287,653,938       3.45       58.64       269,569,916       3.43       59.71       247,117,982       3.28       60.95  
   Guarantee payments under payment guarantee     8,803       0.98       —         8,206       1.87       —         17,008       0.66       —    
  

Call loan

    640,485       1.69       0.13       632,317       1.48       0.14       315,950       1.28       0.08  
  

Private placement corporate bonds

    1,319,460       3.61       0.27       1,452,396       3.44       0.32       1,801,681       4.00       0.44  
   Credit cards     17,945,697       7.92       3.66       16,722,691       8.15       3.70       14,877,741       8.32       3.67  
   Others     3,874,774       4.93       0.79       4,209,878       4.08       0.93       4,123,143       3.87       1.02  
   Allowance     (2,406,757     —         (0.49     (2,434,872     —         (0.54     (2,116,366     —         (0.52
    

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

Subtotal

       418,180,570       3.36       85.25       390,373,529       3.49       86.46       353,301,566       3.15       87.14  
    

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

Foreign Currency

  

Due from banks

    4,782,706       1.44       0.98       3,666,805       1.36       0.81       2,862,165       1.06       0.71  
   Securities     13,323,102       4.35       2.72       12,704,025       2.47       2.81       10,013,637       3.19       2.47  
  

Loans

    11,384,009       3.04       2.32       8,050,597       2.96       1.78       7,136,381       2.29       1.76  
  

Call loan

    2,444,020       2.59       0.50       2,553,987       2.38       0.57       2,909,920       1.53       0.72  
  

Bills bought

    2,944,008       2.66       0.60       4,113,332       1.93       0.91       3,166,307       1.51       0.78  
  

Allowance

    (180,649     —         (0.04     (262,835     —         (0.06     (173,771     —         (0.04
  

Others

    660,572       —         0.13       153,277       —         0.03       72,297       —         0.01  
    

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

Subtotal

    35,357,768       3.28       7.21       30,979,188       2.41       6.85       25,986,936       2.35       6.41  
 

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

Others

  

Cash

    1,763,413       —         0.36       1,769,656       —         0.39       1,726,448       —         0.43  
  

Fixed assets held for business

    7,398,134       —         1.51       5,639,374       —         1.25       5,826,159       —         1.44  
  

Others

    27,823,634       —         5.67       22,737,774       —         5.05       18,594,758       —         4.58  
    

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

Subtotal

    36,985,181       —         7.54       30,146,804       —         6.69       26,147,365       —         6.45  
 

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

Total

    490,523,519       —         100.00       451,499,521       —         100.00       405,435,867       —         100.00  
 

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

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


Table of Contents
2.3.

Other Information to Consider in Making an Investment Decision

2.3.1. Capital Adequacy

 

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

As of December 31, 2018

   As of December 31, 2017  

Total Capital (A)

     36,995      34,476      32,402  

Risk-weighted assets (B)

     255,549      236,099      212,777  

BIS ratio (A/B)

     14.48%      14.60%      15.23%  

 

Note:

Calculated in accordance with Basel III.

 

Kookmin Bank           (Unit: in billions of Won)  
    

As of December 31, 2019

   As of December 31, 2018      As of December 31, 2017  

Total capital (A)

   29,810      27,694        25,914  

Risk-weighted assets (B)

   188,075      178,433        161,825  

BIS ratio (A/B)

   15.85%      15.52%        16.01%  

 

Note:

Calculated in accordance with Basel III.

 

KB Securities                (Unit: in billions of Won)  
    

As of December 31, 2019

  

As of December 31, 2018

    

As of December 31, 2017

 

Net operating capital (A)

   3,170      2,969        3,211  

Total amount at risk (B)

   1,561      1,251        1,048  

Maintenance equity margin (C)

   134      134        134  

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

   1,198.74%      1,278.45%        1,609.03%  

Capital surplus (A-B)

   1,609      1,718        2,163  

 

KB Insurance                  (Unit: in billions of Won)  
    

As of December 31, 2019

    

As of December 31, 2018

    

As of December 31, 2017

 

Available capital (A)

     3,657        3,333        3,080  

Required capital (B)

     1,941        1,782        1,618  

RBC ratio (A/B)

     188.5%        187.1%        190.3%  

 

Note:

RBC ratio: Risk-Based Capital ratio.


Table of Contents

2.3.2. Overseas Credit Ratings

 

          (As of December 31, 2019)
Rating Company    Moody’s    S&P
Type    Long-term    Short-term    Long-term    Short-term
Credit Rating    A1    P-1    A    A-1

2.3.3. Domestic Credit Ratings

 

Date of Rating

  

Type

  

Credit Rating

  

Rating Company

(Rating Range)

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)

4/8/2019    Contingent Convertible Bonds    AA-   

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

NICE Investors Service (AAA ~ D)

6/18/2019    Debentures    AAA   

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

NICE Investors Service (AAA ~ D)

6/26/2019    Commercial Paper    A1   

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

NICE Investors Service (A1 ~ D)

10/14/2019    Debentures    AAA   

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

NICE Investors Service (AAA ~ D)

12/3/2019    Debentures    AAA   

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

NICE Investors Service (AAA ~ D)


Table of Contents

2.3.4. Early Retirement Program

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

 

Date of retirement

 

Number of retired persons

January 20, 2020   462

2.3.5. Acquisition of Shares of Bank Bukopin of Indonesia and PRASAC Microfinance Institution Limited of Cambodia

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%   116,422(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 3,348 million paid in connection with the acquisition.

On January 6, 2020, Kookmin Bank entered into a shareholders’ agreement with the shareholders of PRASAC Microfinance Institution Limited (“PRASAC”), a provider of microfinance and deposit-taking services in Cambodia, to acquire 70% of PRASAC’s total number of shares issued for USD 603 million. The consummation of this acquisition is subject to approval from the financial authorities in Korea and abroad. A put option may be exercised by PRASAC’s current shareholders to sell the remaining 30% of PRASAC’s shares to Kookmin Bank. The exercise price of such put option will be determined based on the adjusted book value of PRASAC as of December 31, 2021 as reflected in the audit report of PRASAC’s financial statements as of and for the year ended December 31, 2021, and such put option may be exercised during the six months following the date of such audit report.


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

Cash and due from financial institutions

     20,837,878       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

     53,549,086       50,987,847       —    

Derivative financial assets

     3,190,673       2,025,962       3,310,166  

Loans at amortized cost

     339,684,059       319,201,603       290,122,838  

Financial investments

     71,782,606       61,665,094       66,608,243  

Investments in associates and joint ventures

     598,240       504,932       335,070  

Property and equipment

     5,067,377       4,272,127       4,201,697  

Investment property

     2,827,988       2,119,811       848,481  

Intangible assets

     2,737,813       2,755,783       2,943,060  

Net defined benefit assets

     946       —         894  

Current income tax assets

     19,095       10,004       6,324  

Deferred income tax assets

     3,597       4,158       3,991  

Assets held for sale

     23,151       16,952       155,506  

Other assets

     18,215,608       15,749,535       16,204,169  
  

 

 

   

 

 

   

 

 

 

Total assets

     518,538,117       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

     15,368,153       15,326,859       —    

Derivative financial liabilities

     3,007,341       2,901,247       3,142,765  

Deposits

     305,592,771       276,770,449       255,800,048  

Debts

     37,818,860       33,004,834       28,820,928  

Debentures

     50,935,583       53,278,697       44,992,724  

Provisions

     527,929       525,859       568,033  

Net defined benefit liabilities

     253,989       262,213       154,702  

Current income tax liabilities

     432,431       698,634       433,870  

Deferred income tax liabilities

     777,793       492,534       533,069  

Insurance contract liabilities

     34,966,683       33,412,949       31,801,275  

Other liabilities

     29,737,259       27,200,996       24,470,308  
  

 

 

   

 

 

   

 

 

 

Total liabilities

     479,418,792       443,875,271       402,740,780  

Equity attributable to shareholders of the parent company

     38,533,918       35,703,916       34,038,685  

Share capital

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

Hybrid financial instrument

     399,205       —         —    

Capital surplus

     17,122,777       17,121,660       17,122,228  

Accumulated other comprehensive income

     348,021       177,806       537,668  

Retained earnings

     19,709,545       17,282,441       15,044,204  

Treasury shares

     (1,136,188     (968,549     (755,973

Non-controlling interests

     585,407       9,111       6,144  
  

 

 

   

 

 

   

 

 

 

Total equity

     39,119,325       35,713,027       34,044,829  
  

 

 

   

 

 

   

 

 

 

Total liabilities and equity

     518,538,117       479,588,298       436,785,609  
  

 

 

   

 

 

   

 

 

 


Table of Contents
Note:

The consolidated financial information for the year ended December 31, 2019 is based on K-IFRS 1116 and the corresponding financial information for the years ended December 31, 2017 and 2018 has not been restated. In addition, the consolidated financial information for the years ended December 31, 2018 and 2019 is based on K-IFRS 1109 and 1115 and the corresponding financial information for the year ended December 31, 2017 has not been restated.

3.1.2. Consolidated Statements of Comprehensive Income

 

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

Net interest income

     9,196,787       8,904,928       8,246,614  

Net fee and commission income

     2,355,004       2,243,376       2,050,024  

Net insurance income

     299,512       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

     643,872       351,303       —    

Net other operating expenses

     (1,063,324     (1,130,036     (901,890

General and administrative expenses

     (6,271,017     (5,918,512     (5,628,664

Operating profit before provision for credit losses

     5,160,834       4,941,175       4,563,518  

Provision for credit losses

     (670,185     (673,694     (548,244

Net operating income

     4,490,649       4,267,481       4,015,274  

Net non-operating income (loss)

     43,337       34,051       123,150  

Profit before income tax

     4,533,986       4,301,532       4,138,424  

Income tax expense

     (1,220,787     (1,239,586     (794,963

Profit for the period

     3,313,199       3,061,946       3,343,461  

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

     152,023       (10,482     136,226  
  

 

 

   

 

 

   

 

 

 

Total comprehensive income for the period

     3,465,222       3,051,464       3,479,687  
  

 

 

   

 

 

   

 

 

 

Profit attributable to:

     3,313,199       3,061,946       3,343,461  

Shareholders of the parent company

     3,311,828       3,061,191       3,311,438  

Non-controlling interests

     1,371       755       32,023  
  

 

 

   

 

 

   

 

 

 

Total comprehensive income for the period attributable to:

     3,465,222       3,051,464       3,479,687  
  

 

 

   

 

 

   

 

 

 

Shareholders of the parent company

     3,463,567       3,050,805       3,445,285  

Non-controlling interests

     1,655       659       34,402  

Earnings per share

      

Basic earnings per share (Won)

     8,451       7,721       8,305  

Diluted earnings per share (Won)

     8,389       7,676       8,257  

 

Note:

The consolidated financial information for the year ended December 31, 2019 is based on K-IFRS 1116 and the corresponding financial information for the years ended December 31, 2017 and 2018 has not been restated. In addition, the consolidated financial information for the years ended December 31, 2018 and 2019 is based on K-IFRS 1109 and 1115 and the corresponding financial information for the year ended December 31, 2017 has not been restated.


Table of Contents
3.2.

Separate Financial Information

3.2.1. Separate Statements of Financial Position

 

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

Cash and due from financial institutions

     18,537       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

     413,909       289,179       —    

Loans at amortized cost

     120,000       50,000       10,000  

Investments in subsidiaries

     24,162,116       24,062,116       24,062,116  

Property and equipment

     4,170       2,185       697  

Intangible assets

     11,092       9,646       8,864  

Net defined benefit assets

     —         —         201  

Deferred income tax assets

     7,526       8,184       10,282  

Other assets

     609,286       857,462       480,789  
  

 

 

   

 

 

   

 

 

 

Total assets

     25,346,636       25,623,074       25,102,834  
  

 

 

   

 

 

   

 

 

 

Debts

     —         300,000       300,000  

Debentures

     5,543,446       5,373,266       5,162,600  

Net defined benefit liabilities

     437       183       —    

Current income tax liabilities

     417,414       691,909       308,854  

Other liabilities

     203,440       186,481       204,835  
  

 

 

   

 

 

   

 

 

 

Total liabilities

     6,164,737       6,551,839       5,976,289  
  

 

 

   

 

 

   

 

 

 

Share capital

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

Hybrid financial instrument

     399,085       —         —    

Capital surplus

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

Accumulated other comprehensive loss

     (7,664     (7,144     (5,233

Retained earnings

     3,093,294       3,213,556       3,054,379  

Treasury Shares

     (1,136,188     (968,549     (755,973
  

 

 

   

 

 

   

 

 

 

Total equity

     19,181,899       19,071,235       19,126,545  
  

 

 

   

 

 

   

 

 

 

Total liabilities and equity

     25,346,636       25,623,074       25,102,834  
  

 

 

   

 

 

   

 

 

 

 

Note:

The separate financial information for the year ended December 31, 2019 is based on K-IFRS 1116 and the corresponding financial information for the years ended December 31, 2017 and 2018 has not been restated. In addition, the separate financial information for the years ended December 31, 2018 and 2019 is based on K-IFRS 1109 and 1115 and the corresponding financial information for the year ended December 31, 2017 has not been restated.


Table of Contents

3.2.2. Separate Statements of Comprehensive Income

 

(Unit: in millions of Won, except per share amounts)

 
     For the year ended
December 31, 2019
    For the year ended
December 31, 2018
    For the year ended
December 31, 2017
 

Net interest expense

     (118,045     (115,835     (97,218

Net fee and commission expense

     (6,283     (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

     15,947       18,319       —    

Net other operating income

     926,934       1,089,556       709,544  

General and administrative expenses

     (71,171     (57,845     (57,485

Operating profit before provision for credit losses

     747,382       928,987       547,778  

Provision for credit losses

     —         —         —    

Operating profit

     747,382       928,987       547,778  

Net non-operating expense

     (541     (259     125  

Profit before income tax

     746,841       928,728       547,903  

Income tax benefit (expense)

     (854     (2,823     5,522  

Profit for the period

     745,987       925,905       553,425  

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

     (520     (1,911     (491
  

 

 

   

 

 

   

 

 

 

Total comprehensive income for the period

     745,467       923,994       552,934  
  

 

 

   

 

 

   

 

 

 

Earnings per share

      

Basic earnings per share (Won)

     1,891       2,335       1,388  

Diluted earnings per share (Won)

     1,877       2,322       1,380  

 

Note:

The separate financial information for the year ended December 31, 2019 is based on K-IFRS 1116 and the corresponding financial information for the years ended December 31, 2017 and 2018 has not been restated. In addition, the separate financial information for the years ended December 31, 2018 and 2019 is based on K-IFRS 1109 and 1115 and the corresponding financial information for the year ended December 31, 2017 has not been restated.


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3.3.

Other Selected Financial Data

3.3.1. Won-denominated Liquidity Ratio

 

     (Unit: in millions of Won)  

Category

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

Current assets in Won (A)

     142,683       30,150       47,253  

Current liabilities in Won (B)

     110,398       9,300       6,792  

Liquidity ratio (A/B)

     129.24     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 year ended
December 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)

     0.66      0.66    0.82

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

     8.93      8.82    10.18

 

Note:

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


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3.3.3. 20 Largest Exposures of Kookmin Bank by Borrower (As of December 31, 2019)

 

     (Unit: in billions of Won)  

Company

   Credit extended  

Samsung Electronics Co., Ltd.

     1,315  

Hyundai Motor Company

     1,201  

Korea Securities Finance Corp.

     1,010  

Hyundai Steel Co., Ltd.

     976  

NH Investment & Securities Co., Ltd

     773  

LG Display Co., Ltd.

     760  

Hyundai Capital Services, Inc.

     719  

LG Electronics Inc.

     692  

S-OIL Corporation

     668  

GS Caltex Corporation

     631  

Hyundai Heavy Industries Co., Ltd.

     501  

SK Energy Co., Ltd.

     479  

KT Corporation

     456  

Samsung Heavy Industries Co., Ltd.

     448  

CJ Cheiljedang Corp.

     442  

LS-Nikko Copper Inc

     441  

SK Holdings

     425  

KB Kookmin Card Co., Ltd.

     421  

Kia Motors Corporation

     394  

Hanwha Solutions/Chemical Corporation

     365  
  

 

 

 

Total

     13,117  
  

 

 

 


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3.3.4. 10 Largest Exposures of Kookmin Bank by Chaebol Group (As of December 31, 2019)

 

     (Unit: in billions of Won)  

Group

   Credit extended  

Hyundai Motor

     4,768  

Samsung

     3,380  

SK

     2,472  

Lotte

     2,192  

LG

     2,168  

Hanwha

     1,696  

GS

     1,073  

CJ

     829  

Shinsegae

     804  

LS

     789  
  

 

 

 

Total

     20,171  
  

 

 

 

3.3.5. Kookmin Bank’s Loan Concentration by Industry (As of December 31, 2019)

 

     (Unit: in billions of Won, %)  

Industry

   Total
Credit
     Percentage of
Total Credit
 

Manufacturing

     45,012        32.0  

Real estate

     31,054        22.1  

Retail and wholesale

     19,997        14.2  

Hotel, lodging and food services

     8,926        6.3  

Construction

     3,194        2.3  

Financial institutions

     2,891        2.1  

Others

     29,520        21.0  
  

 

 

    

 

 

 

Total

     140,594        100.0  
  

 

 

    

 

 

 


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3.3.6. Top 20 Non-Performing Loans of Kookmin Bank (As of December 31, 2019)

 

          (Unit: in billions of Won)  

Borrower

  

Industry

   Total Credit      Allowance
for Loan Losses
 

Borrower A

   Construction      59        55  

Borrower B

   Shipbuilding      51        16  

Borrower C

   Construction      40        40  

Borrower D

   Shipping      24        23  

Borrower E

   Construction      21        21  

Borrower F

   Retail and wholesale      16        9  

Borrower G

   Manufacturing      13        6  

Borrower H

   Retail and wholesale      10        8  

Borrower I

   Manufacturing      10        9  

Borrower J

   Shipbuilding      9        2  

Borrower K

   Manufacturing      9        3  

Borrower L

   Manufacturing      9        1  

Borrower M

   Manufacturing      6        5  

Borrower N

   Hotel, lodging and food services      6        1  

Borrower O

   Shipping      6        5  

Borrower P

   Manufacturing      6        2  

Borrower Q

   Manufacturing      6        4  

Borrower R

   Construction      5        5  

Borrower S

   Health and social services      5        1  

Borrower T

   Manufacturing      5        2  
     

 

 

    

 

 

 

Total

        316        218  
     

 

 

    

 

 

 

 

3.4.

Other Financial Information

See the Company’s Form 6-K furnished to the Securities and Exchange Commission on March 6, 2020 (available on www.sec.gov), which contains the Company’s audited consolidated and separate financial statements as of and for the years ended December 31, 2019 and 2018 and related notes, which have been prepared in accordance with K-IFRS. The Company’s audited consolidated and separate financial statements are also available on its website, www.kbfg.com.


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4.

Independent Public Accountants

 

4.1.

Audit / Review Services

 

(Unit: in millions of Won)  

Period

  

Auditor

  

Activity

   Compensation(1)      Accrued Time
(hours)
 

January 1 to December 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        10,832  

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)

On an annual basis and excluding value-added taxes.

 

4.2.

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

 

(Unit: in millions of Won)  

Period

  

Auditor

  

Activity

  

Service Period

   Compensation(1)  

January 1 to December 31, 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)

On an annual basis and excluding value-added taxes.


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4.3.

Change in Auditor

Pursuant to the Act on External Audit of Stock Companies and the related regulations thereunder, the Securities and Futures Commission of the Financial Services Commission designated KPMG Samjong Accounting Corp. as the Company’s new external auditor for the fiscal years ending December 31, 2020, 2021 and 2022. As such, starting with the fiscal year ending December 31, 2020, the external auditor for the Company and its subsidiaries will be changed from Samil PricewaterhouseCoopers to KPMG Samjong Accounting Corp.


Table of Contents
5.

Corporate Governance and Affiliated Companies

 

5.1.

Board of Directors & Committees under the Board

As of December 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:

 

   

Risk Management Committee;

 

   

Evaluation & Compensation Committee;

 

   

Non-Executive Director Nominating Committee;

 

   

Audit Committee Members Nominating Committee;

 

   

CEO Nominating Committee;

 

   

Audit Committee; and

 

   

Subsidiaries’ CEO Director 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. The following table shows a list of audit committee requirements under Articles 415 and 542 of the Commercial Act and how we fulfill each requirement as of December 31, 2019.

 

The Commercial Act Requirements

  

KB Financial Group

The Audit Committee must consist of three or more directors.

  

We have four Audit Committee members.

At least two-thirds of the Audit Committee Members must be non-executive directors.

  

All four Audit Committee members, including the chairman of the committee, are non-executive directors.

 

The chairman of the Audit Committee must be a non-executive director.

At least one Audit Committee member must be an accounting or financial expert.

  

Two Audit Committee members (Suk Ho Sonu and Kyung Ho Kim) are accounting or financial experts.


Table of Contents
5.3.

Compensation to Directors

5.3.1. Total Amount of Compensation Approved at the Annual General Meeting of Shareholders

 

(Unit: in millions of Won)  
     Total number of persons(1)      Total compensation approved at shareholders’ meeting(2)    Notes  

Registered Directors

(Non-executive directors)

     9 (7)      2,500      —    

 

(1)

Represents the total number of applicable persons as of December 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 of Compensation Paid

 

(For the year ended December 31, 2019)    (Unit: in millions of Won)

Total number of persons(1)

  

Total payment(2)(3)

  

Average payment per person(4)

   Notes

9

   2,223    247    —  

 

(1)

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

(2)

Represents the total amount paid (rounded to the nearest million) for the year ended December 31, 2019.

(3)

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

(4)

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

*Jongsoo Han retired 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.


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5.3.3. Compensation Breakdown

 

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

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

     2        1,595        797        —    

Non-executive Directors (excluding Audit Committee members)

     3        262        87        —    

Audit Committee members

     4        366        91        —    

Internal Auditor

     —          —          —          —    

 

(1)

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

(2)

Represents the total amount paid (rounded to the nearest million) for the year ended December 31, 2019.

(3)

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

(4)

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


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5.4.

Highest-Paid Individuals

5.4.1 Compensation exceeding Won 500 million – Individual basis

 

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

Name

  

Position

  

Total Amount

    

Deferred Compensation(1)

Jong Kyoo Yoon    Chairman & CEO      1,595     

-  Deferred short-term performance-based payment, the amount of which corresponds to 3,766 shares remaining under, and pursuant to, a performance evaluation in 2018.

-  Deferred long-term performance-based payment, the amount of which corresponds to 12,018 shares remaining under, and pursuant to, a performance evaluation over a three-year period from November 21, 2014 to November 20, 2017.

-  Long-term performance-based payment, the amount of which corresponds to a maximum of 46,890 shares (15,630 shares per year) pursuant to a performance evaluation over a three-year period from November 21, 2017 to November 20, 2020.

Chang Kwon Lee    Deputy President      576     

-  Deferred short- and long-term performance-based payment, the amount of which corresponds to 3,895 shares remaining under, and pursuant to, a performance evaluation from 2017 to 2018.

Kyung Yup Cho

   Deputy President      557     

-  Deferred short- and long-term performance-based payment, the amount of which corresponds to 11,770 shares remaining under, and pursuant to, a performance evaluation in 2015 and from 2017 to 2018.

Young Hyuk Jo

   Deputy President      504     

-  Deferred short- and long-term performance-based payment, the amount of which corresponds to 3,268 shares remaining under, and pursuant to, a performance evaluation from 2017 to 2018.

 

(1) 

The actual payment amount will be finalized based on the market value of our shares at the time of payment.


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5.4.2 Calculation criteria and method of compensation

 

                (Unit: in millions of Won)

Name

  

Compensation
Type

  

Classification

  

Total

Compensation
(in millions of Won)

    

Calculation Criteria and Method

Jong Kyoo Yoon    Earned income    Salary      800      A monthly salary was paid in even installments each month in accordance with the amount of annual salary determined by a resolution of the Evaluation & Compensation Committee within the limit of the total amount of compensation approved at the shareholders’ meeting. (This amount includes allowances for business expenses of Won 350 million.)
     

Bonus

     795     

The bonus paid in 2019 was Won 795 million, of which (i) Won 267 million was paid as short-term performance-based compensation pursuant to a performance evaluation for 2018 (based on the resolution of the Evaluation & Compensation Committee), consisting of Won 177 million paid as an upfront lump sum payment and Won 90 million (representing 1,883 shares) paid as the first installment of deferred payments and (ii) Won 528 million (representing 12,018 shares) was paid as the second installment of long-term performance-based compensation pursuant to a performance evaluation over a three-year period from November 21, 2014 to November 20, 2017 (based on the resolution of the Evaluation & Compensation Committee).

 

The short-term performance evaluation index for 2018 comprised financial results (e.g., ROE, total operating income, RAROC, CIR, real NPL ratio, Tier 1 ratio, net increase in the number of cross-selling customers among subsidiaries) and results relating to strategic initiatives (e.g., securing structural competitive advantage by facilitating innovation of the Company’s business model and enhancing customer-oriented services and processes, strengthening the overall position of the Company, implementing the “One-Firm KB” policy). The amount of the short-term incentive payment is determined by the Evaluation & Compensation Committee based on the aggregate score of the index items above and is within the range of 0%-100% of the base salary.


Table of Contents
           

 

With respect to financial results, although the Company’s net profit for 2018 decreased 7.6% YoY due to, among others, increased early retirement program costs and decreased profits in the insurance segment, improvements in asset quality (improvement in real NPL ratio from 1.19% in 2017 to 1.01% in 2018) and cost efficiency (improvement in CIR from 55.2% in 2017 to 54.5% in 2018), as well as a strengthening of risk management abilities demonstrated by loan growth in prime assets (an increase in loan balance from Won 235 trillion in 2017 to Won 257 trillion in 2018) were considered, among others, to be major achievements reflected in the performance evaluation.

 

With respect to non-financial results, the major achievements considered included securing a competitive advantage in the Company’s core businesses through an increase in market shares, broadening the Company’s overall customer base and expanding into global markets, as well as strengthening the Company’s overall capabilities and reinforcing the “One-Firm KB” policy through key improvements in areas of operational management, risk management and compliance.

      Stock options      —       

Not applicable

      Other earned income      —       

Not applicable

   Retirement income         —       

Not applicable

   Other income         —       

Not applicable

Chang Kwon Lee    Earned income    Salary      220      A monthly salary was paid in even installments each month in accordance with the amount of annual salary determined pursuant to internal policy regarding executive officers based on position and responsibilities.


Table of Contents
     

Bonus

     347     

The bonus paid in 2019 was Won 347 million, of which (i) Won 326 million was paid as short- and long-term performance-based compensation pursuant to a performance evaluation for 2018 and over the period from 2017 to 2018 (based on the resolution of the Evaluation & Compensation Committee), consisting of Won 244 million paid as an upfront lump sum payment and Won 82 million (representing 1,726 shares) paid as the first installment of deferred payments and (ii) Won 21 million (representing 439 shares) was paid as the second installment of short-term performance-based compensation pursuant to a performance evaluation for 2017 (based on the resolution of the Evaluation & Compensation Committee).

 

The short-term performance evaluation index for 2018 included financial results of the Company’s financial performance as well as non-financial results relating to various responsibilities that pertain to the executive officer’s position of a chief strategy officer. The amount of the short-term incentive payment is determined by the Evaluation & Compensation Committee based on the aggregate score of the index items above and is within the range of 0%-120% of the base salary.

 

With respect to financial results, improvements in asset quality and cost efficiency, and loan growth in prime assets were considered to be major achievements. With respect to non-financial results, major achievements included strengthening the competitiveness of the Company’s core businesses for increased market shares and establishing an operational management system for reinforcing the “One-Firm KB” policy.

 

The long-term performance evaluation index for the period from 2017 to 2018 included relative total shareholder return, the Company’s financial results and results relating to the executive officer’s roles and responsibilities. The long-term performance-based compensation is calculated within the range of 0%-100% of the base salary.

 

With respect to the relative total shareholder return, the Company’s stock performance, which outperformed the industry average during the period from January 1, 2017 to December 31, 2018, was considered. With respect to the Company’s financial results and results relating to the executive officer’s roles and responsibilities, the annual evaluation results over the two-year period from 2017 to 2018 were considered.


Table of Contents
      Stock options      —       

Not applicable

      Other earned income      9     

Welfare benefits

   Retirement income      —       

Not applicable

   Other income      —       

Not applicable

Kyung Yup Cho

   Earned income   

Salary

     250      A monthly salary was paid in even installments each month in accordance with the amount of annual salary determined pursuant to internal policy regarding executive officers based on position and responsibilities.
     

Bonus

     281     

The bonus paid in 2019 was Won 281 million, of which (i) Won 126 million was paid as short-term performance-based compensation pursuant to a performance evaluation for 2018 (based on the resolution of the Evaluation & Compensation Committee), consisting of Won 94 million paid as an upfront lump sum payment and Won 32 million (representing 666 shares) paid as the first installment of deferred payments and (ii) Won 155 million (representing 3,255 shares) was paid as deferred short- and long-term performance-based compensation pursuant to a performance evaluation over the period from 2016 to 2017 (based on the resolution of the Evaluation & Compensation Committee).

 

The short-term performance evaluation index for 2018 included the financial results of the Company’s financial performance as well as non-financial results relating to various responsibilities that pertain to the executive officer’s position as the deputy president of KB Research. The amount of the short-term incentive payment is determined by the Evaluation & Compensation Committee based on the aggregate score of the index items above and is within the range of 0%-120% of the base salary.

 

With respect to financial results, improvements in asset quality and cost efficiency, and loan growth in prime assets were considered to be major achievements. With respect to non-financial results, major achievements included contributing to the Company’s sustainable management initiatives through conducting relevant research.


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      Stock options    —     

Not applicable

      Other earned income    26   

Welfare benefits

  

Retirement income

   —     

Not applicable

  

Other income

   —     

Not applicable

Young Hyuk Jo

   Earned income   

Salary

   250    A monthly salary was paid in even installments each month in accordance with the amount of annual salary determined pursuant to internal policy regarding executive officers based on position and responsibilities.
     

Bonus

   245   

The bonus paid in 2019 was Won 245 million, of which (i) Won 120 million was paid as short-term performance-based compensation pursuant to a performance evaluation for 2018 (based on the resolution of the Evaluation & Compensation Committee), consisting of Won 90 million paid as an upfront lump sum payment and Won 30 million (representing 636 shares) paid as the first installment of deferred payments and (ii) Won 125 million (representing 2,611 shares) was paid as deferred short- and long-term performance-based compensation pursuant to a performance evaluation over the period from 2016 to 2017 (based on the resolution of the Evaluation & Compensation Committee).

 

The short-term performance evaluation index for 2018 consisted of non-financial results pertaining to the executive officer’s responsibility as the deputy president of the audit department to efficiently conduct internal audit and establish a transparent internal control environment. The amount of the short-term incentive payment is determined by the Audit Committee and the Evaluation & Compensation Committee based on the aggregate score of the index items above and is within the range of 0%-120% of the base salary.


Table of Contents
           

 

With respect to non-financial results, major achievements included establishing an internal control environment within the Company and contributing to stable management results by reinforcing stronger standards for audits conducted by external auditors and by implementing improvements for internal control, as well as effectively responding to audit probes and regulatory policies through proactive outreach efforts.

      Stock options    —     

Not applicable

      Other earned income    9   

Welfare benefits

  

Retirement income

   —     

Not applicable

  

Other income

   —     

Not applicable


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5.5.

Affiliated Companies

5.5.1. List of Affiliated Companies

Affiliated companies of KB Financial Group that are first-tier subsidiaries and KB Financial Group’s ownership of such companies as of December 31, 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%)


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6.

Directors, Senior Management and Employees

 

6.1.

Executive Directors

As of March 30, 2020, we had one executive director. The name, position and the end of the term of our executive director and the number of shares of our common stock he owned as of December 31, 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 30, 2020, 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 December 31, 2019 are set forth below.

 

Name

  

Date of Birth

  

Position

  

Common Shares Owned

  

End of Term

Yin Hur

   December 1961    Non-standing Director    7,500    November 20, 2020

 

6.3.

Non-executive Directors

As of March 30, 2020, we had seven non-executive directors. The name, position and the end of the term of our non-executive directors and the number of shares of our common stock they respectively owned as of December 31, 2019 were as follows.

 

Name

  

Date of Birth

  

Position

  

Common Shares Owned

    

End of Term

Suk Ho Sonu

   September 1951    Non-executive Director      —        March 19, 2021

Stuart B. Solomon

   July 1949    Non-executive Director      —        March 19, 2021

Myung Hee Choi

   February 1952    Non-executive Director      —        March 19, 2021

Kouwhan Jeong

   September 1953    Non-executive Director      —        March 19, 2021

Kyung Ho Kim

   December 1954    Non-executive Director      —        March 26, 2021

Seon-joo Kwon

   November 1956    Non-executive Director      —        March 19, 2022

Gyutaeg Oh

   February 1959    Non-executive Director      —        March 19, 2022

As of March 30, 2020, the following non-executive director also served as a director at another company.

 

Name

  

Company

  

Position

  

Appointment Date

Kouwhan Jeong    Nambujeil Law and Notary Office Inc.   

Co-president Attorney at Law

   May 2016


Table of Contents
6.4.

Senior Management

Members of our senior management as of March 30, 2020 are as follows. The number of common shares owned is as of December 31, 2019.

 

Name

  

Date of Birth

  

Position

   Common Shares Owned    

End of Term

Chang Kwon Lee

   November 1965    Deputy President, Chief Strategy Officer and Head of Global Business Unit      500     December 31, 2020

Ki-Hwan Kim

   March 1963    Deputy President and Chief Finance Officer      1,541     December 31, 2020

Nam Jong Seo

   June 1963    Deputy President and Chief Risk Management Officer      119     December 31, 2021

Pil Kyu Im

   March 1964    Deputy President and Chief Human Resources Officer      1,005     December 31, 2020

Kyung Yup Cho

   September 1961    Deputy President; KB Research      1,500     December 31, 2020

Young Hyuk Jo

   April 1963    Deputy President; Audit Department      961     December 31, 2020

Nam Hoon Cho

   June 1968    Senior Managing Director and Chief Global Strategy Officer      1,000     December 31, 2020

Chan Il Park

   March 1963    Managing Director and Chief Compliance Officer      1,129     December 31, 2020

Seok Mun Choi

   August 1968    Managing Director and Head of Office of Board of Directors      654     December 31, 2021

Soon Bum Kwon

  

October 1966

   Managing Director      1,390     December 31, 2020

Jeong Rim Park

  

November 1963

   Head of Capital Market Business Unit      3,150     December 31, 2020

Sung Hyun Kim

  

August 1963

   Head of Corporate and Investment Banking Business Unit      10,468     December 31, 2020

Jong Hee Yang

  

June 1961

   Head of Insurance Business Unit      914     December 31, 2020

Dong Cheol Lee

  

October 1961

   Head of Retail Customer Business Unit      2,065     December 31, 2020

Young Gil Kim

  

January 1963

   Head of Wealth Management Business Unit      152     December 31, 2020

Woon Tae Kim

  

May 1963

   Head of Small and Medium Enterprise Business Unit      —       December 31, 2020

Mun-Cheol Jeong

  

August 1968

   Chief Public Relation Officer      509     December 31, 2020

Dong Whan Han

  

January 1965

   Chief Digital Innovation Officer      1,100     December 31, 2020

Woo Yeul Lee

  

November 1964

   Chief Information Technology Officer      1,193     December 31, 2020

Jin Soo Yoon

  

February 1964

   Chief Data Officer      —       March 31, 2021

Sang-Hyeon Woo

  

February 1964

   Corporate and Investment Banking Business Unit      348     December 31, 2020

Jeong Ha

  

January 1967

   Capital Market Business Unit      —       December 31, 2020

Chai Hyun Sung

  

September 1965

   Retail Customer Business Unit      2,432     December 31, 2020

Yun Sang Song

  

July 1964

   Insurance Business Unit      —       December 31, 2020

Jae Young Choi

  

June 1967

   Head of Pension Business Division      652     May 26, 2021

Jin Gyu Maeng

  

January 1966

   General Manager of Planning and Coordination Office      691     December 31, 2020


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As of March 30, 2020, the following management 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

Sung Hyun Kim

   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

Young Gil Kim

   Kookmin Bank    Senior Executive Vice President; Wealth Management Group    January 2020
   KB Securities    Deputy President; Wealth Management Division    January 2019

Woon Tae Kim

   Kookmin Bank    Senior Managing Director; Small and Medium Enterprise Group    January 2020

Mun-Cheol Jeong

   Kookmin Bank    Managing Director; Brand·ESG Group    January 2020

Dong Whan Han

   Kookmin Bank    Senior Executive Vice President; Digital Finance Group    January 2020

Woo Yeul Lee

   Kookmin Bank    Senior Executive Vice President; Information Technology Group    January 2020

Jin Soo Yoon

   Kookmin Bank    Senior Managing Director; Data Strategy Group    April 2019
   KB Kookmin Card    Senior Managing Director; Data Strategic Division    April 2019

Sang-Hyeon Woo

   Kookmin Bank    Senior Managing Director; Corporate Investment Banking Customer Group    January 2020
   KB Securities    Deputy President; Investment Banking Division    January 2020

Jeong Ha

   Kookmin Bank    Senior Managing Director; Capital Markets Group    January 2020

Chai Hyun Sung

   Kookmin Bank    Senior Executive Vice President; Retail Customer Group    January 2020

Yun Sang Song

   KB Life Insurance    Senior Managing Director; Strategy & Finance Planning Division    January 2020

Jae Young Choi

   Kookmin Bank    Head of Pension Business Division    May 2019
   KB Securities    Managing Director; Pension Business Division    January 2020
   KB Insurance    Managing Director; Pension Business Division    January 2020

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


Table of Contents
6.5.

Employees

The following table shows information regarding our employees and compensation paid to them as of December 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

   4 years (14 years and 6 months)(2)      23,854(3)      147(3)

 

(1)

Includes executive officers.

(2)

Includes tenure at our subsidiaries.

(3)

Includes retroactive payments of wage increases and bonuses from 2018. The average annual salary per person excluding such amounts is Won 137.6 million.

The following table shows information regarding our executive officers and compensation paid to them as of December 31, 2019.

 

(Unit: in millions of Won)

Number of Executive Officers(A)(1)

     Total Amount of Annual Salaries(B)     

Average Annual Salary per Person(B/A)

  9        3,442      382

 

(1)

Excludes twelve 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 December 31, 2019.

 

(Unit: shares, %)  

Name

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

Korean National Pension Service

     41,468,003        9.97  

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

     26,622,633        6.40  

 

(1)

Based on our shareholder registry as of December 31, 2019.

(2)

Based on 415,807,920 shares of our common stock issued as of December 31, 2019

(3)

Depositary under the Company’s ADR program. The voting rights are held by ADR holders.


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7.2.

Changes in the Largest Shareholder

 

(As of December 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, 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  

Korean National Pension Service

     December 31, 2019        41,468,003        9.97  

 

(1)

Total number of shares of common stock issued as of the following dates:

Prior to October 19, 2016: 386,351,693

From October 19, 2016 to December 12, 2019: 418,111,537

After December 12, 2019: 415,807,920

 

7.3.

Employee Stock Ownership Association

 

(As of December 31, 2019)    (Unit: shares)  

Company Name

   Number of Shares of
Common Stock Owned
 

KB Financial Group Inc.

     33,652  

Kookmin Bank

     4,146,652  

KB Securities Co., Ltd.

     18,595  

KB Insurance Co., Ltd.

     160,633  

KB Kookmin Card Co., Ltd.

     159,074  

KB Asset Management Co., Ltd.

     5,959  

KB Capital Co., Ltd.

     23,006  

KB Life Insurance Co., Ltd.

     8,216  

KB Real Estate Trust Co., Ltd.

     12,043  

KB Savings Bank Co., Ltd.

     2,993  

KB Investment Co., Ltd.

     980  

KB Data Systems Co., Ltd.

     9,866  

KB Credit Information Co., Ltd.

     6,987  
  

 

 

 

Total

     4,588,656  
  

 

 

 


Table of Contents
7.4.

Investments in Affiliated Companies

 

(As of December 31, 2019)           (Units: shares, %, millions of Won)  

Company Name

   Ending Balance      Total assets(1)      Net income (loss) (1)  
   Number of
shares owned
     Ownership      Book value  

Kookmin Bank

     404,379,116        100        14,821,721        387,425,038        2,439,079  

KB Securities Co., Ltd.

     298,620,424        100        3,342,391        47,816,512        257,893  

KB Insurance Co., Ltd.

     66,500,000        100        2,375,430        36,552,368        234,327  

KB Kookmin Card Co., Ltd.

     92,000,000        100        1,953,175        22,990,115        316,546  

KB Asset Management Co., Ltd.

     7,667,550        100        96,312        310,018        48,899  

KB Capital Co., Ltd.

     23,349,208        100        623,811        11,190,568        117,028  

KB Life Insurance Co., Ltd.

     91,200,000        100        485,314        9,801,904        15,963  

KB Real Estate Trust Co., Ltd.

     16,000,000        100        121,553        377,938        61,713  

KB Savings Bank Co., Ltd.

     8,001,912        100        157,544        1,361,031        16,301  

KB Investment Co., Ltd.

     22,525,328        100        154,910        756,972        11,311  

KB Data Systems Co., Ltd.

     800,000        100        6,334        27,834        (256

KB Credit Information Co., Ltd.

     1,252,400        100        23,621        41,690        4,664  
  

 

 

    

 

 

    

 

 

    

 

 

    

 

 

 

Total

     —          —          24,162,116        —          —    
  

 

 

    

 

 

    

 

 

    

 

 

    

 

 

 

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

 

7.5.

Related Party Transactions

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

 

                              (Unit: in billions of Won)

Issuer

  

Relationship

  

Type

  

Issue
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


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. 343 Private Placement of Capital Securities in Won    50    March 29, 2016    4.396%    March 29, 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. 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


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    2.195%(2)    July 12, 2020

 

(1)

Unsecured credit loans.

(2)

Changed from 2.150% to 2.195% upon extension of the loans on July 13, 2019.

 

                              (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    2.195%(2)    July 12, 2020

 

(1)

Unsecured credit loans.

(2)

Changed from 2.150% to 2.195% upon extension of the loans on July 13, 2019

 

                              (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.


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SIGNATURES

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

 

     

KB Financial Group Inc.

      (Registrant)

Date: March 30, 2020

     

By: /s/ Ki-Hwan Kim

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