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 2016
Commission File Number: 000-53445
KB Financial Group Inc.
(Translation of registrant’s name into English)
84, Namdaemoon-ro, Jung-gu, Seoul 100-703, 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 x 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): ¨
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): ¨
Indicate by check mark whether the registrant by furnishing the information contained in this Form is also thereby furnishing the information to the Commission pursuant to Rule 12g3-2(b) under the Securities Exchange Act of 1934.
Yes ¨ No x
If “Yes” is marked, indicate below the file number assigned to the registrant in connection with Rule 12g3-2(b): 82- N/A .
2
Summary of Business Report for Fiscal Year 2015
On March 30, 2016, KB Financial Group Inc. (“KB Financial Group”) filed its business report for the fiscal year ended December 31, 2015 (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.
3
| 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., formerly a second-tier subsidiary, as a first-tier subsidiary
| • | September 28, 2009 |
Added Burrill-KB Life Sciences Fund as a second-tier subsidiary
| • | December 1, 2009 |
Added KB-Glenwood Private Equity Fund No.1 as a second-tier subsidiary
| • | January 22, 2010 |
The largest shareholder of the Company changed from the Korean National Pension Service to ING Bank N.V.
| • | July 6, 2010 |
Added KBIC No.3 PEF as a second-tier subsidiary
| • | December 13, 2010 |
Added KoFC KBIC Frontier Champ 2010-5 PEF as a second-tier subsidiary
4
| • | March 2, 2011 |
Added KB Kookmin Card Co., Ltd. as a first-tier subsidiary
| • | March 14, 2011 |
KB Futures Co., Ltd. was merged into KB Investment & Securities Co., Ltd.
| • | July 8, 2011 |
The largest shareholder of the Company changed from ING Bank N.V. to the Korean National Pension Service
| • | November 12, 2011 |
Closed KB Investment & Securities Hong Kong Ltd.
| • | January 13, 2012 |
Added KB Savings Bank Co., Ltd. as a first-tier subsidiary
| • | May 11, 2012 |
Added KoFC POSCO HANWHA KB Shared Growth No. 2. Private Equity Fund as a second-tier subsidiary
| • | June 8, 2012 |
Liquidated Burrill-KB Life Sciences Fund Ltd.
| • | July 2, 2012 |
Added KoFC Value-up Private Equity Fund as a second-tier subsidiary
| • | October 10, 2012 |
Added Kookmin Bank (China) Ltd. as a second-tier subsidiary
| • | June 20, 2013 |
Acquired the remaining shares of KB Life Insurance Co., Ltd., 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 Co., Ltd.
| • | March 20, 2014 |
Added KB Capital Co., Ltd. as a first-tier subsidiary
| • | July 2, 2014 |
Added Korea GCC Global Cooperation Private Equity Fund as a second-tier subsidiary
| • | June 24, 2015 |
Added KB Insurance Co., Ltd. as a non-consolidated first-tier subsidiary. With the addition of KB Insurance, KB Insurance’s six subsidiaries, KB Claims Survey & Adjusting Co., Ltd., KB sonbo CNS, Leading Insurance Services, Inc. (US subsidiary), LIG Insurance (China) Co., Ltd. (Chinese subsidiary), PT. Kookmin Best Insurance Indonesia (Indonesian subsidiary) and LIG Investment & Securities, were added as non-consolidated second-tier subsidiaries of KB Financial Group.
| • | November 23, 2015 |
Acquired additional shares of KB Insurance, which increased the Company’s shareholding from 19.47% to 33.29%.
5
| 1.3. | Overview of the Business Group |
| (As of December 31, 2015) | ||||||
| Type |
Name of Company |
Controlling Company |
Remarks | |||
| Holding Company |
KB Financial Group | — | Listed | |||
| 1st Tier Subsidiaries |
Kookmin Bank | KB Financial Group | Not listed | |||
| KB Insurance Co., Ltd. | KB Financial Group | Listed | ||||
| KB Kookmin Card Co., Ltd. | KB Financial Group | Not listed | ||||
| KB Investment & Securities 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 | Listed | ||||
| KB Savings Bank Co., Ltd. | KB Financial Group | Not listed | ||||
| KB Real Estate Trust Co., Ltd. | KB Financial Group | Not listed | ||||
| KB Investment Co., Ltd. | KB Financial Group | Not listed | ||||
| KB Credit Information Co., Ltd. | KB Financial Group | Not listed | ||||
| KB Data Systems Co., Ltd. | KB Financial Group | Not listed | ||||
| 2nd Tier Subsidiaries |
Kookmin Bank Hong Kong Ltd. | Kookmin Bank | Not listed | |||
| Kookmin Bank International Ltd. | Kookmin Bank | Not listed | ||||
| Kookmin Bank Cambodia PLC | Kookmin Bank | Not listed | ||||
| Kookmin Bank (China) Ltd. | Kookmin Bank | Not listed | ||||
| KB Claims Survey & Adjusting Co., Ltd. | KB Insurance | Not listed | ||||
| KB sonbo CNS | KB Insurance | Not listed | ||||
| LIG Investment & Securities Co., Ltd. | KB Insurance | Not listed | ||||
| Leading Insurance Services, Inc. | KB Insurance | Not listed | ||||
| LIG Insurance (China) Co., Ltd. | KB Insurance | Not listed | ||||
| PT. Kookmin Best Insurance Indonesia | KB Insurance | Not listed | ||||
| KB-Glenwood Private Equity Fund No.1 | KB Investment & Securities | Not listed | ||||
| NPS-KBIC Private Equity Fund No. 1 | KB Investment | Not listed | ||||
| KBIC No.3 PEF | KB Investment | Not listed | ||||
| KoFC KBIC Frontier Champ 2010-5 PEF | KB Investment | Not listed | ||||
| 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 | ||||
| Korea GCC Global Cooperation PEF | KB Investment | Not listed | ||||
Note: On June 24, 2015, KB Insurance Co., Ltd. was added as a non-consolidated first-tier subsidiary. With the addition of KB Insurance Co., Ltd., its six subsidiaries, KB Claims Survey & Adjusting Co., Ltd., KB sonbo CNS, Leading Insurance Services, Inc. (US subsidiary), LIG Insurance (China) Co., Ltd. (Chinese subsidiary), PT. Kookmin Best Insurance Indonesia (Indonesian subsidiary) and LIG Investment & Securities, were added as non-consolidated second-tier subsidiaries of KB Financial Group.
6
| 1.4. | Capital Structure |
| 1.4.1. | Common Shares |
Capital Increase
| (As of December 31, 2015) Issue Date |
(Unit: Won, shares) | |||||||||||||||||
| Type | Number | Par Value | Issue 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% | |||||||||||||
Number of Shares
| (As of December 31, 2015) | (Unit: shares) | |||||||
| Type | ||||||||
| Common Stock | Total | |||||||
| Shares Authorized for Issuance |
1,000,000,000 | 1,000,000,000 | ||||||
| Shares Issued (A) |
386,351,693 | 386,351,693 | ||||||
| Treasury Stock (B) |
— | — | ||||||
| Shares Outstanding (A-B) |
386,351,693 | 386,351,693 | ||||||
Note: On February 4, 2016, the Company entered into a trust agreement to acquire treasury shares. For more information, please refer to the Company’s report on Form 6-K furnished to the Securities and Exchange Commission on February 4, 2016.
| 1.4.2. | Voting Rights |
| (As of December 31, 2015) | ||||||||||||
| Items |
Number of shares | Notes | ||||||||||
| Total number of issued shares |
Common shares | 386,351,693 | — | |||||||||
| — | — | — | ||||||||||
| Shares without voting rights |
— | — | — | |||||||||
| 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 | 386,351,693 | — | |||||||||
| — | — | — | ||||||||||
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7
| 1.5. | Dividends |
| Items |
January 1, 2015 to December 31, 2015 |
January 1, 2014 to December 31, 2014 |
January 1, 2013 to December 31, 2013(1) |
|||||||||||
| Par value per share (Won) |
5,000 | 5,000 | 5,000 | |||||||||||
| (Consolidated) Net income (Won in Millions) |
1,698,318 | 1,400,722 | 1,271,502 | |||||||||||
| Earnings per share (Won) |
4,396 | 3,626 | 3,291 | |||||||||||
| Total cash dividends (Won in Millions) |
378,625 | 301,354 | 193,176 | |||||||||||
| Total stock dividends (Won in Millions) |
— | — | — | |||||||||||
| (Consolidated) Cash dividend payout ratio (%) |
22.3 | 21.5 | 15.2 | |||||||||||
| Cash dividend yield (%) |
Common Shares | 2.9 | 2.0 | 1.2 | ||||||||||
| — | — | — | — | |||||||||||
| Stock dividend yield (%) |
Common Shares | — | — | — | ||||||||||
| — | — | — | — | |||||||||||
| Cash dividend per share (Won) |
Common Shares | 980 | 780 | 500 | ||||||||||
| — | — | — | — | |||||||||||
| Stock dividend per share (Shares) |
Common Shares | — | — | — | ||||||||||
| — | — | — | — | |||||||||||
| (1) | Net income and earnings per share for the period ended December 31, 2013 have been restated to reflect adjustments resulting from retroactive application of a change in accounting policy with respect to uncertain tax positions. |
| 2. | Business |
| 2.1. | Results of Operations |
| (Unit: in millions of Won) | ||||||||||||
| For the year ended December 31, 2015 |
For the year ended December 31, 2014 |
For the year ended December 31, 2013(1) |
||||||||||
| Net interest income |
6,203,199 | 6,415,775 | 6,522,832 | |||||||||
| Interest income |
10,375,823 | 11,635,296 | 12,356,930 | |||||||||
| Interest expense |
(4,172,624 | ) | (5,219,521 | ) | (5,834,098 | ) | ||||||
| Net fee and commission income |
1,534,983 | 1,382,729 | 1,479,239 | |||||||||
| Fee and commission income |
2,971,095 | 2,666,185 | 2,657,365 | |||||||||
| Fee and commission expense |
(1,436,112 | ) | (1,283,456 | ) | (1,178,126 | ) | ||||||
| Net gains on financial assets/liabilities at fair value through profit or loss |
359,727 | 439,198 | 756,822 | |||||||||
| Net other operating expenses |
(715,960 | ) | (1,040,909 | ) | (1,304,765 | ) | ||||||
| General and administrative expenses |
(4,523,584 | ) | (4,009,694 | ) | (3,983,564 | ) | ||||||
| Operating profit before provision for credit losses |
2,858,365 | 3,187,099 | 3,470,564 | |||||||||
| Provision for credit losses |
(1,037,231 | ) | (1,227,976 | ) | (1,443,572 | ) | ||||||
| Net operating profit |
1,821,134 | 1,959,123 | 2,026,992 | |||||||||
| * | Note: Based on K-IFRS (on a consolidated basis). |
| (1) | Restated to reflect adjustments resulting from retroactive application of a change in accounting policy with respect to uncertain tax positions. |
8
| 2.2. | Sources and Uses of Funds |
| 2.2.1. | Sources of Funds |
| (Unit: in millions of Won, %) | ||||||||||||||||||||||||||||||||||||||
| For the year ended December 31, 2015 |
For the year ended December 31, 2014 |
For the year ended December 31, 2013(1) |
||||||||||||||||||||||||||||||||||||
| Average Balance |
Interest Rate (%) |
Ratio (%) |
Average Balance |
Interest Rate (%) |
Ratio (%) |
Average Balance |
Interest Rate (%) |
Ratio (%) |
||||||||||||||||||||||||||||||
| Won Currency |
Deposits |
193,725,814 | 1.69 | 62.62 | 186,833,286 | 2.20 | 63.76 | 180,330,345 | 2.49 | 63.39 | ||||||||||||||||||||||||||||
| Certificate of deposit |
3,645,078 | 1.92 | 1.18 | 1,689,157 | 2.71 | 0.58 | 1,780,230 | 3.01 | 0.63 | |||||||||||||||||||||||||||||
| Borrowings |
5,709,025 | 1.88 | 1.85 | 5,456,405 | 2.52 | 1.86 | 5,187,862 | 2.58 | 1.82 | |||||||||||||||||||||||||||||
| Call money |
2,009,387 | 1.66 | 0.65 | 3,177,907 | 2.36 | 1.08 | 3,716,812 | 2.57 | 1.31 | |||||||||||||||||||||||||||||
| Debentures |
27,365,637 | 2.78 | 8.85 | 24,966,578 | 3.80 | 8.52 | 22,072,602 | 4.31 | 7.76 | |||||||||||||||||||||||||||||
| Other |
4,763,806 | 2.03 | 1.53 | 3,298,600 | 2.80 | 1.13 | 3,199,161 | 2.74 | 1.12 | |||||||||||||||||||||||||||||
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| Subtotal |
237,218,747 | 1.83 | 76.68 | 225,421,933 | 2.40 | 76.93 | 216,287,012 | 2.69 | 76.03 | |||||||||||||||||||||||||||||
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| Foreign currency |
Deposits |
6,183,499 | 0.52 | 2.00 | 5,087,884 | 0.52 | 1.74 | 5,172,485 | 0.79 | 1.82 | ||||||||||||||||||||||||||||
| Borrowings |
6,121,121 | 0.46 | 1.98 | 6,071,393 | 0.52 | 2.07 | 6,961,080 | 0.59 | 2.45 | |||||||||||||||||||||||||||||
| Call money |
1,007,103 | 0.28 | 0.33 | 985,695 | 0.30 | 0.34 | 961,747 | 0.41 | 0.34 | |||||||||||||||||||||||||||||
| Debentures |
3,520,324 | 3.00 | 1.14 | 3,082,838 | 2.74 | 1.05 | 3,248,259 | 7.33 | 1.14 | |||||||||||||||||||||||||||||
| Other |
163,462 | 1.31 | 0.05 | 212,797 | 1.14 | 0.07 | 260,195 | 1.14 | 0.09 | |||||||||||||||||||||||||||||
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| Subtotal |
16,995,509 | 1.01 | 5.50 | 15,440,607 | 0.96 | 5.27 | 16,603,766 | 1.97 | 5.84 | |||||||||||||||||||||||||||||
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| Other |
Total shareholders’ equity |
28,252,594 | — | 9.13 | 26,872,801 | — | 9.17 | 25,825,011 | — | 9.08 | ||||||||||||||||||||||||||||
| Allowances |
787,604 | — | 0.25 | 765,895 | — | 0.26 | 736,008 | — | 0.26 | |||||||||||||||||||||||||||||
| Other |
26,126,546 | — | 8.44 | 24,543,634 | — | 8.37 | 25,043,332 | — | 8.79 | |||||||||||||||||||||||||||||
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| Subtotal |
55,166,744 | — | 17.82 | 52,182,330 | — | 17.80 | 51,604,351 | — | 18.13 | |||||||||||||||||||||||||||||
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| Total |
309,381,000 | — | 100.00 | 293,044,870 | — | 100.00 | 284,495,129 | — | 100.00 | |||||||||||||||||||||||||||||
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Note: Based on K-IFRS (on a consolidated basis).
| (1) | Restated to reflect adjustments resulting from retroactive application of a change in accounting policy with respect to uncertain tax positions. |
9
| 2.2.2. | Uses of Funds |
| (Unit: in millions of Won, %) | ||||||||||||||||||||||||||||||||||||||
| For the year ended December 31, 2015 |
For the year ended December 31, 2014 |
For the year ended December 31, 2013(1) |
||||||||||||||||||||||||||||||||||||
| Average Balance |
Interest Rate (%) |
Ratio (%) | Average Balance |
Interest Rate (%) |
Ratio (%) | Average Balance |
Interest Rate (%) |
Ratio (%) | ||||||||||||||||||||||||||||||
| Won currency |
Due from banks |
7,197,739 | 1.83 | 2.33 | 6,534,133 | 2.56 | 2.23 | 4,921,197 | 2.75 | 1.73 | ||||||||||||||||||||||||||||
| Securities |
45,372,914 | 3.22 | 14.67 | 43,889,573 | 3.81 | 14.98 | 45,223,896 | 3.63 | 15.90 | |||||||||||||||||||||||||||||
| Loans |
207,499,414 | 3.48 | 67.07 | 195,609,187 | 4.16 | 66.75 | 186,666,145 | 4.62 | 65.61 | |||||||||||||||||||||||||||||
| Guarantee payments under payment guarantee |
32,644 | 1.19 | 0.01 | 51,156 | 0.76 | 0.02 | 48,836 | 1.34 | 0.02 | |||||||||||||||||||||||||||||
| Call loan |
314,179 | 1.79 | 0.10 | 642,821 | 2.35 | 0.22 | 1,113,932 | 2.76 | 0.39 | |||||||||||||||||||||||||||||
| Private placement corporate bonds |
830,676 | 3.81 | 0.27 | 692,993 | 4.83 | 0.24 | 669,077 | 5.34 | 0.24 | |||||||||||||||||||||||||||||
| Credit cards |
11,904,279 | 9.03 | 3.85 | 11,309,156 | 9.86 | 3.86 | 11,608,865 | 10.70 | 4.08 | |||||||||||||||||||||||||||||
| Other |
7,154,906 | 5.15 | 2.31 | 8,231,500 | 5.47 | 2.81 | 7,005,212 | 5.75 | 2.45 | |||||||||||||||||||||||||||||
| Allowance |
(2,316,563 | ) | — | (0.75 | ) | (2,844,954 | ) | — | (0.97 | ) | (3,337,963 | ) | — | (1.17 | ) | |||||||||||||||||||||||
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| Subtotal |
277,990,188 | 3.70 | 89.86 | 264,115,565 | 4.39 | 90.14 | 253,919,197 | 4.77 | 89.25 | |||||||||||||||||||||||||||||
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| Foreign currency |
Due from banks |
1,782,048 | 1.12 | 0.58 | 1,277,335 | 1.81 | 0.43 | 984,258 | 1.10 | 0.35 | ||||||||||||||||||||||||||||
| Securities |
1,285,058 | 2.06 | 0.42 | 815,219 | 3.17 | 0.28 | 1,039,047 | 2.38 | 0.37 | |||||||||||||||||||||||||||||
| Loans |
9,009,829 | 1.52 | 2.91 | 8,347,507 | 1.81 | 2.85 | 9,151,081 | 1.99 | 3.22 | |||||||||||||||||||||||||||||
| Call loan |
1,435,461 | 0.33 | 0.46 | 1,869,308 | 0.81 | 0.64 | 1,778,838 | 0.55 | 0.62 | |||||||||||||||||||||||||||||
| Bills bought |
2,728,557 | 1.10 | 0.88 | 2,232,263 | 1.30 | 0.76 | 2,357,512 | 1.46 | 0.83 | |||||||||||||||||||||||||||||
| Allowance |
(234,422 | ) | — | (0.08 | ) | (197,375 | ) | — | (0.07 | ) | (166,194 | ) | — | (0.06 | ) | |||||||||||||||||||||||
| Other |
3,143 | — | — | 2,470 | — | — | 2,354 | — | — | |||||||||||||||||||||||||||||
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| Subtotal |
16,009,674 | 1.37 | 5.17 | 14,346,727 | 1.70 | 4.89 | 15,146,896 | 1.73 | 5.33 | |||||||||||||||||||||||||||||
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| Other |
Cash |
1,715,237 | — | 0.55 | 1,659,230 | — | 0.57 | 1,629,765 | — | 0.57 | ||||||||||||||||||||||||||||
| Fixed assets held for business |
3,230,133 | — | 1.04 | 3,196,710 | — | 1.09 | 3,190,345 | — | 1.12 | |||||||||||||||||||||||||||||
| Other |
10,435,768 | — | 3.38 | 9,726,638 | — | 3.31 | 10,608,926 | — | 3.73 | |||||||||||||||||||||||||||||
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| Subtotal |
15,381,138 | — | 4.97 | 14,582,578 | — | 4.97 | 15,429,036 | — | 5.42 | |||||||||||||||||||||||||||||
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| Total |
309,381,000 | — | 100.00 | 293,044,870 | — | 100.00 | 284,495,129 | — | 100.00 | |||||||||||||||||||||||||||||
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|||||||||||||||||||||
Note: Based on K-IFRS (on a consolidated basis).
| (1) | Restated to reflect adjustments resulting from retroactive application of a change in accounting policy with respect to uncertain tax positions. |
10
| 2.3. | Other Information to Consider in Making an Investment Decision |
| 2.3.1. | Capital Adequacy |
| KB Financial Group | (Unit: in millions of Won, %) | |||||||||||
| As of December 31, 2015 | As of December 31, 2014 | As of December 31, 2013 | ||||||||||
| Total Capital (A) |
29,140,025 | 28,347,675 | 27,296,535 | |||||||||
| Risk-weighted assets (B) |
188,212,825 | 182,485,957 | 177,514,060 | |||||||||
| BIS ratio (A/B) |
15.48 | 15.53 | 15.38 | |||||||||
| * | Note: Calculated in accordance with Basel III |
| Kookmin Bank | (Unit: in billions of Won, %) | |||||||||||
| As of December 31, 2015 | As of December 31, 2014 | As of December 31, 2013 | ||||||||||
| Total Capital (A) |
23,686 | 23,422 | 22,624 | |||||||||
| Risk-weighted assets (B) |
147,973 | 146,690 | 146,743 | |||||||||
| BIS ratio (A/B) |
16.01 | 15.97 | 15.42 | |||||||||
| * | Note: Calculated in accordance with Basel III |
| 2.3.2. | Credit ratings |
| Date of Rating |
Evaluated Securities |
Credit Rating |
Company (Ratings Range) |
Evaluation | ||||
| 11/25/2015 11/25/2015 11/25/2015 |
Debentures Debentures Debentures |
AAA AAA AAA |
Korea Ratings (AAA ~ D) KIS Ratings (AAA ~ D) NICE Investors Service(2) (AAA ~ D) |
Stable Stable Stable | ||||
| 11/18/2015 |
Commercial Paper(1) | A1 | Korea Ratings (A1 ~ D) KIS Ratings (A1 ~ D) NICE Investors Service(2) (A1 ~ D) |
— | ||||
| (1) | Redeemed in full as of December 31, 2015. |
| (2) | Formerly NICE Ratings. |
| 2.3.3. | Early Retirement Program |
To enhance productivity by improving its labor structure, Kookmin Bank implemented a voluntary early retirement program following negotiations with its labor union.
| Date of retirement |
Number of retired persons | |
| June 18, 2015 |
1,122 | |
| January 14, 2016 |
171 |
11
| 3. | Financial Information |
| 3.1. | Consolidated Condensed Financial Information |
| 3.1.1. | Consolidated Statements of Financial Position |
| (Unit: in millions of Won) | ||||||||||||
| As of December 31, 2015 | As of December 31, 2014 | As of December 31, 2013(1) | ||||||||||
| Cash and due from financial institutions |
16,316,066 | 15,423,847 | 14,792,654 | |||||||||
| Financial assets at fair value through profit or loss |
11,174,064 | 10,757,910 | 9,328,742 | |||||||||
| Derivative financial assets |
2,278,112 | 1,968,190 | 1,819,409 | |||||||||
| Loans |
245,005,370 | 231,449,653 | 219,001,356 | |||||||||
| Financial investments |
39,136,759 | 34,960,620 | 34,849,095 | |||||||||
| Investments in associates |
1,737,840 | 670,332 | 755,390 | |||||||||
| Property and equipment |
3,287,383 | 3,082,985 | 3,060,843 | |||||||||
| Investment property |
211,815 | 377,544 | 166,259 | |||||||||
| Intangible assets |
466,828 | 488,922 | 443,204 | |||||||||
| Current income tax assets |
18,525 | 306,313 | 346,910 | |||||||||
| Deferred income tax assets |
8,373 | 15,562 | 15,422 | |||||||||
| Assets held for sale |
48,628 | 70,357 | 37,718 | |||||||||
| Other assets |
9,375,704 | 8,783,473 | 7,550,596 | |||||||||
|
|
|
|
|
|
|
|||||||
| Total assets |
329,065,467 | 308,355,708 | 292,167,598 | |||||||||
|
|
|
|
|
|
|
|||||||
| Financial liabilities at fair value through profit or loss |
2,974,604 | 1,818,968 | 1,115,202 | |||||||||
| Derivative financial liabilities |
2,325,756 | 1,797,390 | 1,795,339 | |||||||||
| Deposits |
224,268,185 | 211,549,121 | 200,882,064 | |||||||||
| Debts |
16,240,743 | 15,864,500 | 14,101,331 | |||||||||
| Debentures |
32,600,603 | 29,200,706 | 27,039,534 | |||||||||
| Provisions |
607,860 | 614,347 | 678,073 | |||||||||
| Net defined benefit liabilities |
73,197 | 75,684 | 64,473 | |||||||||
| Current income tax liabilities |
30,920 | 231,907 | 211,263 | |||||||||
| Deferred income tax liabilities |
179,243 | 93,211 | 61,816 | |||||||||
| Other liabilities |
20,861,634 | 19,597,202 | 20,236,229 | |||||||||
|
|
|
|
|
|
|
|||||||
| Total liabilities |
300,162,745 | 280,843,036 | 266,185,324 | |||||||||
|
|
|
|
|
|
|
|||||||
| Equity attributable to shareholders of the Company |
28,680,621 | 27,315,092 | 25,982,274 | |||||||||
| Share capital |
1,931,758 | 1,931,758 | 1,931,758 | |||||||||
| Capital surplus |
15,854,510 | 15,854,510 | 15,854,605 | |||||||||
| Accumulated other comprehensive income |
430,244 | 461,679 | 336,312 | |||||||||
| Retained earnings |
10,464,109 | 9,067,145 | 7,859,599 | |||||||||
| Non-controlling interests |
222,101 | 197,580 | — | |||||||||
|
|
|
|
|
|
|
|||||||
| Total equity |
28,902,722 | 27,512,672 | 25,982,274 | |||||||||
|
|
|
|
|
|
|
|||||||
| Total liabilities and equity |
329,065,467 | 308,355,708 | 292,167,598 | |||||||||
|
|
|
|
|
|
|
|||||||
| Number of consolidated companies |
83 | 112 | 100 | |||||||||
| (1) | Restated to reflect adjustments resulting from retroactive application of a change in accounting policy with respect to uncertain tax positions. |
12
| 3.1.2. | Consolidated Statements of Comprehensive Income |
| (Unit: in millions of Won, except per share amounts) | ||||||||||||
| For the year ended December 31, 2015 |
For the year ended December 31, 2014 |
For the year ended December 31, 2013(1) |
||||||||||
| Net interest income |
6,203,199 | 6,415,775 | 6,522,832 | |||||||||
| Net fee and commission income |
1,534,983 | 1,382,729 | 1,479,239 | |||||||||
| Net gains on financial assets/liabilities at fair value through profit or loss |
359,727 | 439,198 | 756,822 | |||||||||
| Net other operating expenses |
(715,960 | ) | (1,040,909 | ) | (1,304,765 | ) | ||||||
| General and administrative expenses |
(4,523,584 | ) | (4,009,694 | ) | (3,983,564 | ) | ||||||
| Operating profit before provision for credit losses |
2,858,365 | 3,187,099 | 3,470,564 | |||||||||
| Provision for credit losses |
(1,037,231 | ) | (1,227,976 | ) | (1,443,572 | ) | ||||||
| Net operating profit |
1,821,134 | 1,959,123 | 2,026,992 | |||||||||
| Net non-operating profit (loss) |
343,561 | (57,698 | ) | (211,701 | ) | |||||||
| Profit before income tax |
2,164,695 | 1,901,425 | 1,815,291 | |||||||||
| Income tax expense |
(437,389 | ) | (486,314 | ) | (540,593 | ) | ||||||
| Profit for the year |
1,727,306 | 1,415,111 | 1,274,698 | |||||||||
| Other comprehensive income (loss) for the year, net of tax |
(31,262 | ) | 123,863 | 26,902 | ||||||||
|
|
|
|
|
|
|
|||||||
| Total comprehensive income for the year |
1,696,044 | 1,538,974 | 1,301,600 | |||||||||
|
|
|
|
|
|
|
|||||||
| Profit attributable to: |
1,727,306 | 1,415,111 | 1,274,698 | |||||||||
| Shareholders of the parent company |
1,698,318 | 1,400,722 | 1,271,502 | |||||||||
| Non-controlling interests |
28,988 | 14,389 | 3,196 | |||||||||
|
|
|
|
|
|
|
|||||||
| Total comprehensive income for the year attributable to: |
1,696,044 | 1,538,974 | 1,301,600 | |||||||||
|
|
|
|
|
|
|
|||||||
| Shareholders of the parent company |
1,666,883 | 1,526,089 | 1,312,672 | |||||||||
| Non-controlling interests |
29,161 | 12,885 | (11,072 | ) | ||||||||
| Earnings per share |
||||||||||||
| Basic earnings per share (Won) |
4,396 | 3,626 | 3,291 | |||||||||
| Diluted earnings per share (Won) |
4,376 | 3,611 | 3,277 | |||||||||
| (1) | Restated as a result of retroactive application of a change in accounting policy with respect to uncertain tax positions. |
13
| 3.2. | Separate Condensed Financial Information |
| 3.2.1. | Separate Statements of Financial Position |
| (Unit: in millions of Won) | ||||||||||||
| As of December 31, 2015 | As of December 31, 2014 | As of December 31, 2013 | ||||||||||
| Cash and due from financial institutions |
324,947 | 30,739 | 77,298 | |||||||||
| Financial assets at fair value through profit or loss |
99,118 | — | — | |||||||||
| Loans |
— | 10,000 | 10,000 | |||||||||
| Investments in subsidiaries |
18,557,566 | 18,557,566 | 18,292,443 | |||||||||
| Investments in associate |
883,065 | |||||||||||
| Property and equipment |
578 | 514 | 642 | |||||||||
| Intangible assets |
8,428 | 8,684 | 10,133 | |||||||||
| Deferred income tax assets |
4,515 | 4,089 | 4,203 | |||||||||
| Other assets |
137,954 | 598,929 | 269,823 | |||||||||
|
|
|
|
|
|
|
|||||||
| Total assets |
20,016,171 | 19,210,521 | 18,664,542 | |||||||||
|
|
|
|
|
|
|
|||||||
| Debentures |
1,647,117 | 628,837 | 349,157 | |||||||||
| Net defined benefit liabilities |
591 | 803 | 1,433 | |||||||||
| Current income tax liabilities |
17,178 | 222,639 | 209,928 | |||||||||
| Other liabilities |
123,281 | 71,568 | 55,602 | |||||||||
|
|
|
|
|
|
|
|||||||
| Total liabilities |
1,788,167 | 923,847 | 616,120 | |||||||||
|
|
|
|
|
|
|
|||||||
| Share capital |
1,931,758 | 1,931,758 | 1,931,758 | |||||||||
| Capital surplus |
13,513,809 | 13,513,809 | 13,513,809 | |||||||||
| Accumulated other comprehensive loss |
(4,979 | ) | (4,238 | ) | (2,715 | ) | ||||||
| Retained earnings |
2,787,416 | 2,845,345 | 2,605,570 | |||||||||
|
|
|
|
|
|
|
|||||||
| Total equity |
18,228,004 | 18,286,674 | 18,048,422 | |||||||||
|
|
|
|
|
|
|
|||||||
| Total liabilities and equity |
20,016,171 | 19,210,521 | 18,664,542 | |||||||||
|
|
|
|
|
|
|
|||||||
| Evaluation method for investment securities in subsidiaries, affiliates and joint ventures |
Cost-method | Cost-method | Cost-method | |||||||||
14
| 3.2.2. | Separate Statements of Comprehensive Income |
| (Unit: in millions of Won, except per share amounts) | ||||||||||||
| For the year ended December 31, 2015 |
For the year ended December 31, 2014 |
For the year ended December 31, 2013 |
||||||||||
| Net interest expense |
(25,744 | ) | (16,758 | ) | (1,368 | ) | ||||||
| Net fee and commission expense |
(8,228 | ) | (6,658 | ) | (6,270 | ) | ||||||
| Net gains on financial assets at fair value through profit or loss |
1,658 | — | — | |||||||||
| Net other operating income |
315,527 | 493,782 | 245,044 | |||||||||
| General and administrative expenses |
(39,916 | ) | (36,342 | ) | (40,657 | ) | ||||||
| Operating profit before provision for credit losses |
243,297 | 434,024 | 196,749 | |||||||||
| Provision for credit losses |
— | — | — | |||||||||
| Net operating profit |
243,297 | 434,024 | 196,749 | |||||||||
| Net non-operating expenses |
(62 | ) | (473 | ) | (1,346 | ) | ||||||
| Profit before income tax |
243,235 | 433,551 | 195,403 | |||||||||
| Income tax benefit (expense) |
190 | (600 | ) | 423 | ||||||||
| Profit for the year |
243,425 | 432,951 | 195,826 | |||||||||
| Other comprehensive income (loss) for the year, net of tax |
(741 | ) | (1,523 | ) | 65 | |||||||
|
|
|
|
|
|
|
|||||||
| Total comprehensive income for the year |
242,684 | 431,428 | 195,891 | |||||||||
|
|
|
|
|
|
|
|||||||
| Earnings per share |
||||||||||||
| Basic earnings per share (Won) |
630 | 1,121 | 507 | |||||||||
| Diluted earnings per share (Won) |
627 | 1,116 | 505 | |||||||||
15
| 3.3. | Other Selected Financial Data |
| 3.3.1. | Won-denominated Liquidity Ratio |
| (Unit: in billions of Won, %) | ||||||||||||
| Category |
2015 | 2014 | 2013 | |||||||||
| Current assets in Won (A) |
325.1 | 30.8 | 77.6 | |||||||||
| Current liabilities in Won (B) |
4.6 | 2.2 | 1.3 | |||||||||
| Current ratio (A/B) |
7,122.10 | % | 1,417.54 | % | 5,934.85 | % | ||||||
Notes:
| • | Based on K-IFRS (on a separate basis). |
| • | Calculated based on Won-denominated assets and liabilities due within one month. |
| 3.3.2. | Selected ratios |
| (Unit: %) | ||||||||||||
| Category |
2015 | 2014 | 2013(1) | |||||||||
| Net income as a percentage of average total assets (ROA) |
0.54 | 0.47 | 0.44 | |||||||||
| Net income as a percentage of average shareholders’ equity (ROE) |
6.06 | 5.26 | 5.02 | |||||||||
Note: Based on K-IFRS (on a consolidated basis).
| (1) | Restated as a result of retroactive application of a change in accounting policy with respect to uncertain tax positions. |
16
| 3.3.3. | 20 Largest Exposures of Kookmin Bank by Borrower |
| (As of December 31, 2015) | ||||
| Company |
Credit extended | |||
| (Unit: in billions of Won) | ||||
| Samsung Electronics Co., Ltd. |
1,242 | |||
| Hyundai Heavy Industries Co., Ltd. |
846 | |||
| LG Electronics Inc. |
684 | |||
| Hyundai Steel Co., Ltd. |
619 | |||
| Daewoo Shipbuilding & Marine Engineering Co., Ltd. |
612 | |||
| Samsung Display Co., Ltd. |
612 | |||
| Daewoo International Corporation |
576 | |||
| Samsung Heavy Industries Co., Ltd. |
561 | |||
| Hyundai Capital Services, Inc. |
561 | |||
| GS Caltex Corporation |
553 | |||
| KT Corporation |
551 | |||
| Korea Securities Finance Corp. |
541 | |||
| Hyundai Motor Company |
524 | |||
| S-Oil Corporation |
494 | |||
| SK Energy Co., Ltd. |
479 | |||
| Korean Airlines Co., Ltd. |
446 | |||
| Raiffeisenbank St. Gallen |
410 | |||
| Kia Motors Corp. |
394 | |||
| Shinsegae Inc. |
392 | |||
| Samsung C&T Corporation |
372 | |||
|
|
|
|||
| Total |
11,469 | |||
|
|
|
|||
17
| 3.3.4. | 10 Largest Exposures of Kookmin Bank by Chaebol Group |
| (As of December 31, 2015) | ||||
| Group |
Credit extended | |||
| (Unit: in billions of Won) | ||||
| Samsung |
4,000 | |||
| Hyundai Motor |
3,782 | |||
| SK |
1,986 | |||
| LG |
1,570 | |||
| Hanwha |
1,445 | |||
| Hyundai Heavy Industries |
1,276 | |||
| POSCO |
1,239 | |||
| GS |
1,120 | |||
| Lotte |
820 | |||
| Shinsegae |
771 | |||
|
|
|
|||
| Total |
18,009 | |||
|
|
|
|||
| 3.3.5. | Kookmin Bank’s Loan Concentration by Industry |
| (As of December 31, 2015) | ||||||||
| Industry |
Total Credit | Percentage of Total Credit |
||||||
| (Unit: in billions of Won, %) | ||||||||
| Manufacturing |
38,523 | 35.8 | ||||||
| Construction |
3,993 | 3.7 | ||||||
| Real estate |
20,076 | 18.7 | ||||||
| Retail and wholesale |
15,394 | 14.3 | ||||||
| Hotel, lodging and food service |
6,975 | 6.5 | ||||||
| Financial institutions |
1,879 | 1.7 | ||||||
| Other |
20,646 | 19.2 | ||||||
|
|
|
|
|
|||||
| Total |
107,486 | 100.00 | ||||||
|
|
|
|
|
|||||
18
| 3.3.6. | Top 20 Non-Performing Loans of Kookmin Bank |
| (As of December 31, 2015) | ||||||||||
| Industry |
Total Credit | Allowance for Loan Losses |
||||||||
| (Unit: in billions of Won) | ||||||||||
| Borrower A |
Construction | 100 | 26 | |||||||
| Borrower B |
Manufacturing | 84 | 84 | |||||||
| Borrower C |
Shipbuilding | 83 | 28 | |||||||
| Borrower D |
Construction | 70 | 70 | |||||||
| Borrower E |
Shipping | 59 | 55 | |||||||
| Borrower F |
Manufacturing | 56 | 55 | |||||||
| Borrower G |
Real estate and leasing | 51 | 6 | |||||||
| Borrower H |
Manufacturing | 43 | 41 | |||||||
| Borrower I |
Manufacturing | 41 | 41 | |||||||
| Borrower J |
Construction | 41 | 41 | |||||||
| Borrower K |
Construction | 40 | 39 | |||||||
| Borrower L |
Manufacturing | 33 | 14 | |||||||
| Borrower M |
Shipping | 22 | 8 | |||||||
| Borrower N |
Shipping | 22 | 8 | |||||||
| Borrower O |
Arts, sports and recreation related services | 21 | 21 | |||||||
| Borrower P |
Manufacturing | 20 | 20 | |||||||
| Borrower Q |
Arts, sports and recreation related services | 19 | 19 | |||||||
| Borrower R |
Manufacturing | 19 | — | |||||||
| Borrower S |
Manufacturing | 16 | 2 | |||||||
| Borrower T |
Manufacturing | 15 | 5 | |||||||
| Total |
855 | 583 | ||||||||
| 3.4. | Other Financial Information |
See Form 6-K furnished to the Securities and Exchange Commission on March 10, 2016 by the Company which contains the Company’s audited consolidated and separate financial statements and relevant notes as of and for the years ended December 31, 2014 and 2015 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.
19
| 4. | Independent Public Accountants |
| 4.1. | Audit / Review Services |
| Period |
Auditor |
Activity |
Compensation(1) (in millions of Won) |
Accrued Time (hours) |
||||||||
| January 1 to |
Samil PricewaterhouseCoopers |
Quarterly / first half and annual review & audit, review of internal accounting management system (including audit of internal control over financial reporting) | 760 | 9,947 | ||||||||
| January 1 to |
Samil PricewaterhouseCoopers |
Quarterly / first half and annual review & audit, review of internal accounting management system (including audit of internal control over financial reporting) | 732 | 9,869 | ||||||||
| January 1 to |
Samil PricewaterhouseCoopers |
Quarterly / first half and annual review & audit, review of internal accounting management system (including audit of internal control over financial reporting) | 646 | 9,940 | ||||||||
| (1) | Excluding value-added taxes. |
| 4.2. | Public Company Accounting Oversight Board (“PCAOB”) Audit Services |
| Period |
Auditor |
Activity |
Service Period | Compensation(1) (in millions of Won) |
||||||||
| January 1 to |
Samil PricewaterhouseCoopers | PCAOB audit of consolidated financial statements and internal control over financial reporting |
|
May 1, 2015 to April 30, 2016 |
|
459 | ||||||
| January 1 to |
Samil PricewaterhouseCoopers | PCAOB audit of consolidated financial statements and internal control over financial reporting | |
May 1, 2014 to April 30, 2015 |
|
487 | ||||||
| January 1 to |
Samil PricewaterhouseCoopers | PCAOB audit of consolidated financial statements and internal control over financial reporting |
|
May 1, 2013 to April 30, 2014 |
|
573 | ||||||
| (1) | Excluding value-added taxes. |
| 5. | Corporate Governance and Affiliated Companies |
| 5.1. | Board of Directors & Committees under the Board |
As of December 31, 2015, our board of directors consisted of one executive director, one non-standing director and seven non-executive directors. As of the date of this business report, Mr. Young Hwi Choi, a non-executive director, is the chair of our board of directors. The following committees currently serve under our board of directors:
20
| • | Audit Committee; |
| • | Risk Management Committee; |
| • | Evaluation & Compensation Committee; |
| • | Non-Executive Director Nominating Committee; |
| • | Corporate Governance Committee; and |
| • | Audit Committee Member Nominating Committee. |
For the list of our directors, see 6. Directors, Senior Management and Employees — 6.1. Executive Directors, — 6.2. Non-standing Directors and — 6.3. Non-executive Directors below.
| 5.2. | Audit Committee |
The audit committee oversees our financial reporting and approves the appointment of our independent auditors and internal compliance officers. The committee also reviews our financial information, auditor’s examinations, key financial statement issues, the plans and evaluation of internal controls and the administration of our financial affairs by the board of directors. In connection with the general meetings of shareholders, the committee examines the agenda for, and financial statements and other reports to be submitted by, the board of directors to each general meeting of shareholders. The committee holds regular meetings every quarter and on an as-needed basis.
| 5.3. | Compensation to Directors |
| 5.3.1. | Total Amount Approved at the Meeting of Shareholders |
| (Unit: in millions of Won) | ||||||||||||
| Total number of persons |
Total amount approved at shareholders’ meeting(1)(2) |
Notes | ||||||||||
| Registered Directors (including non-executive directors and audit committee members) |
9 | (7) | 2,500 | — | ||||||||
| (1) | Represents the aggregate amount for all directors (including non-executive directors). Excludes compensation in the form of long-term incentive performance share grants. |
| (2) | The compensation to directors, which amount shall not exceed the total amount approved at the meeting of shareholders, is determined by the board of directors. |
21
| 5.3.2. | Total Amount Paid as of December 31, 2015 |
| (Unit: in millions of Won) | ||||||||||||||||
| Total number of persons(1) |
Total payment (2)(5)(6)(7) | Average payment per person (3)(4) |
Notes | |||||||||||||
| Registered Directors (excluding non-executive directors) |
2 | 419 | 248 | — | ||||||||||||
| Non-executive Directors (excluding audit committee members) |
3 | 260 | 81 | — | ||||||||||||
| Audit committee members or internal auditor |
4 | 285 | 75 | — | ||||||||||||
| Total |
9 | 964 | 111 | — | ||||||||||||
| (1) | Represents the total number of applicable persons as of December 31, 2015. |
| (2) | Represents the total amount paid (rounded to the nearest million) for the year ended December 31, 2015. |
| (3) | Represents (i) the total amount paid (rounded to the nearest million) for the year ended December 31, 2015, divided by (ii) the annualized number of applicable persons (includes Messrs. Kun Ho Hwang, Myung Jig Kim, Young Kwa Kim, Jae Ho Cho, Young Jin Kim, Sung Hwan Shin and Jong Cheon Lee, former non-executive directors who resigned in March 2015). |
| (4) | The average payment per person for the seven non-executive directors appointed on March 27, 2015 is Won 53 million. |
| (5) | Payment subject to the Company’s internal policies on compensation to directors. |
| (6) | Includes performance based short-term incentive payment of Won 25 million, which was based on performance in 2014 and paid in the first quarter of 2015. |
| (7) | In addition to the total payments as presented in the above table, we recorded Won 406 million in our income statement for the year ended December 31, 2015 with respect to performance-based stock grants, the payment and amount of which are determined in accordance with the performance of the grantees. |
| (i) | Stock grants were measured at fair value using the Monte Carlo Simulation Model and the following assumptions were used in fair value measurements: |
| (Unit: in Won) | ||||||||||||||
| Series |
Expected exercise period (Years) |
Risk free rate (%) | Fair value (Market performance condition) |
Fair value (Non-market performance condition) |
||||||||||
| Series 12 |
1.89~4.89 | 1.64 | 33,689 | 33,157~33,292 | ||||||||||
| (ii) | Expected volatility is based on the historical volatility of the stock price over the most recent period that is generally commensurate with the expected term of the grant. The current stock price as of December 31, 2015 was used as the underlying asset price in estimating fair value. In addition, the average three-year historical dividend rate was used as the expected dividend rate in measuring fair value. |
| 5.3.3. | Compensation exceeding Won 500 million – Individual Basis(1) |
| (Unit: in millions of Won) | ||||||||||||
| Name |
Position | Total Compensation | Additional Compensation | |||||||||
| — |
— | — | — | |||||||||
| (1) | No director received total compensation exceeding Won 500 million for the year ended December 31, 2015. |
22
| 5.4. | Affiliated Companies |
| 5.4.1. | 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, 2015 are as follows.
| • | Kookmin Bank (100.00%) |
| • | KB Insurance Co., Ltd. (33.29%) |
| • | KB Kookmin Card Co., Ltd. (100.00%) |
| • | KB Investment & Securities Co., Ltd. (100.00%) |
| • | KB Life Insurance Co., Ltd. (100.00%) |
| • | KB Asset Management Co., Ltd. (100.00%) |
| • | KB Capital Co., Ltd. (52.02%) |
| • | KB Savings Bank Co., Ltd. (100.00%) |
| • | KB Real Estate Trust Co., Ltd. (100.00%) |
| • | KB Investment Co., Ltd. (100.00%) |
| • | KB Credit Information Co., Ltd. (100.00%) |
| • | KB Data Systems Co., Ltd. (100.00%) |
| 6. | Directors, Senior Management and Employees |
| 6.1. | Executive Directors |
As of December 31, 2015 and March 28, 2016, we had one executive director. The name and position of our executive director and the number of shares of KB Financial Group’s common stock he owned as of March 28, 2016 are set forth below.
| Name |
Date of Birth |
Position |
Common Shares Owned | |||||
| Jong Kyoo Yoon |
October 1955 | Chairman & Chief Executive Officer | 10,000 | |||||
| 6.2. | Non-standing Directors |
As of December 31, 2015 and March 28, 2016, we had one non-standing director. The name and position of our non-standing director and the number of shares of KB Financial Group’s common stock he owned as of March 28, 2016 are set forth below.
| Name |
Date of Birth |
Position |
Common Shares Owned | |||||
| Hong Lee |
April 1958 | Non-standing Director | 459 | |||||
23
| 6.3. | Non-executive Directors |
Our non-executive directors and the number of shares of KB Financial Group’s common stock they respectively owned as of March 28, 2016 are as follows.
| Name |
Date of Birth |
Position |
Common Shares Owned |
|||||
| Young Hwi Choi |
October 1945 | Non-executive Director | — | |||||
| Suk Ryul Yoo |
April 1950 | Non-executive Director | — | |||||
| Michael Byungnam Lee |
September 1954 | Non-executive Director | 1,020 | |||||
| Jae Ha Park |
November 1957 | Non-executive Director | — | |||||
| Eunice Kyonghee Kim |
March 1959 | Non-executive Director | — | |||||
| Jongsoo Han |
October 1960 | Non-executive Director | — | |||||
Notes: Changes in senior management after the reporting period:
| • | Mr. Woon Youl Choi’s term as a non-executive director ended on March 26, 2016. |
| 6.4. | Senior Management |
In addition to our executive director who is also our executive officer, we currently have the following twelve executive officers as of March 28, 2016.
| Name |
Date of Birth |
Position |
Common Shares Owned | |||||
| Ok Chan Kim |
July 1956 | President & Chief Operating Officer | 4,674 | |||||
| Ki Heon Kim |
October 1955 | Deputy President; IT Planning Department | — | |||||
| Jungsoo Huh |
August 1960 | Senior Managing Director; Financial Planning Department, Insurance Unit and Investor Relations Department | 579 | |||||
| Dong Cheol Lee |
October 1961 | Senior Managing Director; Strategic Planning Department and Synergy Management Department | — | |||||
| Young-Tae Park |
December 1961 | Senior Managing Director; Information Security Department and Data Analytics Department | 450 | |||||
| Jae Hong Park |
April 1967 | Senior Managing Director; Global Business Department | — | |||||
| Kyung Yup Cho |
September 1961 | Senior Managing Director; KB Research | 800 | |||||
| Ki Hwan Kim |
March 1963 | Managing Director; Risk Management Department and Model Validation Unit | 321 | |||||
| Hong Seob Shin |
September 1962 | Managing Director; Public Relations Department and Design Unit | 580 | |||||
| Pil Kyu Im |
March 1964 | Managing Director and Chief Compliance Officer | 445 | |||||
| Young Hyuk Jo |
April 1963 | Managing Director and enforcement officer of the Internal Audit; Audit Department | 1 | |||||
| Dae Myeong Kang |
September 1963 | Managing Director; Future Finance Department | 455 | |||||
24
Notes: Changes in senior management after the reporting period:
| • | As of January 1, 2016, Mr. Dong Cheol Lee was newly appointed as a senior managing director and Messrs. Hong Seob Shin, Pil Kyu Im and Young Hyuk Jo were newly appointed as managing directors. As of January 8, Mr. Dae Myeong Kang was newly appointed as a managing director. As of January 11, 2016, Mr. Ok Chan Kim was newly named as president and chief operating officer. As of March 18, 2016, Mr. Jungsoo Huh was newly appointed as a senior managing director. As of January 1, 2016, Messrs. Young-Tae Park and Kyung Yup Cho were promoted from managing directors to senior managing directors. On January 1, 2016, Messrs. Jong Hee Yang, Ki-Bum Lee, Kyu Sul Choi, and Minkyu Chung resigned their posts at KB Financial Group. |
As of March 28, 2016, following management also serves as senior management at our subsidiaries.
| Name |
Subsidiary |
Position |
Appointment date | |||||
| Jong Kyoo Yoon |
Kookmin Bank | President and Chief Executive Officer | November 2014 | |||||
| Ki Heon Kim |
Kookmin Bank | Senior Executive Vice President; Head of IT Group | January 2015 | |||||
| Jae Hong Park |
Kookmin Bank | Senior Managing Director; Head of Global Business | January 2016 | |||||
| Ki Hwan Kim |
Kookmin Bank | Managing Director; Head of Risk Management Group | January 2016 | |||||
| Hong Seob Shin |
Kookmin Bank | Managing Director; Head of Consumer Brand Strategy Group | January 2016 | |||||
| Dae Myeong Kang |
Kookmin Bank | Managing Director; Acting Head of Future Channel Group | January 2016 | |||||
| Dong Cheol Lee |
Kookmin Card | Non-standing director | January 2016 | |||||
| Hong Lee |
Kookmin Bank | Senior Executive Vice President, Head of Strategy & Finance Planning Group | January 2016 | |||||
| 6.5. | Employees |
The following table shows the breakdown of our employees as of December 31, 2015.
| (Unit: in millions of Won) | ||||||||||||||||
| Number of Employees |
Average Tenure of Employees (months) |
Total Payment | Average Payment per Person (1) |
|||||||||||||
| Total |
181 | 29 months | 19,817 | 109 | ||||||||||||
| (1) | Represents (i) the total amount paid for the year ended December 31, 2015 divided by (ii) the total number of employees as of December 31, 2015. |
| 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, 2015.
| (Unit: shares, %) | ||||||||
| Name |
Number of Shares of Common Stock | Percentage of Total Issued Shares | ||||||
| Korean National Pension Service |
35,534,667 | 9.20 | ||||||
| JP Morgan Chase Bank(1) |
31,167,755 | 8.07 | ||||||
| (1) | Depositary under the Company’s ADR program. |
25
| 7.2. | Changes in the Largest Shareholder |
| (As of December 31, 2015) | (Unit: shares, %) | |||||||||
| Name of Largest Shareholder |
Date of Change in Largest Shareholder/ Date of Change in Ownership Level |
Number of Shares of Common Stock |
Percentage of Total Issued Shares(1) |
|||||||
| Korean National Pension Service |
September 30, 2008 | 17,910,781 | 5.03 | |||||||
| ING Bank N.V. |
October 20, 2008 | 18,045,337 | 5.06 | |||||||
| Korean National Pension Service |
October 31, 2008 | 21,675,810 | 6.08 | |||||||
| Korean National Pension Service |
December 31, 2008 | 23,284,404 | 6.53 | |||||||
| Korean National Pension Service |
February 4, 2009 | 23,271,087 | 6.53 | |||||||
| Korean National Pension Service |
March 27, 2009 | 22,548,541 | 6.33 | |||||||
| Korean National Pension Service |
May 29, 2009 | 19,653,362 | 5.52 | |||||||
| Korean National Pension Service |
July 27, 2009 | 19,673,220 | 5.52 | |||||||
| Korean National Pension Service |
September 2, 2009 | 21,199,372 | 5.49 | |||||||
| Korean National Pension Service |
December 7, 2009 | 20,321,051 | 5.26 | |||||||
| Korean National Pension Service |
December 31, 2009 | 20,046,217 | 5.19 | |||||||
| ING Bank N.V. |
January 22, 2010 | 19,401,044 | 5.02 | |||||||
| Korean National Pension Service |
July 8, 2011 | 23,650,699 | 6.12 | |||||||
| Korean National Pension Service |
December 31, 2011 | 26,510,171 | 6.86 | |||||||
| Korean National Pension Service |
March 14, 2012 | 27,894,880 | 7.22 | |||||||
| Korean National Pension Service |
August 1, 2012 | 31,817,770 | 8.24 | |||||||
| Korean National Pension Service |
December 31, 2012 | 33,158,257 | 8.58 | |||||||
| Korean National Pension Service |
June 12, 2013 | 34,479,641 | 8.92 | |||||||
| Korean National Pension Service |
July 23, 2013 | 35,699,841 | 9.24 | |||||||
| Korean National Pension Service |
December 31, 2013 | 38,476,974 | 9.96 | |||||||
| Korean National Pension Service |
October 14, 2014 | 36,750,987 | 9.51 | |||||||
| Korean National Pension Service |
December 31, 2014 | 36,383,211 | 9.42 | |||||||
| Korean National Pension Service |
December 31, 2015 | 35,534,667 | 9.20 | |||||||
Note: The date of change in largest shareholder / change in ownership level is the date as indicated on the public filing disclosing relevant changes in shareholdings in the Company.
| (1) | Based on 386,351,693 total issued shares of common stock for dates on or after September 2, 2009, and 356,351,693 total issued shares of common stock for dates on or prior to July 27, 2009. |
| 7.3. | Employee Stock Ownership Association |
| (As of December 31, 2015) | (Unit: shares) | |||||||
| Company Name |
Number of shares | Type of shares | ||||||
| KB Financial Group Inc. |
15,168 | Common Stock | ||||||
| Kookmin Bank |
1,958,469 | Common Stock | ||||||
| KB Insurance Co., Ltd. |
— | — | ||||||
| KB Kookmin Card Co., Ltd. |
94,033 | Common Stock | ||||||
| KB Investment & Securities Co., Ltd. |
11,995 | Common Stock | ||||||
| KB Life Insurance Co., Ltd. |
11,583 | Common Stock | ||||||
| KB Asset Management Co., Ltd. |
4,287 | Common Stock | ||||||
| KB Capital Co., Ltd. |
— | — | ||||||
| KB Savings Bank Co., Ltd. |
752 | Common Stock | ||||||
| KB Real Estate Trust Co., Ltd. |
8,255 | Common Stock | ||||||
| KB Investment Co., Ltd. |
2,236 | Common Stock | ||||||
| KB Credit Information Co., Ltd. |
7,027 | Common Stock | ||||||
| KB Data Systems Co., Ltd. |
9,947 | Common Stock | ||||||
|
|
|
|
|
|||||
| Total |
2,123,752 | Common Stock | ||||||
|
|
|
|
|
|||||
26
| 7.4. | Investments in Certain Affiliated Companies |
| (As of December 31, 2015) | (Units: shares, millions of Won, %) | |||||||||||||||||||
| Name |
Ending Balance | Total Assets as of the latest fiscal year(1) |
Net Income (loss) for the latest fiscal year(1) |
|||||||||||||||||
| Number of shares |
Shareholding percentage |
Book value | ||||||||||||||||||
| Kookmin Bank |
404,379,116 | 100 | 14,821,721 | 285,528,354 | 1,055,713 | |||||||||||||||
| KB Insurance Co., Ltd. (2) |
19,972,759 | 33.29 | 883,065 | 26,503,642 | 173,736 | |||||||||||||||
| KB Kookmin Card Co., Ltd. |
92,000,000 | 100 | 1,953,175 | 16,123,021 | 354,614 | |||||||||||||||
| KB Investment & Securities Co., Ltd. |
31,588,314 | 100 | 507,212 | 6,034,407 | 47,097 | |||||||||||||||
| KB Life Insurance Co., Ltd. |
91,200,000 | 100 | 485,314 | 8,515,416 | 12,637 | |||||||||||||||
| KB Asset Management Co., Ltd. |
7,667,550 | 100 | 96,312 | 223,470 | 24,581 | |||||||||||||||
| KB Capital Co., Ltd. |
11,180,630 | 52.02 | 279,870 | 5,587,682 | 63,087 | |||||||||||||||
| KB Savings Bank Co., Ltd. |
8,001,912 | 100 | 157,544 | 847,639 | 14,424 | |||||||||||||||
| KB Real Estate Trust Co., Ltd. |
16,000,000 | 100 | 121,553 | 223,821 | 20,289 | |||||||||||||||
| KB Investment Co., Ltd. |
8,951,797 | 100 | 104,910 | 143,259 | 4,939 | |||||||||||||||
| KB Credit Information Co., Ltd. |
1,252,400 | 100 | 23,621 | 30,142 | -336 | |||||||||||||||
| KB Data Systems Co., Ltd. |
800,000 | 100 | 6,334 | 28,388 | -140 | |||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|||||||||||
| Total |
— | — | 19,440,631 | 349,789,241 | 1,770,641 | |||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|||||||||||
| (1) | Based on K-IFRS (on a separate basis), other than amounts for KB Savings Bank Co., Ltd., which were prepared in accordance with generally accepted accounting principles in Korea (K-GAAP) and were as of June 30, 2015. The fiscal year of KB Savings Bank Co., Ltd. ends on June 30 of each year. |
| (2) | KB Insurance was added as a non-consolidated first-tier subsidiary on June 24, 2015 |
27
| 7.5. | Related Party Transactions |
| 7.5.1. | Purchase of capital securities issued by KB Capital Co., Ltd. |
| (Unit: billions of Won) | ||||||||||||||||||||
| Issuer |
Relationship | Type |
Issue Price | 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: billions of Won) | ||||||||||||||||||||
| Issuer |
Relationship | Type |
Issue Price | 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 | ||||||||||||
| 7.5.2. | Prepayments and Loans to Subsidiaries |
| (Unit: billions of Won) | ||||||||||||||||||||
| Name |
Relationship | Account | Loan Amount |
Current Balance |
Interest Rate |
Maturity | ||||||||||||||
| KB Investment Co., Ltd. |
Subsidiary | Loans | 20 | 0 | CD 3M + 94 bps | Repaid on February 23, 2015 | ||||||||||||||
28
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, 2016 |
By: /s/ Jungsoo Huh | |||
| (Signature) | ||||
| Name: | Jungsoo Huh | |||
| Title: | Senior Managing Director | |||
29