KB FINANCIAL GROUP INC. KB Financial Group Inc.
Separate Interim Financial Statements
September 30, 2023 and 2022
(Unaudited)
KB Financial Group Inc. | |
Page(s) | |
Report on Review of Condensed Separate Interim Financial Statements…….... | 1-2 |
Separate Interim Financial Statements | |
Separate Interim Statements of Financial Position | 3 |
Separate Interim Statements of Comprehensive Income ...……..……………..……… | 4 |
Separate Interim Statements of Changes in Equity | 5 |
Separate Interim Statements of Cash Flows……………………………… | 6 |
Notes to the Separate Interim Financial Statements……………………………...… | 7 |
Report on Review of Condensed Separate Interim Financial Statements
(English Translation of a Report Originally Issued in Korean)
To the Shareholders and the Board of Directors of
KB Financial Group Inc.
Reviewed Financial Statements
We have reviewed the accompanying condensed separate interim financial statements of KB Financial Group Inc. (the "Company"). These condensed separate interim financial statements consist of the separate interim statement of financial position of the Company as of September 30, 2023 and the related separate interim statements of comprehensive income for the three-month and nine-month period ended September 30, 2023, changes in equity and cash flows for the nine-month period ended September 30, 2023, and material accounting policies and other selected explanatory notes, expressed in Korean Won.
Management's Responsibility for the Financial Statements
Management is responsible for the preparation and presentation of these condensed separate interim financial statements in accordance with International Financial Reporting Standards as adopted by the Republic of Korea ("Korean IFRS") No.1034 Interim Financial Reporting, and for such internal control as management determines is necessary to enable the preparation of condensed separate interim financial statements that are free from material misstatement, whether due to fraud or error.
Auditor's Responsibility
Our responsibility is to issue a report on these condensed separate interim financial statements based on our review.
We conducted our review in accordance with quarterly or semi-annual review standards established by the Securities and Futures Commission of the Republic of Korea. A review of interim financial information consists of making inquiries, primarily of persons responsible for financial and accounting matters, and applying analytical and other review procedures. A review is substantially less in scope than an audit conducted in accordance with Korean Standards on Auditing and consequently does not enable us to obtain assurance that we would become aware of all significant matters that might be identified in an audit. Accordingly, we do not express an audit opinion.
Conclusion
Based on our review, nothing has come to our attention that causes us to believe the accompanying condensed separate interim financial statements are not prepared, in all material respects, in accordance with Korean IFRS 1034 Interim Financial Reporting.
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Other Matters
The separate interim statements of comprehensive income for the three-month and nine-month period ended September 30, 2022, changes in equity and cash flows for the nine-month period ended on September 30, 2022, presented herein for comparative purposes, were reviewed by another auditor who expressed their review conclusion that nothing has come to their attention that causes them to believe the condensed separate interim financial statements do not present fairly, in all material respects, in accordance with Korean IFRS No. 1034 Interim Financial Reporting on November 14, 2022.
The separate statement of financial position as of December 31, 2022, and the separate statements of comprehensive income, changes in equity and cash flows for the year then ended, not presented herein, were audited by another auditor who expressed an unqualified opinion on those statements on March 7, 2023. The separate statement of financial position as of December 31, 2022, presented herein for comparative purposes, is consistent, in all material respects, with the above audited statement of
financial position as of December 31, 2022.
Review standards and their application in practice vary among countries. The procedures and practices used in the Republic of Korea to review such financial statements may differ from those generally accepted and applied in other countries.
/s/ Samil PricewaterhouseCoopers Seoul, Korea
November14, 2023
This report is effective as of November 14, 2023, the review report date. Certain subsequent events or circumstances, which may occur between the review report date and the time of reading this report, could have a material impact on the accompanying condensed separate interim financial statements and notes thereto. Accordingly, the readers of the review report should understand that there is a possibility that the above review report may have to be revised to reflect the impact of such subsequent events or circumstances, if any.
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KB Financial Group Inc.
Separate Interim Statements of Financial Position
September 30, 2023 and December 31, 2022
(In millions of Korean won) | ||||
September 30, 2023 | ||||
Notes | (Unaudited) | December 31, 2022 | ||
Assets | ||||
Cash and due from financial institutions | 4,5,6,23 ￦ | 719,003 | ￦ | 351,056 |
Financial assets at fair value through profit or loss | 4,5,7 | 1,545,554 | 1,522,314 | |
Loans measured at amortized cost | 4,5,8 | 608,603 | 522,326 | |
Investments in subsidiaries | 9 | 26,717,817 | 26,741,438 | |
Property and equipment | 3,592 | 3,552 | ||
Intangible assets | 16,029 | 16,752 | ||
Net defined benefit assets | 13 | 3,052 | 4,288 | |
Deferred income tax assets | 10 | 12,544 | 19,904 | |
Other assets | 4,5 | 672,509 | 1,272,197 | |
Total assets | ￦ | 30,298,703 | ￦ | 30,453,827 |
Liabilities | ||||
Borrowings | 4,5,11 | 100,000 | - | |
Debentures | 4,5,12 | 4,050,636 | 4,956,949 | |
Current income tax liabilities | 271,970 | 926,573 | ||
Other liabilities | 4,5 | 392,128 | 338,489 | |
Total liabilities | 4,814,734 | 6,222,011 | ||
Equity | 14 | |||
Share capital | 2,090,558 | 2,090,558 | ||
Hybrid securities | 5,032,518 | 4,433,981 | ||
Capital surplus | 14,749,200 | 14,754,747 | ||
Accumulated other comprehensive loss | (5,885) | (5,847) | ||
Retained earnings | 4,585,365 | 3,794,565 | ||
Treasury shares | (967,787) | (836,188) | ||
Total equity | 25,483,969 | 24,231,816 | ||
Total liabilities and equity | ￦ | 30,298,703 | ￦ | 30,453,827 |
The above separate interim statements of financial position should be read in conjunction with the accompanying notes.
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KB Financial Group Inc.
Separate Interim Statements of Comprehensive Income
Three-Month and Nine-Month Periods Ended September 30, 2023 and 2022
(In millions of Korean won, except per share amounts)
2023 | 2022 | ||||||||
Notes | (Unaudited) | (Unaudited) | |||||||
Three months | Nine months | Three months | Nine months | ||||||
Interest income | ￦ | 9,233 | ￦ | 27,382 | ￦ | 4,921 | ￦ | 12,406 | |
Interest income from financial instruments at | |||||||||
amortized cost | 8,537 | 24,888 | 4,249 | 10,414 | |||||
Interest income from financial instruments at fair value | |||||||||
through profit or loss | 696 | 2,494 | 672 | 1,992 | |||||
Interest expense | (24,458) | (76,041) | (29,359) | (83,951) | |||||
Net interest expense | 16 | (15,225) | (48,659) | (24,438) | (71,545) | ||||
Fee and commission income | 407 | 1,188 | 417 | 1,576 | |||||
Fee and commission expense | (2,546) | (7,663) | (1,380) | (6,674) | |||||
Net fee and commission expense | 17 | (2,139) | (6,475) | (963) | (5,098) | ||||
Net gains (losses) on financial instruments at fair value | |||||||||
through profit or loss | 18 | 9,818 | 61,488 | (230) | (17,090) | ||||
Net other operating income | 19 | - | 2,192,380 | 200,000 | 1,871,224 | ||||
General and administrative expenses | 20 | (23,055) | (68,936) | (21,428) | (63,074) | ||||
Operating income (loss) before | |||||||||
provision for credit losses | (30,601) | 2,129,798 | 152,941 | 1,714,417 | |||||
Provision for credit losses | (223) | (230) | (209) | (211) | |||||
Net operating income (loss) | (30,824) | 2,129,568 | 152,732 | 1,714,206 | |||||
Net non-operating income (expenses) | 42 | 4,448 | 988 | 553 | |||||
Profit (loss) before income tax benefit | (30,782) | 2,134,016 | 153,720 | 1,714,759 | |||||
Income tax benefit | 21 | 948 | (7,373) | 4,216 | 12,860 | ||||
Profit (loss) for the period | (29,834) | 2,126,643 | 157,936 | 1,727,619 | |||||
Items that will not be reclassified to profit or loss: | |||||||||
Remeasurements of net defined benefit liabilities | (63) | (38) | (74) | (355) | |||||
Other comprehensive loss for the period, net of tax | (63) | (38) | (74) | (355) | |||||
Total comprehensive income (loss) for the period | ￦ | (29,897) | ￦ | 2,126,605 | ￦ | 157,862 | ￦ | 1,727,264 | |
Earnings (loss) per share | 22 | ||||||||
Basic earnings (loss) per share | ￦ | (203) | ￦ | 5,164 | ￦ | 317 | ￦ | 4,214 | |
Diluted earnings (loss) per share | (197) | 5,050 | 311 | 4,120 |
The above separate interim statements of comprehensive income should be read in conjunction with the accompanying notes.
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KB Financial Group Inc.
Separate Interim Statements of Changes in Equity
Nine-Month Periods Ended September 30, 2023 and 2022
(In millions of Korean won)
Accumulated | ||||||||||||||
other | ||||||||||||||
Share | Hybrid | Capital | comprehensive | Retained | Treasury | Total | ||||||||
capital | securities | surplus | income | earnings | shares | equity | ||||||||
Balance as of January 1, 2022 | ￦ | 2,090,558 | ￦ | 2,837,981 | ￦ | 14,754,747 | ￦ | (8,330) | ￦ | 3,974,206 | ￦ | (1,136,188) | ￦ | 22,512,974 |
Comprehensive income for the period | ||||||||||||||
Profit for the period | - | - | - | - | 1,727,619 | - | 1,727,619 | |||||||
Remeasurements of net defined benefit liabilities | - | - | - | (355) | - | - | (355) | |||||||
Total comprehensive income for the period | - | - | - | (355) | 1,727,619 | - | 1,727,264 | |||||||
Transactions with shareholders | ||||||||||||||
Annual dividends | - | - | - | - | (853,299) | - | (853,299) | |||||||
Quarterly dividends | - | - | - | - | (389,634) | - | (389,634) | |||||||
Retirement of treasury shares | - | - | - | - | (300,000) | 300,000 | - | |||||||
Issuance of hybrid securities | - | 1,596,000 | - | - | - | - | 1,596,000 | |||||||
Dividends on hybrid securities | - | - | - | - | (85,698) | - | (85,698) | |||||||
Total transactions with shareholders | - | 1,596,000 | - | - | (1,628,631) | 300,000 | 267,369 | |||||||
Balance as of September 30, 2022 (Unaudited) | ￦ | 2,090,558 | ￦ | 4,433,981 | ￦ | 14,754,747 | ￦ | (8,685) | ￦ | 4,073,194 | ￦ | (836,188) | ￦ | 24,507,607 |
Balance as of January 1, 2023 | ￦ | 2,090,558 | ￦ | 4,433,981 | ￦ | 14,754,747 | ￦ | (5,847) | ￦ | 3,794,565 | ￦ | (836,188) | ￦ | 24,231,816 |
Comprehensive income for the period | ||||||||||||||
Profit for the period | - | - | - | - | 2,126,643 | - | 2,126,643 | |||||||
Remeasurements of net defined benefit liabilities | - | - | - | (38) | - | - | (38) | |||||||
Total comprehensive income for the period | - | - | - | (38) | 2,126,643 | - | 2,126,605 | |||||||
Transactions with shareholders | ||||||||||||||
Annual dividends | - | - | - | - | (564,970) | - | (564,970) | |||||||
Quarterly dividends | - | - | - | - | (391,933) | - | (391,933) | |||||||
Acquisition of treasury shares | - | - | - | - | - | (373,695) | (373,695) | |||||||
Retirement of treasury shares | - | - | - | - | (242,096) | 242,096 | - | |||||||
Issuance of hybrid securities | - | 598,537 | - | - | - | - | 598,537 | |||||||
Dividends on hybrid securities | - | - | - | - | (136,844) | - | (136,844) | |||||||
Others | - | - | (5,547) | - | - | - | (5,547) | |||||||
Total transactions with shareholders | - | 598,537 | (5,547) | - | (1,335,843) | (131,599) | (874,452) | |||||||
Balance as of September 30, 2023 (Unaudited) | ￦ | 2,090,558 | ￦ | 5,032,518 | ￦ | 14,749,200 | ￦ | (5,885) | ￦ | 4,585,365 | ￦ | (967,787) | ￦ | 25,483,969 |
The above separate interim statements of changes in equity should be read in conjunction with the accompanying notes.
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KB Financial Group Inc.
Separate Interim Statements of Cash Flows
Nine-Month Periods Ended September 30, 2023 and 2022
(In millions of Korean won) | |||||
2023 | 2022 | ||||
Notes | (Unaudited) | (Unaudited) | |||
Cash flows from operating activities | |||||
Profit for the period | ￦ | 2,126,643 | ￦ | 1,727,619 | |
Adjustment for non-cash items | |||||
Depreciation and amortization expense | 4,071 | 4,486 | |||
Reversal of provision for credit losses | 230 | 211 | |||
Share-based payments | 7,020 | 2,282 | |||
Net interest expense | 2,765 | 2,477 | |||
Valuation losses (gains) on financial assets | |||||
at fair value through profit or loss | (22,024) | 41,846 | |||
Disposal gains of subsidiaries | (3,917) | - | |||
Other expenses | 1,251 | 1,633 | |||
(10,604) | 52,935 | ||||
Changes in operating assets and liabilities | |||||
Due from financial institutions | (20,000) | (30,000) | |||
Deferred income tax assets | 7,373 | (12,860) | |||
Other assets | (13,537) | 385,648 | |||
Other liabilities | 5,942 | (578,875) | |||
(20,222) | (236,087) | ||||
Net cash inflow from operating activities | 2,095,817 | 1,544,467 | |||
Cash flows from investing activities | |||||
Acquisition of financial assets at fair value through profit or loss | (300,000) | (830,000) | |||
Disposal of financial assets at fair value through profit of loss | 300,000 | - | |||
Disposal of subsidiaries | 27,539 | - | |||
Acquisition of loans measured at amortized cost | (86,500) | (60,000) | |||
Acquisition of property and equipment | (184) | (1,425) | |||
Acquisition of intangible assets | (2,621) | (965) | |||
Disposal of intangible assets | 1,234 | 20 | |||
Net decrease (increase) in guarantee deposits paid | (7,719) | (2,325) | |||
Other investing activities | (395) | (824) | |||
Net cash inflow (outflow) from investing activities | (68,646) | (895,519) | |||
Cash flows from financing activities | |||||
Decrease in borrowings | 100,000 | - | |||
Increase in debentures | 109 | 498,898 | |||
Decrease in debentures | (910,000) | (1,020,000) | |||
Dividends paid to shareholders | (956,903) | (1,242,933) | |||
Redemption of principal elements of lease payments | (428) | (396) | |||
Acquisition of treasury shares | (373,695) | - | |||
Issuance of hybrid securities | 598,537 | 1,596,000 | |||
Dividends paid on hybrid securities | (136,844) | (85,698) | |||
Net cash inflow (outflow) from financing activities | (1,679,224) | (254,129) | |||
Net increase in cash and cash equivalents | 347,947 | 394,819 | |||
Cash and cash equivalents at the beginning of the period | 23 | 231,053 | 518,073 | ||
Cash and cash equivalents at the end of the period | 23 | ￦ | 579,000 | ￦ | 912,892 |
The above condensed separate interim statements of cash flows should be read in conjunction with the accompanying notes.
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KB Financial Group Inc.
Notes to the Separate Interim Financial Statements
September 30, 2023 and 2022 (Unaudited), and December 31,2022
1. The Company
KB Financial Group Inc. (the "Company"), in accordance with Financial Holding Companies Act, was established on September 29, 2008, through stock transfers with the former shareholders of Kookmin Bank, KB Investment
- Securities Co., Ltd., KB Asset Management Co., Ltd., KB Real Estate Trust Co., Ltd., KB Investment Co., Ltd., KB Futures Co., Ltd., KB Credit Information Co., Ltd., and KB Data Systems Co., Ltd., and the Company's main business purpose is to control subsidiaries that engage in the financial business or subsidiaries closely related to the financial business through the stock ownership. The headquarter is located at 26, Gukjegeumyung-ro 8- gil, Yeongdeungpo-gu, Seoul. The Company's share capital as of September 30, 2023, is ₩ 2,090,558 million. In 2011, Kookmin Bank spun off its credit card business segment and established a new separate credit card company, KB Kookmin Card Co., Ltd., and KB Investment & Securities Co., Ltd. merged with KB Futures Co., Ltd. The Company established KB Savings Bank Co., Ltd. in January 2012, acquired Yehansoul Savings Bank Co., Ltd. in September 2013, and KB Savings Bank Co., Ltd. merged with Yehansoul Savings Bank Co., Ltd. in January 2014. In March 2014, the Company acquired Woori Financial Co., Ltd. and changed the name to KB Capital Co., Ltd. Meanwhile, the Company included LIG Insurance Co., Ltd. as an associate and changed the name to KB Insurance Co., Ltd. in June 2015, and KB Insurance Co., Ltd. became one of the subsidiaries through a tender offer in May 2017. Also, the Company included Hyundai Securities Co., Ltd. as an associate in June 2016 and included as a subsidiary in October 2016 by comprehensive exchange of shares. Hyundai Securities Co., Ltd. merged with KB Investment & Securities Co., Ltd. in December 2016 and changed its name to KB Securities Co., Ltd. in January 2017. In August 2020, the Group acquired Prudential Life Insurance Company of Korea Ltd. which was classified as a subsidiary and the name was changed to KB Life Insurance Co., Ltd. in December 2022. Then in January 2023, it merged with another existing KB Life Insurance Co., Ltd. The Company sold 100% shares of KB Credit Information Co., Ltd. to KB Kookmin Card Co., Ltd. on June 30, 2023.
The Company has been listed on the Korea Exchange ("KRX") since October 10, 2008, and on the New York Stock Exchange ("NYSE") for its American Depositary Shares ("ADS") since September 29, 2008. Number of shares authorized on its Articles of Incorporation is 1,000 million.
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KB Financial Group Inc.
Notes to the Separate Interim Financial Statements
September 30, 2023 and 2022 (Unaudited), and December 31,2022
2. Basis of Preparation
2.1 Application of Korean IFRS
The Company maintains its accounting records in Korean won and prepares statutory financial statements in the Korean language in accordance with International Financial Reporting Standards as adopted by the Republic of Korea ("Korean IFRS"). The accompanying separate financial statements have been translated into English from the Korean language separate financial statements.
The separate financial statements of the Company have been prepared in accordance with Korean IFRS. Korean IFRS are the standards and related interpretations issued by the International Accounting Standards Board ("IASB") that have been adopted by the Republic of Korea.
The preparation of separate financial statements requires the use of certain critical accounting estimates. Management also needs to exercise judgment in applying the Company's accounting policies. The areas that require a more complex and higher level of judgment or areas that require significant assumptions and estimations are disclosed in Note 2.4.
The separate financial statements have been prepared in accordance with Korean IFRS No.1027 Separate Financial Statements.
The Company's condensed separate interim financial statements for the nine-month period ended September 30, 2023, have been prepared in accordance with Korean IFRS No.1034 Interim Financial Reporting and contain less information than is required in annual separate financial statements. Selected explanatory notes include descriptions of transactions or events that are significant in understanding change in financial position and financial performance of the Company since the end of the previous annual reporting period. These condensed separate interim financial statements have been prepared in accordance with Korean IFRS which is effective or early adopted as of September 30, 2023.
2.1.1 The Company has applied the following new and amended standards for the first time for its annual reporting period commencing January 1, 2023.
- Issuance of Korean IFRS No.1117 Insurance Contracts
Korean IFRS No.1117 Insurance Contracts replaced Korean IFRS No.1104 Insurance Contracts. This standard requires an entity to estimate future cash flows of an insurance contract and measure insurance liabilities using discount rates applied with assumptions and risks at the measurement date and recognize insurance revenue on an accrual basis including services (insurance coverage) provided to the policyholder by each annual reporting period. In addition, investment components (refunds due to termination and maturity) repaid to a policyholder even if an insured event does not occur, are excluded from insurance revenue. These amendments do not have a significant impact on the financial statements.
- Amendments to Korean IFRS No.1001 Presentation of Financial Statements - Accounting Policy Disclosure
The amendments require an entity to define and disclose their material accounting policy information. IFRS Practice Statement 2 Making Materiality Judgements was amended to explain and demonstrate how to apply the concept of materiality. These amendments do not have a significant impact on the financial statements.
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KB Financial Group Inc. published this content on 14 November 2023 and is solely responsible for the information contained therein. Distributed by Public, unedited and unaltered, on 17 November 2023 09:23:06 UTC.
