SEC Form 6-K filed by KB Financial Group Inc

 

 

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 August 2024

Commission File Number: 000-53445

 

 

KB Financial Group Inc.

(Translation of registrant’s name into English)

 

 

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

(Address of principal executive office)

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

Form 20-F ☒   Form  40-F ☐

 

 

 

Index

1. Summary of the 2024 First Half Business Report

2. Exhibit 99.1 KB Financial Group Review Report for the First Half of 2024 (Consolidated)

3. Exhibit 99.2 KB Financial Group Review Report for the First Half of 2024 (Separate)

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
1.6.		Amendments to the Articles of Incorporation
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.		Top 5 Highest-Paid Individuals
5.5.		Stock-based Compensation
5.6.		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

Summary of 2024 First Half Business Report

On August 14, 2024, KB Financial Group Inc. (“KB Financial Group,” the “Company” or the “Group”) filed its business report for the first half of 2024 (the “Business Report”) with the Financial Services Commission of Korea and the Korea Exchange. This is a summary of the Business Report translated into English.

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

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

1. Introduction to the Company

1.1. Business Purpose

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

1.2. History

 

•

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

Changed the name of KB Venture Capital Co., Ltd. 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”)

 

•

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%

 

•

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 19, 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

 

•

February 28, 2020

Added KB-NAU Special Situation Corporate Restructuring Private Equity Fund as a second-tier subsidiary

 

•

April 10, 2020

Added PRASAC Microfinance Institution PLC. as a second-tier subsidiary

 

•

May 18, 2020

Added PT Sunindo Kookmin Best Finance as a second-tier subsidiary

 

•

July 3, 2020

Added PT KB Finansia Multi Finance as a second-tier subsidiary

•

August 31, 2020

Added Prudential Life Insurance Company of Korea, Ltd. (“Prudential Life Insurance”) as a first-tier subsidiary

 

•

September 2, 2020

Added PT Bank Bukopin Tbk as a second-tier subsidiary (renamed PT Bank KB Bukopin, Tbk. on February 8, 2021)

 

•

October 28, 2020

Added KB Material and Parts Private Equity Fund I as a second-tier subsidiary

 

•

December 4, 2020

Added FineKB Private Equity Fund I as a second-tier subsidiary

 

•

December 16, 2020

Added KB FINA JOINT STOCK COMPANY as a second-tier subsidiary

 

•

December 23, 2020

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

 

•

January 15, 2021

Added KB Bio Private Equity Fund III as a second-tier subsidiary

 

•

January 29, 2021

Added J Fintech Co., Ltd as a second-tier subsidiary (renamed KB J Capital Co., Ltd. on February 16, 2021)

 

•

March 2, 2021

Added PT KB Data Systems Indonesia as a second-tier subsidiary

 

•

September 23, 2021

Added KB Bio Global Expansion Private Equity Fund I as a second-tier subsidiary

 

•

October 8, 2021

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

 

•

December 24, 2021

Added KB Co-investment Private Equity Fund I as a second-tier subsidiary

 

•

February 14, 2022

Added PT KB Valbury Sekuritas as a second-tier subsidiary

 

•

April 22, 2022

Added KB-Badgers Future Mobility ESG Private Equity Fund I as a second-tier subsidiary

 

•

May 10, 2022

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

 

•

August 19, 2022

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

 

•

December 26, 2022

Added i-Finance Leasing Plc. as a second-tier subsidiary

 

•

December 26, 2022

Renamed Prudential Life Insurance Company of Korea, Ltd. to KB Life Insurance Co., Ltd.

 

•

January 1, 2023

Merged KB Life Insurance with and into KB Life Insurance Co., Ltd. (former Prudential Life Insurance Company of Korea, Ltd.)

•

June 30, 2023

Withdrew KB Credit Information Co., Ltd. as a first-tier subsidiary and added it as a second-tier subsidiary as it became a subsidiary of KB Kookmin Card Co., Ltd. (a first-tier subsidiary)

 

•

August 4, 2023

Merged KB Bank Cambodia Plc. with and into PRASAC Microfinance Institution Plc.; renamed the merged entity KB PRASAC BANK PLC. and converted it into a commercial bank.

 

•

October 5, 2023

Transferred KB Golden Life Care Co., Ltd. from being a subsidiary of KB Insurance Co., Ltd. to a subsidiary of KB Life Insurance Co., Ltd.

 

•

October 6, 2023

Added U-KB Credit No.1 Private Equity I as a second-tier subsidiary.

 

•

December 13, 2023

Added Teamwink Inc. as a second-tier subsidiary.

 

•

December 26, 2023

Added FineKB Private Equity Fund II as a second-tier subsidiary.

 

•

February 1, 2024

Added PT Valbury Capital Management 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.)

 

•

March 4, 2024

Added KB-SBI Global Strategic Capital Fund as a second-tier subsidiary.

 

•

June 3, 2024

Added KB Fund Partners as a second-tier subsidiary.

 

•

June 5, 2024

Renamed PT Valbury Capital Management to PT KB Valbury Asset Management

1.3.	Overview of the Business Group

 

						(As of June 30, 2024)
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 Life Insurance 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 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
2nd Tier Subsidiaries		PT Bank KB Bukopin Tbk.(1)		Kookmin Bank		Listed (Overseas)
		Kookmin Bank (China) Limited		Kookmin Bank		Not listed (Overseas)
		KB Microfinance Myanmar Co., Ltd.		Kookmin Bank		Not listed (Overseas)
		KB BANK MYANMAR LTD		Kookmin Bank		Not listed (Overseas)
		KB PRASAC BANK		Kookmin Bank		Not listed (Overseas)
		KB Fund Partners		Kookmin Bank		Not listed
		KBFG Securities America Inc.		KB Securities		Not listed (Overseas)
		KB Securities Hong Kong Ltd.		KB Securities		Not listed (Overseas)
		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-NAU Special Situation Corporate Restructuring Private Equity Fund		KB Securities		Not listed
		U-KB Credit No.1 Private Equity I		KB Securities		Not listed
		KB-SBI Global Strategic Capital Fund		KB Securities		Not listed
		KB FINA JOINT STOCK COMPANY		KB Securities		Not listed (Overseas)
		PT KB Valbury Sekuritas		KB Securities		Not listed (Overseas)
		KB Claims Survey & Adjusting Co., Ltd.		KB Insurance		Not listed
		KB Sonbo Customer & Service		KB Insurance		Not listed
		Leading Insurance Services, Inc		KB Insurance		Not listed (Overseas)
		KBFG Insurance (China) Co., Ltd(2)		KB Insurance		Not listed (Overseas)
		PT. KB Insurance Indonesia		KB Insurance		Not listed (Overseas)

						(As of June 30, 2024)
Type		Name of Company		Controlling Company		Remarks
		KB Healthcare Co., Ltd.		KB Insurance		Not listed
		KB Credit Information		KB Kookmin Card		Not listed
		KB Daehan Specialized Bank Plc.		KB Kookmin Card		Not listed (Overseas)
		PT KB Finansia Multi Finance		KB Kookmin Card		Not listed (Overseas)
		KB J Capital Co., Ltd(3)		KB Kookmin Card		Not listed (Overseas)
		i-Finance Leasing Plc.		KB Kookmin Card		Not listed (Overseas)
		KB Life Partners Co., Ltd		KB Life Insurance		Not listed
		KB Golden Life Care Co., Ltd.		KB Life Insurance		Not listed
		KB Asset Management Singapore Pte. Ltd.		KB Asset Management		Not listed (Overseas)
		KBAM Shanghai Advisory Services Co., Ltd.		KB Asset Management		Not listed (Overseas)
		PT KB Valbury Asset Management(4)		KB Asset Management		Not listed (Overseas)
		KB Co-investment 1st Private Equity Fund		KB Asset Management		Not listed
		KB Mezzanine Capital 4th Private Equity Fund		KB Asset Management		Not listed
		KB KOLAO LEASING Co., Ltd		KB Capital		Not listed (Overseas)
		PT. Sunindo Kookmin Best Finance		KB Capital		Not listed (Overseas)
		Teamwink Inc.		KB Capital		Not listed
		KoFC Value-up PEF		KB Investment		Not listed
		FineKB Private Equity Fund No.1		KB Investment		Not listed
		KB Bio Global Expansion Private Equity Fund No.1		KB Investment		Not listed
		KB-Badgers Future Mobility ESG Fund I		KB Investment		Not listed
		FineKB Private Equity Fund No.2		KB Investment		Not listed
		PT KB Data Systems Indonesia		KB Data Systems		Not listed (Overseas)
3rd Tier Subsidiaries		PT Bukopin Finance		PT Bank KB Bukopin Tbk.		Not listed (Overseas)
		PT Bank Syariah Bukopin		PT Bank KB Bukopin Tbk.		Not listed (Overseas)
		Mangrove Master Fund		KB Asset Management Singapore Pte. Ltd.		Not listed (Overseas)
		Mangrove Feeder Fund		KB Asset Management Singapore Pte. Ltd.		Not listed (Overseas)

 

Notes:

(1) Renamed to PT Bank KB Bukopin, Tbk. from PT Bank Bukopin, Tbk. on February 8, 2021.

(2) Renamed to KBFG Insurance (China) Co., Ltd. from LIG Insurance (China) Co., Ltd. on April 9, 2021.

(3) Renamed to KB J Capital Co., Ltd from J Fintech Co., Ltd on February 16, 2021.

(4) Renamed to PT KB Valbury Asset Management from PT Valbury Capital Management on June 5, 2024.

1.4. Capital Structure

1.4.1. Common Shares

Changes in Capital

 

(As of June 30, 2024)																(Unit: Won, shares)
Date		Type		Number of Shares Issued or Cancelled				Par Value				Price				Remarks
September 29, 2008		Common Stock			356,351,693				5,000				48,444			Establishment of the Company
September 2, 2009		Common Stock			30,000,000				5,000				37,250			% increase in number of common shares: 8.41865%
October 19, 2016		Common Stock			31,759,844				5,000				35,474			% increase in number of common shares: 8.22045%
December 12, 2019		Common Stock			2,303,617				5,000				—			Share Cancellation(1)
February 14, 2022		Common Stock			3,455,426				5,000				—			Share Cancellation(1)
August 1, 2022		Common Stock			3,455,426				5,000				—			Share Cancellation(1)
April 4, 2023		Common Stock			5,385,996				5,000				—			Share Cancellation(1)

 

Note:

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

Number of Shares

 

(As of June 30, 2024)		(Unit: shares)
		Type
		Common Shares				Preferred Shares				Total				Remarks
Shares Authorized for Issuance			1,000,000,000				—				1,000,000,000				As specified in the Articles of Incorporation
Total Shares Issued (A)			418,111,537				—				418,111,537				—
Decrease in Number of Shares (B)			14,600,465				—				14,600,465				—
1. Capital Reduction			—				—				—				—
2. Cancellation			14,600,465				—				14,600,465				Treasury Shares
3. Redemption			—				—				—				—
4. Other			—				—				—				—
Shares Issued as of December 31, 2023 (C=A-B)			403,511,072				—				403,511,072				—
Treasury Shares (D)			24,245,382				—				24,245,382				—
Shares Outstanding (C-D)			379,265,690				—				379,265,690				—

 

Notes:

(1) On July 21, 2022 the board of directors of the Company resolved to cancel certain of the Company’s treasury shares. The cancelled shares, amounting to 3,455,426 shares, were within the limits of profit available for dividend payment, and as such, there was no change in paid-in capital.

(2) On February 7, 2023, the board of directors of the Company resolved to acquire and cancel certain of the Company’s treasury shares and accordingly, the Company acquired 5,385,996 shares between February 8, 2023 and March 27, 2023 (33 business days) and cancelled all such treasury shares on April 4, 2023. The cancelled shares were within the limits of profit available for dividend payment, and as such, there was no change in paid-in capital.

(3) On July 25, 2023, the board of directors of the Company resolved to acquire and cancel certain of the Company’s treasury shares. Pursuant to such resolution, the Company entered into a trust agreement with Samsung Securities Co., Ltd. for the acquisition of Won 300 billion worth of treasury shares between August 1, 2023 and July 31, 2024 and has completed such acquisition, acquiring a total of 5,584,514 treasury shares. The Company has designated August 14, 2024 as the cancellation date and plans to cancel all of the acquired treasury shares on such date.

(4) On February 7, 2024, the board of directors of the Company resolved to acquire and cancel certain of the Company’s treasury shares. Pursuant to such resolution, the Company entered into a trust agreement with Samsung Securities Co., Ltd. for the acquisition of Won 320 billion worth of treasury shares between February 8, 2024 and August 7, 2024, and has completed such acquisition, acquiring a total of 4,398,135 treasury shares. The company has designated August 14, 2024 as the cancellation date and plans to cancel all of the acquired treasury shares on such date.

(5) On July 23, 2024, the board of directors of the Company resolved to acquire and cancel certain of the Company’s treasury shares. Pursuant to such resolution, the Company entered into a trust agreement with Samsung Securities Co., Ltd. for the acquisition of Won 400 billion worth of treasury shares. For more information, please refer to the Company’s report on Form 6-K furnished to the Securities and Exchange Commission on July 23, 2024.

1.4.2. Voting Rights

 

(As of June 30, 2024)										(Unit: shares)
Items						Number of Shares				Notes
Total number of issued shares			Common shares				403,511,072				—
			Preferred shares				—				—
Shares without voting rights			Common shares				24,245,382				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				379,265,690				—
			Preferred shares				—				—

 

Notes:

(1) On July 25, 2023, the board of directors of the Company resolved to acquire and cancel certain of the Company’s treasury shares. Pursuant to such resolution, the Company entered into a trust agreement with Samsung Securities Co., Ltd. for the acquisition of Won 300 billion worth of treasury shares between August 1, 2023 and July 31, 2024 and has completed such acquisition, acquiring a total of 5,584,514 treasury shares. The Company has designated August 14, 2024 as the cancellation date and plans to cancel all of the acquired treasury shares on such date.

(2) On February 7, 2024, the board of directors of the Company resolved to acquire and cancel certain of the Company’s treasury shares. Pursuant to such resolution, the Company entered into a trust agreement with Samsung Securities Co., Ltd. for the acquisition of Won 320 billion worth of treasury shares between February 8, 2024 and August 7, 2024, and has completed such acquisition, acquiring a total of 4,398,135 treasury shares. The company has designated August 14, 2024 as the cancellation date and plans to cancel all of the acquired treasury shares on such date.

1.5. Dividends

Since 2022, KB Financial Group has been pursuing a CET1 ratio-based shareholder return policy, whereby the Group’s principle is to utilize a portion of its excess capital exceeding its CET1 ratio of 13% to actively return value to its shareholders.

In order to enhance corporate value and shareholders’ value, the Group manages its shareholder return policy by using the ‘Total Shareholder Return Ratio’ as an indicator for its shareholder return, which includes distribution of cash dividends as well as share buybacks and cancellations. The Group plans to continually try to gradually expand its Total Shareholder Return Ratio.

In 2024, KB Financial Group implemented an ‘Equal Quarterly Dividend Distribution Policy,’ which aims to enhance the predictability of the Group’s dividend payments by paying an equal amount of total dividends each quarter while also maintaining at least the previous year’s level of, and gradually increasing the amount of, its dividends per share. In addition, the Group aims to enhance its shareholders’ value by striving to expand its shareholder return while also remaining flexible about buying back and cancelling its treasury shares in light of changes to its profit levels, the volatility of the financial market and changes in the regulatory landscape. Such cash dividend and share buyback and cancellation plans may be modified depending on economic conditions, the regulatory environment, or the Group’s business objectives.

KB Financial Group aims to manage its CET1 target ratio to be at least 13% (consisting of the regulatory requirement of 10.5% plus a management buffer of 2.5%), which also takes into consideration a capacity for absorbing losses in the event of an economic shock equivalent to that of the level of the Asian financial crisis in 1997.

In order to manage such CET1 target ratio, the Group plans to benchmark systemic growth indicators, such as nominal GDP growth rates, to set its mid-term goals for asset growth. However, the Group may modify such goals to better fulfill the Group’s public role and to attain sustainable growth in light of changes to the macroeconomic and regulatory environment, the importance and role of financial institutions, including banks, in the domestic economy, the Group’s public duty to maintain the stability of the social system, or the Group’s business objectives such as investments in new businesses or M&A initiatives.

Furthermore, the Group plans to manage its CET1 ratio at an optimal balance point by increasing its shareholder returns and complying with changes in financial regulations, including the introduction of the counter-cyclical capital buffer and the stress capital buffer, while also maintaining the soundness of the Group’s asset quality.

 

						(Unit: in millions of Won, except per share amounts and percentages)
Items						January 1, 2024 to June 30, 2024(1)				January 1, 2023 to December 31, 2023(2)				January 1, 2022 to December 31, 2022(3)
Par value per share (Won)							5,000				5,000				5,000
(Consolidated) Net income							2,912,843				4,631,932				4,394,830
(Consolidated) Earnings per share (Won)							7,041				11,580				10,955
Total cash dividends							600,000				1,173,937				1,149,421
Total stock dividends							—				—				—
(Consolidated) Cash dividend payout ratio (%)							20.6				25.3				26.0
Cash dividend yield (%)			Common shares				2.0				4.9				5.8
			—				—				—				—
Stock dividend yield (%)			Common shares				—				—				—
			—				—				—				—
Cash dividend per share (Won)			Common shares				1,575				3,060				2,950
			—				—				—				—
Stock dividend per share			Common shares				—				—				—
			—				—				—				—

Notes:

(1) Includes a quarterly dividend amount of Won 300,000 million (Won 784 per common share) in the first quarter of fiscal year 2024, and a quarterly dividend amount of Won 300,000 million (Won 791 per common share) in the second quarter of fiscal year 2024.

(2) Includes a quarterly dividend amount of Won 195,967 million (Won 510 per common share) in the first quarter of fiscal year 2023, a quarterly dividend amount of Won 195,967 million (Won 510 per common share) in the second quarter of fiscal year 2023, a quarterly dividend amount of Won 194,998 million (Won 510 per common share) in the third quarter of fiscal year 2023, and an annual dividend amount of Won 587,006 million (Won 1,530 per common share).

(3) Includes a quarterly dividend amount of Won 194,817 million (Won 500 per common share) in the first quarter of fiscal year 2022, a quarterly dividend amount of Won 194,817 million (Won 500 per common share) in the second quarter of fiscal year 2022, a quarterly dividend amount of Won 194,817 million (Won 500 per common share) in the third quarter of fiscal year 2022 and an annual dividend amount of Won 564,970 million (Won 1,450 per common share).

1.6. Amendments to the Articles of Incorporation

The Company’s Articles of Incorporation were most recently amended on March 24, 2023.

 

Date		Shareholder meeting through which the amendments were approved and ratified		Major changes		Notes
March 24, 2023		Annual General Meeting of Shareholders for Fiscal Year 2022		Establishment of: (i) the basis for determining the record date for the payment of dividends through a resolution of the Board of Directors, and (ii) an equal dividend payment policy with respect to shares in the same class, through the amendment of articles 10, 11, 15, 16, 17, 18, 19, 20, 49, 59, and 60		Establishment of the basis for determining the record date for the payment of dividends through a resolution of the Board of Directors

2. Business

2.1. Results of Operations

 

										(Unit: in millions of Won)
		For the six months ended June 30, 2024				For the six months ended June 30, 2023				For the year ended December 31, 2023				For the year ended December 31, 2022
Net interest income			6,357,722				5,833,669				12,141,717				11,515,325
Interest income			15,225,533				13,997,243				29,145,079				20,787,577
Interest expense			(8,867,811	)			(8,163,574	)			(17,003,362	)			(9,272,252	)
Net fee and commission income			1,909,728				1,865,410				3,673,524				3,514,902
Fee and commission income			2,726,904				2,696,416				5,368,074				5,125,930
Fee and commission expense			(817,176	)			(831,006	)			(1,694,550	)			(1,611,028	)
Insurance service result			1,018,102				832,222				1,422,952				1,311,091
Insurance income			5,568,240				5,339,779				10,978,808				10,072,490
Insurance expense			(4,550,138	)			(4,507,557	)			(9,555,856	)			(8,761,399	)
Net gains (losses) on financial assets/liabilities at fair value through profit or loss			570,710				1,159,314				2,163,065				(1,139,818	)
Other insurance finance income (expense)			(304,782	)			(300,845	)			(459,135	)			841,227
Net other operating expenses			(690,568	)			(718,208	)			(2,712,989	)			(2,262,123	)
General and administrative expenses			(3,222,127	)			(3,159,228	)			(6,647,406	)			(6,643,654	)
Operating profit before provision for credit losses			5,638,785				5,512,334				9,581,728				7,136,950
Provision for credit losses			(981,088	)			(1,319,485	)			(3,146,409	)			(1,847,775	)
Net operating profit			4,657,697				4,192,849				6,435,319				5,289,175

 

Notes:

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

(2) KB Financial Group’s results of operations for the year ended December 31, 2022 above have been restated retrospectively to reflect the application of K-IFRS 1117.

(3) KB Financial Group’s results of operations for the six months ended June 30, 2023 above have been restated retrospectively to reflect the application of the variable fee approach for measuring insurance liabilities in accordance with the Financial Supervisory Service’s guidelines on actuarial assumptions.

2.2.	Sources and Uses of Funds

 

2.2.1.

Sources of Funds

 

																												(Unit: in millions of Won)
				For the six months ended June 30, 2024												For the year ended December 31, 2023												For the year ended December 31, 2022
				Average Balance				Interest Rate (%)				Ratio (%)				Average Balance				Interest Rate (%)				Ratio (%)				Average Balance				Interest Rate (%)				Ratio (%)
Won Currency		Deposits			355,075,808				2.47				46.09				338,691,272				2.52				45.63				333,078,280				1.27				47.87
		Certificate of deposit			12,047,259				3.95				1.56				10,417,992				4.07				1.40				5,511,822				2.35				0.79
		Borrowings			34,737,985				3.43				4.51				33,891,286				3.27				4.57				31,064,028				1.91				4.46
		Call money			1,242,479				3.53				0.16				1,384,033				3.52				0.19				1,314,525				2.02				0.19
		Debentures			56,666,042				3.63				7.35				56,008,914				3.36				7.55				58,290,290				2.39				8.38
		Others			23,013,894				4.19				2.99				22,355,370				4.37				3.01				20,866,612				2.34				3.00
Subtotal					482,783,467				2.80				62.66				462,748,867				2.81				62.35				450,125,557				1.52				64.69
Foreign Currency		Deposits			37,183,887				4.20				4.83				36,526,597				3.88				4.92				34,076,754				2.09				4.90
		Borrowings			21,667,277				4.15				2.81				24,087,170				3.77				3.25				22,970,783				1.90				3.30
		Call money			2,298,973				3.83				0.30				2,014,719				3.19				0.27				1,572,913				1.87				0.23
		Debentures			14,800,768				3.21				1.92				13,607,050				3.14				1.83				11,978,139				2.09				1.72
		Others			1,050,751				4.37				0.13				1,067,253				3.51				0.14				1,685,165				1.46				0.24
Subtotal					77,001,656				3.99				9.99				77,302,789				3.69				10.41				72,283,754				2.01				10.39
Others		Total shareholders’ equity			99,710,034				—				12.94				95,694,663				—				12.89				67,612,953				—				9.72
		Allowances			1,742,037				—				0.23				1,061,174				—				0.14				1,128,687				—				0.16
		Others			109,211,341				—				14.18				105,428,693				—				14.21				104,628,576				—				15.04
Subtotal					210,663,412				—				27.35				202,184,530				—				27.24				173,370,216				—				24.92
Total					770,448,535				—				100.00				742,236,186				—				100.00				695,779,527				—				100.00

 

Notes:

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

(2) The figures for the six months ended June 30, 2024 and the year ended December 31,2023 reflect the application of K-IFRS 1117 (Insurance Contracts), a new accounting standard that became effective on January 1, 2023. The figures for the year ended December 31, 2022 above have been restated retrospectively to reflect the application of K-IFRS 1117.

2.2.2.

Uses of Funds

 

																												(Unit: in millions of Won)
				For the six months ended June 30, 2024												For the year ended December 31, 2023												For the year ended December 31, 2022
				Average Balance				Interest Rate (%)				Ratio (%)				Average Balance				Interest Rate (%)				Ratio (%)				Average Balance				Interest Rate (%)				Ratio (%)
Won Currency		Due from banks			17,372,394				0.81				2.25				16,471,530				0.92				2.22				16,038,688				0.63				2.31
		Securities			211,285,189				2.62				27.42				199,538,723				2.72				26.88				166,950,909				1.17				23.99
		Loans			383,116,418				4.78				49.73				370,190,671				4.81				49.88				361,188,713				3.51				51.91
		Guarantee payments under payment guarantee			5,493				1.36				—				5,114				0.81				—				6,891				0.19				—
		Call loan			367,311				3.57				0.05				286,735				3.62				0.04				694,196				2.02				0.10
		Private placement corporate bonds			1,127,133				2.97				0.15				1,206,821				2.90				0.16				828,547				3.43				0.12
		Credit cards			23,144,347				8.09				3.00				22,789,066				7.93				3.07				22,069,290				6.94				3.17
		Others			3,823,745				17.49				0.50				3,415,038				17.44				0.46				4,438,987				9.45				0.64
		Allowance			(4,157,607	)			—				(0.54	)			(3,561,894	)			—				(0.48	)			(2,814,578	)			—				(0.40	)
Subtotal					636,084,423				4.18				82.56				610,341,804				4.23				82.23				569,401,643				2.94				81.84
Foreign Currency		Due from banks			9,821,113				2.92				1.27				9,292,372				2.28				1.25				9,239,891				0.76				1.33
		Securities			25,820,359				4.69				3.35				25,883,766				4.16				3.49				20,610,143				1.81				2.96
		Loans			39,479,364				7.18				5.12				39,403,960				6.97				5.31				37,267,941				5.32				5.36
		Call loan			7,059,207				5.04				0.92				7,399,847				4.49				1.00				8,829,592				2.12				1.27
		Bills bought			1,676,430				5.68				0.22				2,047,390				5.58				0.28				2,541,838				2.32				0.37
		Allowance			(1,554,974	)			—				(0.20	)			(1,322,830	)			—				(0.18	)			(1,021,192	)			—				(0.15	)
		Others			3,010,629				—				0.39				3,070,684				—				0.41				2,248,320				—				0.32
Subtotal					85,312,128				5.69				11.07				85,775,189				5.30				11.56				79,716,533				3.38				11.46
Others		Cash			1,597,163				—				0.21				1,681,170				—				0.23				1,831,093				—				0.26
		Fixed assets held for business			9,555,398				—				1.24				8,813,616				—				1.19				8,077,249				—				1.16
		Others			37,899,423				—				4.92				35,624,407				—				4.79				36,753,009				—				5.28
Subtotal					49,051,984				—				6.37				46,119,193				—				6.21				46,661,351				—				6.70
Total					770,448,535				—				100.00				742,236,186				—				100.00				695,779,527				—				100.00

 

Notes:

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

(2) The figures for the six months ended June 30, 2024 and the year ended December 31, 2023 reflect the application of K-IFRS 1117 (Insurance Contracts), a new accounting standard that became effective on January 1, 2023. The figures for the year ended December 31, 2022 above have been restated retrospectively to reflect the application of K-IFRS 1117.

2.3.	Other Information to Consider in Making an Investment Decision

 

2.3.1.

Capital Adequacy

 

KB Financial Group						(Unit: in billions of Won, except percentages)
		As of June 30, 2024				As of December 31, 2023				As of December 31, 2022
Total capital (A)			55,570				53,744				48,970
Risk-weighted assets (B)			334,237				321,319				302,984
BIS ratio (A/B)			16.63	%			16.73	%			16.16	%

 

Notes:

(1) Calculated in accordance with Basel III.

(2) The figures as of June 30, 2024 are preliminary.

 

Kookmin Bank						(Unit: in billions of Won, except percentages)
		As of June 30, 2024				As of December 31, 2023				As of December 31, 2022
Total capital (A)			40,722				39,040				36,233
Risk-weighted assets (B)			228,911				215,962				207,558
BIS ratio (A/B)			17.79	%			18.08	%			17.46	%

 

Notes:

(1) Calculated in accordance with Basel III.

(2) The figures as of June 30, 2024 are preliminary.

 

KB Securities Co., Ltd.						(Unit: in billions of Won, except percentages)
		As of June 30, 2024				As of December 31, 2023				As of December 31, 2022
Net operating capital (A)			5,168				5,058				4,554
Total amount at risk (B)			2,930				2,934				2,655
Maintenance equity margin (C)			134				134				134
Net capital ratio (A-B)/(C)			1,667.36	%			1,582.09	%			1,414.74	%
Capital surplus (A-B)			2,238				2,124				1,899
KB Insurance Co., Ltd.						(Unit: in billions of Won, except percentages)
		As of June 30, 2024				As of December 31, 2023				As of December 31, 2022
Available capital (A)			12,213				11,669				4,608
Required capital (B)			6,021				5,404				2,684
Capital Adequacy ratio (A/B)(2)			202.84	%			215.94	%			171.66	%

 

Notes:

(1) The figures as of June 30, 2024 are preliminary.

(2) Pursuant to the change in capital adequacy system from the Risk-Based Capital (“RBC”) system to the Korean Insurance Capital Standard (“K-ICS”) system in 2023, the figures as of June 30, 2024 and December 31, 2023 were calculated based on the K-ICS method, whereas the figures as of December 31, 2022 were calculated based on the RBC method.

 

2.3.2.

Overseas Credit Ratings

 

						(As of June 30, 2024)
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)
1/12/2021		Debentures		AAA		Korea Ratings (AAA ~ D) / KIS Ratings (AAA ~ D) / NICE Investors Service (AAA ~ D)
2/3/2021		Contingent Convertible Bonds		AA-		Korea Ratings (AAA ~ D) / KIS Ratings (AAA ~ D) / NICE Investors Service (AAA ~ D)
2/19/2021		Debentures		AAA		KIS Ratings (AAA ~ D)
2/22/2021		Debentures		AAA		Korea Ratings (AAA ~ D) / NICE Investors Service (AAA ~ D)
5/14/2021		Contingent Convertible Bonds		AA-		Korea Ratings (AAA ~ D) / KIS Ratings (AAA ~ D) / NICE Investors Service (AAA ~ D)
6/25/2021		Commercial Paper		A1		Korea Ratings (A1 ~ D) / KIS Ratings (A1 ~ D) / NICE Investors Service (A1 ~ D)
9/24/2021		Contingent Convertible Bonds		AA-		Korea Ratings (AAA ~ D) / KIS Ratings (AAA ~ D) / NICE Investors Service (AAA ~ D)
1/27/2022		Contingent Convertible Bonds		AA-		Korea Ratings (AAA ~ D) / KIS Ratings (AAA ~ D)
1/28/2022		Contingent Convertible Bonds		AA-		NICE Investors Service (AAA ~ D)
4/29/2022		Contingent Convertible Bonds		AA-		Korea Ratings (AAA ~ D) / KIS Ratings (AAA ~ D) / NICE Investors Service (AAA ~ D)
6/2/2022		Debentures		AAA		Korea Ratings (AAA ~ D) / KIS Ratings (AAA ~ D) / NICE Investors Service (AAA ~ D)
6/20/2022		Commercial Paper		A1		Korea Ratings (A1 ~ D) / KIS Ratings (A1 ~ D) / NICE Investors Service (A1 ~ D)
8/16/2022		Contingent Convertible Bonds		AA-		Korea Ratings (AAA ~ D) / KIS Ratings (AAA ~ D) / NICE Investors Service (AAA ~ D)
2/3/2023		Contingent Convertible Bonds		AA-		Korea Ratings (AAA ~ D) / KIS Ratings (AAA ~ D) / NICE Investors Service (AAA ~ D)
6/23/2023		Commercial Paper		A1		Korea Ratings (A1 ~ D) / KIS Ratings (A1 ~ D) / NICE Investors Service (A1 ~ D)
2/15/2024		Contingent Convertible Bonds		AA-		Korea Ratings (AAA ~ D) / KIS Ratings (AAA ~ D) / NICE Investors Service (AAA ~ D)
6/26/2024		Commercial Paper		A1		Korea Ratings (A1 ~ D) / KIS Ratings (A1 ~ D) / NICE Investors Service (A1 ~ D)

 

2.3.4.

Early Retirement Program

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

 

Subsidiary		Date of Retirement		Number of Retired Persons
Kookmin Bank		January 28, 2019		615
		January 20, 2020		462
		January 30, 2021		800
		January 21, 2022		674
		January 18, 2023		713
		January 19, 2024		674

2.3.5.

Other Factors Affecting the Group’s Financial Condition and Results of Operations

The economic outlook for Korea and its financial services sector in 2024 and for the foreseeable future remains highly uncertain as a result of, among others, (i) volatile conditions in the Korean and global economies and financial markets resulting from uncertainties in the election outcomes in key countries, interest and exchange rate fluctuations, lower consumer confidence, stock market and real estate market volatility and changes in fiscal and monetary policies, and (ii) adverse conditions in the Korean and global economies and financial markets resulting from geopolitical uncertainties, including as a result of Russia’s invasion of Ukraine and its effects on global commodity prices, accelerating de-globalization trends and a potential economic slowdown or credit-related challenges in China.

 

3.	Financial Information

 

3.1.	Consolidated Financial Information

 

3.1.1.

Consolidated Statements of Financial Position

 

						(Unit: in millions of Won)
		As of June 30, 2024				As of December 31, 2023
Cash and due from financial institutions			31,053,065				29,836,311
Financial assets at fair value through profit or loss			77,708,742				77,038,267
Derivative financial assets			8,610,997				6,157,628
Loans measured at amortized cost			455,873,383				444,805,287
Financial investments			128,820,761				122,199,529
Investments in associates and joint ventures			705,650				722,222
Insurance assets			294,919				229,640
Reinsurance assets			1,531,915				1,655,168
Property and equipment			5,310,855				4,945,699
Investment property			3,929,357				4,109,784
Intangible assets			2,034,874				1,950,858
Net defined benefit assets			380,238				374,090
Current income tax assets			295,087				244,317
Deferred income tax assets			275,319				274,225
Assets held for sale			142,065				208,230
Assets of a disposal group held for sale			—				—
Other assets			25,265,095				20,986,897
Total assets			742,232,322				715,738,152

		As of June 30, 2024				As of December 31, 2023
Financial liabilities at fair value through profit or loss			10,792,237				10,920,435
Derivative financial liabilities			8,454,695				6,210,639
Deposits			420,217,889				406,512,434
Borrowings			67,079,671				69,583,561
Debentures			72,147,778				69,176,668
Insurance contract liabilities			52,788,786				50,308,552
Reinsurance contract liabilities			38,858				36,030
Provisions			1,728,300				1,444,418
Net defined benefit liabilities			77,165				81,869
Current income tax liabilities			320,674				145,335
Deferred income tax liabilities			1,853,481				2,179,966
Other liabilities			46,910,186				40,264,935
Total liabilities			682,409,720				656,864,842
Equity attributable to shareholders of the parent company			57,152,838				56,929,804
Share capital			2,090,558				2,090,558
Hybrid securities			5,082,553				5,032,803
Capital surplus			16,646,105				16,647,916
Accumulated other comprehensive income (loss)			765,431				2,295,165
Retained earnings			33,819,428				32,029,199
Treasury shares			(1,251,237	)			(1,165,837	)
Non-controlling interests			2,669,764				1,943,506
Total equity			59,822,602				58,873,310
Total liabilities and equity			742,232,322				715,738,152
Number of companies included as a consolidated entity			348				371

3.1.2.

Consolidated Statements of Comprehensive Income

 

		(Unit: in millions of Won, except per share amounts)
		First Half of 2024								First Half of 2023
		Second Quarter				Cumulative				Second Quarter				Cumulative
Net interest income			3,206,237				6,357,722				3,009,804				5,833,669
Interest income			7,611,571				15,225,533				7,130,660				13,997,243
Interest income from financial instruments at fair value through other comprehensive income and amortized cost			7,243,831				14,472,708				6,783,763				13,311,319
Interest income from financial instruments at fair value through profit or loss			359,835				736,588				341,149				674,626
Insurance finance interest income			7,905				16,237				5,748				11,298
Interest expense			(4,405,334	)			(8,867,811	)			(4,120,856	)			(8,163,574	)
Interest expense			(4,012,831	)			(8,079,357	)			(3,728,416	)			(7,368,296	)
Insurance finance interest expense			(392,503	)			(788,454	)			(392,440	)			(795,278	)
Net fee and commission income			919,635				1,909,728				951,404				1,865,410
Fee and commission income			1,330,604				2,726,904				1,361,714				2,696,416
Fee and commission expense			(410,969	)			(817,176	)			(410,310	)			(831,006	)
Net insurance income			479,723				1,018,102				439,815				832,222
Insurance income			2,840,682				5,568,240				2,676,645				5,339,779
Insurance income			2,740,059				5,429,533				2,565,710				5,064,258
Reinsurance income			100,623				138,707				110,935				275,521
Insurance expense			(2,360,959	)			(4,550,138	)			(2,236,830	)			(4,507,557	)
Insurance service expense			(2,310,454	)			(4,103,681	)			(2,029,822	)			(4,103,048	)
Reinsurance expense			(230,505	)			(446,457	)			(207,008	)			(404,509	)
Net gains on financial assets/liabilities at fair value through profit or loss			321,577				570,710				385,907				(1,159,314	)
Other insurance finance expenses			(192,356	)			(304,782	)			(31,785	)			(300,845	)
Net other operating expenses			(285,858	)			(690,568	)			(458,084	)			(718,208	)
General and administrative expenses			(1,593,891	)			(3,222,127	)			(1,592,942	)			(3,159,228	)
Operating income before provision for credit losses			2,855,067				5,638,785				2,704,119				5,512,334
Provision for credit losses			(552,818	)			(981,088	)			(651,297	)			(1,319,485	)
Net operating income			2,302,249				4,657,697				2,052,822				4,192,849
Net non-operating expenses			66,983				(880,981	)			(92,353	)			(188,514	)
Share of loss of associates and joint ventures			(694	)			(2,113	)			6,945				4,449
Net other non-operating expenses			67,677				(878,868	)			(99,298	)			(192,963	)
Profit before income tax expense			2,369,232				3,776,716				1,960,469				4,004,335
Income tax expense			(658,567	)			(1,002,837	)			(455,838	)			(989,413	)
Profit for the period			1,710,665				2,773,879				1,504,631				3,014,922
Other comprehensive income (expenses) for the period, net of tax			(761,201	)			(1,521,003	)			141,976				626,771