Form 6-K

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 November 2022

Commission File Number: 000-53445

KB Financial Group Inc.

(Translation of registrant’s name into English)

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

(Address of principal executive office)

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

Form 20-F ☒ Form 40-F ☐

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

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

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

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

Index

1. Summary of the 2022 Third Quarter Business Report

2. Exhibit 99.1 KB Financial Group Review Report for the Third Quarter of 2022 (Consolidated)

3. Exhibit 99.2 KB Financial Group Review Report for the Third Quarter of 2022 (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.		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 2022 Third Quarter Business Report

On November 14, 2022, KB Financial Group Inc. (“KB Financial Group” or the “Group”) filed its business report for the third quarter of 2022 (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.

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

[No longer required to be disclosed in quarterly reports pursuant to revised Korean regulations]

1.3.

Overview of the Business Group

[No longer required to be disclosed in quarterly reports pursuant to revised Korean regulations]

1.4.

Capital Structure

1.4.1.

Common Shares

Changes in Capital


(As of September 30, 2022)						(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⁾


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

[No longer required to be disclosed in quarterly reports pursuant to revised Korean regulations]

1.4.2.

Voting Rights

[No longer required to be disclosed in quarterly reports pursuant to revised Korean regulations]

1.5.

Dividends

KB Financial Group maintains a progressive dividend policy and aims to increase its payout ratio to 30% in the mid- to long-term, and also plans to consider acquiring and cancelling treasury shares to improve shareholder return depending on market conditions.

Although KB Financial Group has continued to increase its payout ratio, for example, from 24.8% in 2018 to 26% in 2019, it has decided on a payout ratio of 20% in 2020 based on the Financial Services Commission’s recommendation to temporarily limit the payout ratio to 20% in consideration of uncertainties related to the COVID-19 pandemic.

Following the termination of the Financial Services Commission’s recommendation as described above in 2021, KB Financial Group, for the first time in its history, announced a quarterly dividend of Won 750 per share as of June 30, 2021. KB Financial Group increased its payout ratio from 20% in 2020 to 26% in 2021, which was the same level of payout ratio as in 2019.

Starting with the first quarter of 2022, KB Financial Group has regularized the payout of a quarterly cash dividend of Won 500 per share each quarter, and it is targeting a payout ratio in 2022 that will be at least the same level as the payout ratio in 2021, which was 26%. The Group is continuing to strive to improve its shareholder value by pursuing various shareholder return policies, as demonstrated by its two cancellations of treasury shares in 2022, which were each completed in February and August of 2022.


	(Unit: in millions of Won, except per share amounts and percentages)
Items			January 1, 2022 to September 30, 2022⁽¹⁾		January 1, 2021 to December 31, 2021⁽²⁾		January 1, 2020 to December 31, 2020⁽³⁾
Par value per share (Won)				5,000		5,000		5,000
(Consolidated) Net income				4,027,948		4,409,543		3,455,151
(Consolidated) Earnings per share (Won)				10,118		11,134		8,809
Total cash dividends				584,451		1,145,525		689,653
Total stock dividends				—		—		—
(Consolidated) Cash dividend payout ratio (%)				14.5		26.0		20.0
Cash dividend yield (%)		Common shares		3.2		5.2		3.9
		—		—		—		—
Stock dividend yield (%)		Common shares		—		—		—
		—		—		—		—
Cash dividend per share (Won)		Common shares		1,500		2,940		1,770
		—		—		—
Stock dividend per share		Common shares		—		—
		—		—		—


Note:	(1)	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, and a quarterly dividend amount of Won 194,817 million (Won 500 per common share) in the third quarter of fiscal year 2022.
	(2)	Includes a quarterly dividend amount of Won 292,226 million (Won 750 per common share) in the second quarter of fiscal year 2021.
	(3)	The consolidated net income for fiscal year 2020 has been restated retrospectively as Won 3,468,448 million (consolidated earnings per share of Won 8,843, consolidated cash dividend payout ratio of 19.9%) to reflect the accounting policy changes in connection with the IFRIC decision regarding K-IFRS No. 1019.

1.6.

Amendments to the Articles of Incorporation

[No longer required to be disclosed in quarterly reports pursuant to revised Korean regulations]

2.	Business

2.1.

Results of Operations


							(Unit: in millions of Won)
	For the nine months ended September 30, 2022			For the nine months ended September 30, 2021			For the year ended December 31, 2021			For the year ended December 31, 2020
Net interest income		9,661,500			8,255,354			11,229,572			9,722,274
Interest income		14,377,071			11,136,688			15,210,878			14,485,747
Interest expense		(4,715,571	)		(2,881,334	)		(3,981,306	)		(4,763,473	)
Net fee and commission income		2,603,743			2,743,926			3,625,583			2,958,939
Fee and commission income		3,916,286			3,991,086			5,323,606			4,527,024
Fee and commission expense		(1,312,543	)		(1,247,160	)		(1,698,023	)		(1,568,085	)
Net insurance income		407,760			462,842			556,711			299,993
Insurance income		13,142,790			12,234,157			16,107,858			14,386,640
Insurance expense		(12,735,030	)		(11,771,315	)		(15,551,147	)		(14,086,647	)
Net gains (losses) on financial assets/liabilities at fair value through profit or loss		(526,154	)		702,841			995,304			1,011,366
Net other operating expenses		(1,090,658	)		(1,302,887	)		(1,923,567	)		(1,499,930	)
General and administrative expenses		(5,180,139	)		(5,057,497	)		(7,200,853	)		(6,814,812	)
Operating profit before provision for credit losses		5,876,052			5,804,579			7,282,750			5,677,830
Provision for credit losses		(775,124	)		(596,502	)		(1,185,133	)		(1,043,498	)
Net operating profit		5,100,928			5,208,077			6,097,617			4,634,332


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

2.2.

Sources and Uses of Funds

2.2.1.

Sources of Funds


														(Unit: in millions of Won)
		For the nine months ended September 30, 2022						For the year ended December 31, 2021						For the year ended December 31, 2020
		Average Balance		Interest Rate (%)		Ratio (%)		Average Balance		Interest Rate (%)		Ratio (%)		Average Balance		Interest Rate (%)		Ratio (%)
Won Currency	Deposits		327,131,272		1.07		48.16		309,428,469		0.74		49.09		286,168,968		1.07		50.88
	Certificate of deposit		4,991,246		1.94		0.73		3,618,303		0.87		0.57		3,635,870		1.37		0.65
	Borrowings		30,665,549		1.61		4.51		24,900,706		0.96		3.95		17,330,480		1.20		3.08
	Call money		2,031,807		1.05		0.30		1,324,902		0.65		0.21		1,617,841		0.65		0.29
	Debentures		57,303,383		2.22		8.44		57,214,310		1.82		9.08		52,843,837		2.02		9.39
	Others		15,820,095		2.18		2.33		20,305,205		0.84		3.22		19,792,619		1.01		3.52

Subtotal			437,943,352		1.31		64.47		416,791,895		0.91		66.12		381,389,615		1.21		67.81

Foreign Currency	Deposits		32,097,848		1.81		4.73		26,607,162		1.70		4.22		20,488,109		1.46		3.64
	Borrowings		20,711,504		1.58		3.05		12,976,574		1.16		2.06		12,071,802		1.81		2.15
	Call money		1,138,003		1.63		0.17		995,957		0.75		0.16		976,153		0.97		0.17
	Debentures		11,478,672		1.85		1.69		8,544,738		1.49		1.36		6,535,922		1.84		1.16
	Others		1,220,390		1.79		0.17		2,029,862		0.82		0.32		1,126,379		1.12		0.20

Subtotal			66,646,417		1.74		9.81		51,154,293		1.47		8.12		41,198,365		1.60		7.32

Others	Total shareholders’ equity		49,524,578		—		7.29		46,705,724		—		7.41		41,495,072		—		7.38
	Allowances		1,138,796		—		0.17		1,040,835		—		0.17		912,721		—		0.16
	Others		124,039,834		—		18.26		114,646,087		—		18.18		97,476,975		—		17.33

Subtotal			174,703,208		—		25.72		162,392,646		—		25.76		139,884,768		—		24.87

Total			679,292,977		—		100.00		630,338,834		—		100.00		562,472,748		—		100.00

Note:

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

2.2.2.

Uses of Funds


																		(Unit: in millions of Won)
		For the nine months ended September 30, 2022								For the year ended December 31, 2021								For the year ended December 31, 2020
		Average Balance			Interest Rate (%)		Ratio (%)			Average Balance			Interest Rate (%)		Ratio (%)			Average Balance			Interest Rate (%)		Ratio (%)
Won Currency	Due from banks		13,526,068			0.56		1.99			15,212,672			0.30		2.41			7,400,343			0.67		1.32
	Securities		151,555,906			0.78		22.31			147,320,309			1.31		23.37			125,573,646			1.97		22.33
	Loans		362,102,862			3.32		53.31			340,131,319			2.80		53.96			315,871,106			2.98		56.16
	Guarantee payments under payment guarantee		5,779			0.23		—			5,053			1.31		—			13,421			0.73		—
	Call loan		732,597			1.75		0.11			695,721			0.67		0.11			885,951			0.73		0.16
	Private placement corporate bonds		674,139			3.70		0.10			882,497			3.02		0.14			1,264,212			3.98		0.22
	Credit cards		21,673,189			6.90		3.19			19,862,308			7.09		3.15			18,560,207			7.57		3.30
	Others		3,693,452			10.00		0.54			4,193,384			6.53		0.67			4,614,823			5.04		0.82
	Allowance		(2,742,464	)		—		(0.40	)		(2,480,441	)		—		(0.39	)		(2,416,823	)		—		(0.43	)

Subtotal			551,221,528			2.75		81.15			525,822,822			2.51		83.42			471,766,886			2.89		83.88

Foreign Currency	Due from banks		8,922,721			0.52		1.31			6,868,969			0.38		1.09			6,989,553			0.64		1.24
	Securities		18,824,579			1.48		2.77			16,052,962			3.90		2.55			15,131,521			3.87		2.69
	Loans		35,214,911			5.15		5.18			26,409,776			5.05		4.19			19,818,889			4.30		3.52
	Call loan		7,751,924			1.50		1.14			3,275,072			0.45		0.52			3,149,433			0.82		0.56
	Bills bought		2,639,544			1.82		0.39			1,940,984			0.73		0.31			1,573,725			1.48		0.28
	Allowance		(1,015,839	)		—		(0.15	)		(978,088	)		—		(0.16	)		(404,041	)		—		(0.07	)
	Others		1,913,825			—		0.29			2,229,707			—		0.35			1,294,119			—		0.22

Subtotal			74,251,665			3.12		10.93			55,799,382			3.63		8.85			47,553,199			3.24		8.44

Others	Cash		1,799,472			—		0.26			1,917,967			—		0.30			1,889,892			—		0.34
	Fixed assets held for business		7,989,420			—		1.18			8,130,268			—		1.29			8,048,120			—		1.43
	Others		44,030,892			—		6.48			38,668,395			—		6.14			33,214,651			—		5.91

Subtotal			53,819,784			—		7.92			48,716,630			—		7.73			43,152,663			—		7.68

Total			679,292,977			—		100.00			630,338,834			—		100.00			562,472,748			—		100.00

Note:

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

2.3.

Other Information to Consider in Making an Investment Decision

2.3.1.

Capital Adequacy


KB Financial Group⁽¹⁾	(Unit: in billions of Won, except percentages)

	As of September 30, 2022⁽²⁾		As of December 31, 2021			As of December 31, 2020
Total capital (A)		49,609		45,883			40,080
Risk-weighted assets (B)		321,655		290,914			262,349
BIS ratio (A/B)		15.42		15.77	%		15.28	%

Notes: (1) Calculated in accordance with Basel III.

(2) Preliminary figures.


Kookmin Bank⁽¹⁾	(Unit: in billions of Won, except percentages)

	As of September 30, 2022⁽²⁾		As of December 31, 2021			As of December 31, 2020
Total capital (A)		37,291		35,572			32,555
Risk-weighted assets (B)		221,971		203,569			183,148
BIS ratio (A/B)		16.80		17.47	%		17.78	%

Notes: (1) Calculated in accordance with Basel III.

(2) Preliminary figures.


KB Securities Co., Ltd.	(Unit: in billions of Won, except percentages)

	As of September 30, 2022			As of December 31, 2021			As of December 31, 2020
Net operating capital (A)		4,526			3,982			3,656
Total amount at risk (B)		2,627			2,072			1,678
Maintenance equity margin (C)		134			134			134
Net capital ratio (A-B)/(C)		1415.2	%		1,422.3	%		1,474.1	%
Capital surplus (A-B)		1,900			1,909			1,979


KB Insurance Co., Ltd.	(Unit: in billions of Won, except percentages)

	As of September 30, 2022⁽¹⁾			As of December 31, 2021			As of December 31, 2020
Available capital (A)		4,923			4,349			3,812
Required capital (B)		2,733			2,424			2,181
RBC ratio (A/B)		180.2	%		179.4	%		174.8	%

Note:

(1) Preliminary figures.

2.3.2.

Overseas Credit Ratings

[No longer required to be disclosed in quarterly reports pursuant to revised Korean regulations]

2.3.3.

Domestic Credit Ratings

[No longer required to be disclosed in quarterly reports pursuant to revised Korean regulations]

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 30, 2021	800
Kookmin Bank		January 21, 2022	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 the remainder of 2022 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 fluctuations in oil and commodity prices, interest and exchange rate fluctuations, higher inflation and unemployment rates, lower consumer confidence, stock market and real estate market volatility and changes in fiscal and monetary policies, (ii) adverse conditions in the Korean and global economies and financial markets resulting from Russia’s invasion of Ukraine and its effects on global commodity prices, and (iii) the continuing risk of further outbreaks of COVID-19 variants and its effects on retail consumption levels.

3.	Financial Information

3.1.

Consolidated Financial Information

3.1.1.

Consolidated Statements of Financial Position


							(Unit: in millions of Won)
	As of September 30, 2022			As of December 31, 2021			As of December 31, 2020
Cash and due from financial institutions		27,496,770			31,009,374			25,608,842
Financial assets at fair value through profit or loss		61,885,282			66,005,815			61,035,455
Derivative financial assets		17,820,011			3,721,370			5,545,385
Loans measured at amortized cost		456,863,042			417,900,273			377,166,984
Financial investments		112,086,173			104,847,871			98,695,426
Investments in associates and joint ventures		698,542			448,718			771,435
Property and equipment		5,000,282			5,239,898			5,433,554
Investment property		2,691,122			2,514,944			2,533,539
Intangible assets		3,306,310			3,266,357			3,351,133
Net defined benefit assets		78,881			100,083			50,597
Current income tax assets		241,681			98,798			109,772
Deferred income tax assets		693,985			159,093			65,058
Assets held for sale		250,765			237,318			197,727
Assets of a disposal group held for sale		—			171,749			—
Other assets		37,829,136			28,174,173			30,155,037

Total assets		726,941,982			663,895,834			610,719,944

Financial liabilities at fair value through profit or loss		12,262,059			12,088,980			11,810,058
Derivative financial liabilities		19,058,733			3,682,258			5,222,897
Deposits		390,346,134			372,023,918			338,580,220
Borrowings		69,808,758			56,912,374			49,827,156
Debentures		72,363,288			67,430,188			62,760,687
Provisions		885,566			808,604			714,903
Net defined benefit liabilities		414,796			225,521			239,567
Current income tax liabilities		980,260			662,672			764,981
Deferred income tax liabilities		18,195			1,470,981			1,177,799
Insurance contract liabilities		58,996,628			57,165,936			54,415,296
Other liabilities		52,500,219			43,130,482			41,804,023

Total liabilities		677,634,636			615,601,914			567,317,587

Equity attributable to shareholders of the parent company		47,766,060			47,460,582			42,544,574
Share capital		2,090,558			2,090,558			2,090,558
Hybrid securities		4,434,251			2,838,221			1,695,988
Capital surplus		16,940,731			16,940,231			16,723,589
Accumulated other comprehensive income (loss)		(3,177,610	)		1,047,274			630,011
Accumulated other comprehensive income relating to assets of a disposal group held for sale		—			7,671			—
Retained earnings		28,314,318			25,672,815			22,540,616
Treasury shares		(836,188	)		(1,136,188	)		(1,136,188	)
Non-controlling interests		1,541,286			833,338			857,783
Total equity		49,307,346			48,293,920			43,402,357

Total liabilities and equity		726,941,982			663,895,834			610,719,944

3.1.2.

Consolidated Statements of Comprehensive Income


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

	For the nine months ended September 30, 2022			For the nine months ended September 30, 2021			For the year ended December 31, 2021			For the year ended December 31, 2020
Net interest income		9,661,500			8,255,354			11,229,572			9,722,274
Interest income		14,377,071			11,136,688			15,210,878			14,485,747
Interest income from financial instruments at fair value through other comprehensive income and amortized cost		13,793,495			10,698,240			14,620,490			13,826,382
Interest income from financial instruments at fair value through profit or loss		583,576			438,448			590,388			659,365
Interest expense		(4,715,571	)		(2,881,334	)		(3,981,306	)		(4,763,473	)
Net fee and commission income		2,603,743			2,743,926			3,625,583			2,958,939
Fee and commission income		3,916,286			3,991,086			5,323,606			4,527,024
Fee and commission expense		(1,312,543	)		(1,247,160	)		(1,698,023	)		(1,568,085	)
Net insurance income		407,760			462,842			556,711			299,993
Insurance income		13,142,790			12,234,157			16,107,858			14,386,640
Insurance expense		(12,735,030	)		(11,771,315	)		(15,551,147	)		(14,086,647	)
Net gains (losses) on financial assets/liabilities at fair value through profit or loss		(526,154	)		702,841			995,304			1,011,366
Net gains (losses) on financial instruments at fair value through profit or loss before applying overlay approach		(986,843	)		854,789			1,160,981			1,221,610
Gains (losses) on overlay adjustments		460,689			(151,948	)		(165,677	)		(210,244	)
Net other operating expenses		(1,090,658	)		(1,302,887	)		(1,923,567	)		(1,499,930	)
General and administrative expenses		(5,180,139	)		(5,057,497	)		(7,200,853	)		(6,814,812	)
Operating profit before provision for credit losses		5,876,052			5,804,579			7,282,750			5,677,830
Provision for credit losses		(775,124	)		(596,502	)		(1,185,133	)		(1,043,498	)
Net operating income		5,100,928			5,208,077			6,097,617			4,634,332
Net non-operating income (expenses)		312,221			28,345			(16,011	)		145,640
Share of profit (loss) of associates and joint ventures		(14,081	)		93,774			93,526			(43,750	)
Net other non-operating income (expenses)		326,302			(65,429	)		(109,537	)		189,390
Profit before income tax		5,413,149			5,236,422			6,081,606			4,779,972
Income tax expense		(1,377,483	)		(1,438,171	)		(1,697,225	)		(1,264,394	)
Profit for the period		4,035,666			3,798,251			4,384,381			3,515,578
Other comprehensive income (loss) for the period, net of tax		(3,956,391	)		629,454			222,758			472,270


	For the nine months ended September 30, 2022			For the nine months ended September 30, 2021			For the year ended December 31, 2021			For the year ended December 31, 2020
Items that will not be reclassified to profit or loss:		(960,355	)		1,213,616			871,654			817,524
Remeasurements of net defined benefit liabilities		(40,476	)		(4,454	)		(45,510	)		(13,434	)
Share of other comprehensive income (loss) of associates and joint ventures		(4	)		(5	)		51			(1	)
Gains (losses) on equity securities at fair value through other comprehensive income		(940,598	)		1,212,834			903,398			822,140
Fair value changes of financial liabilities designated at fair value through profit or loss due to own credit risk		20,723			5,241			13,715			8,819
Items that may be reclassified subsequently to profit or loss:		(2,996,036	)		(584,162	)		(648,896	)		(345,254	)
Currency translation differences		706,979			255,366			255,907			(187,283	)
Losses on debt securities at fair value through other comprehensive income		(2,901,146	)		(861,239	)		(924,698	)		(356,572	)
Share of other comprehensive income (expenses) of associates and joint ventures		(393	)		387			498			(6,846	)
Gains (losses) on cash flow hedging instruments		(14,740	)		12,887			20,864			(1,264	)
Gains (losses) on hedging instruments of net investments in foreign operations		(233,337	)		(53,152	)		(57,935	)		64,269
Other comprehensive losses arising from separate account		(219,471	)		(48,630	)		(63,814	)		(9,683	)
Gains (losses) on overlay adjustment		(333,928	)		110,219			120,282			152,125
Total comprehensive income for the period		79,275			4,427,705			4,607,139			3,987,848
Profit attributable to:		4,035,666			3,798,251			4,384,381			3,515,578
Shareholders of the parent company		4,027,935			3,772,415			4,409,543			3,468,448
Non-controlling interests		7,731			25,836			(25,162	)		47,130
Total comprehensive income for the period attributable to:		79,275			4,427,705			4,607,139			3,987,848
Shareholders of the parent company		37,580			4,381,574			4,610,549			3,966,361
Non-controlling interests		41,695			46,131			(3,410	)		21,487
Earnings per share
Basic earnings per share (Won)		10,118			9,550			11,134			8,843
Diluted earnings per share (Won)		9,886			9,346			10,890			8,730

3.2.

Separate Financial Information

3.2.1.

Separate Statements of Financial Position


							(Unit: in millions of Won)
	As of September 30, 2022			As of December 31, 2021			As of December 31, 2020
Cash and due from financial institutions		1,032,895			608,076			23,084
Financial assets at fair value through profit or loss		1,230,069			440,760			474,262
Loans measured at amortized cost		308,918			249,128			179,542
Investments in subsidiaries		26,741,438			26,741,438			26,519,880
Property and equipment		4,279			4,444			7,730
Intangible assets		17,119			16,673			13,267
Net defined benefit assets		—			221			—
Deferred income tax assets		18,577			5,583			3,189
Other assets		1,289,285			805,056			887,537

Total assets		30,642,580			28,871,379			28,108,491

Borrowings		—			—			100,000
Debentures		5,035,606			5,552,791			6,128,043
Net defined benefit liabilities		1,745			—			59
Current income tax liabilities		870,272			570,519			716,473
Other liabilities		227,350			235,095			178,296

Total liabilities		6,134,973			6,358,405			7,122,871

Share capital		2,090,558			2,090,558			2,090,558
Hybrid securities		4,433,981			2,837,981			1,695,778
Capital surplus		14,754,747			14,754,747			14,754,747
Accumulated other comprehensive loss		(8,685	)		(8,330	)		(8,032	)
Retained earnings		4,073,194			3,974,206			3,588,757
Treasury Shares		(836,188	)		(1,136,188	)		(1,136,188	)

Total equity		24,507,607			22,512,974			20,985,620

Total liabilities and equity		30,642,580			28,871,379			28,108,491

3.2.2.

Separate Statements of Comprehensive Income


	(Unit: in millions of Won, except per share amounts)
	For the nine months ended September 30, 2022			For the nine months ended September 30, 2021			For the year ended December 31, 2021			For the year ended December 31, 2020
Net interest expenses		(71,545	)		(85,202	)		(111,077	)		(124,393	)
Interest income		12,406			6,371			9,392			8,044
Interest income from financial instruments at amortized cost		10,414			4,192			6,548			3,788
Interest income from financial instruments at fair value through profit or loss		1,992			2,179			2,844			4,256
Interest expense		(83,951	)		(91,573	)		(120,469	)		(132,437	)
Net fee and commission expense		(5,098	)		(5,715	)		(8,157	)		(8,338	)
Fee and commission income		1,576			694			975			841
Fee and commission expense		(6,674	)		(6,409	)		(9,132	)		(9,179	)
Net gains (losses) on financial assets at fair value through profit or loss		(17,090	)		15,893			20,250			12,663
Net other operating income		1,871,224			1,617,949			1,620,238			1,571,239
General and administrative expenses		(63,074	)		(65,124	)		(85,417	)		(71,854	)
Operating profit before provision for credit losses		1,714,417			1,477,801			1,435,837			1,379,317
Provision for credit losses		(221	)		(3	)		(417	)		(465	)
Operating profit		1,714,206			1,477,798			1,435,420			1,378,852
Net non-operating income		553			1,306			1,165			514
Profit before income tax		1,714,759			1,479,104			1,436,585			1,379,366
Income tax income		12,860			2,352			2,281			49
Profit for the period		1,727,619			1,481,456			1,438,866			1,379,415
Other comprehensive loss for the period, net of tax		(355	)		(86	)		(298	)		(368	)
Items that will not be reclassified to profit or loss:		(355	)		(86	)		(298	)		(368	)
Remeasurements of net defined benefit liabilities		(355	)		(86	)		(298	)		(368	)
Total comprehensive income for the period		1,727,264			1,481,370			1,438,568			1,379,047
Earnings per share
Basic earnings per share (Won)		4,214			3,670			3,509			3,482
Diluted earnings per share (Won)		4,120			3,594			3,436			3,438

3.3.

Other Selected Financial Data

3.3.1.

Won-denominated Liquidity Ratio


				(Unit: in millions of Won, except percentages)
	As of September 30, 2022			As of December 31, 2021			As of December 31, 2020
Current assets in Won (A)		1,434,742			713,908			112,754
Current liabilities in Won (B)		209,729			317,184			92,328
Liquidity ratio (A/B)		684.09	%		225.08	%		122.12	%

Notes:

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

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

3.3.2.

Profitability Ratios


					(Unit: %)
	For the nine months ended September 30, 2022		For the year ended December 31, 2021		For the year ended December 31, 2020
Net income as a percentage of average total assets (ROA)		0.78		0.69		0.61
Net income as a percentage of average shareholders’ equity (ROE)		11.36		9.80		8.64

Note:

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

3.3.3.

20 Largest Exposures of Kookmin Bank by Borrower (As of September 30, 2022)


	(Unit: in billions of Won)
Company	Credit Extended
LG Display Co., Ltd.		1,905
Samsung Electronics Co., Ltd.		1,307
Hyundai Heavy Industries Co., Ltd.		1,233
KB Kookmin Card Co., Ltd.		1,218
Samsung Heavy Industries Co., Ltd.		1,205
Hyundai Steel Co., Ltd.		1,180
E-MART Inc.		1,164
GS Caltex Corporation		1,126
Hyundai Motor Company		1,018
Strada Holdco L.P.		949
PT BANK KB BUKOPIN TBK		933
SK Inc.		903
FEDERAL RESERVE BANK OF NEW YORK		848
POSCO International Corporation		844
S-Oil Corp.		834
AGRICULTURAL BANK		825
POSCO Holdings Inc.		790
SK On Co., Ltd.		760
Samsung SDI Co., Ltd.		746
Daewoo Shipbuilding & Marine Engineering Co., Ltd.		702

Total		20,490

3.3.4.

10 Largest Exposures of Kookmin Bank by Chaebol Group (As of September 30, 2022)


	(Unit: in billions of Won)
Group	Credit Extended
SK		5,513
Hyundai Motor		5,426
Samsung		4,860
LG		3,502
Hyundai Heavy Industries		3,197
Lotte		2,852
POSCO		2,086
Hanwha		2,023
GS		1,886
SHINSEGAE		1,498

Total		32,843

3.3.5.

Kookmin Bank’s Loan Concentration by Industry (As of September 30, 2022)


	(Unit: in billions of Won, except percentages)

Industry	Total Credit		Percentage of Total Credit
Manufacturing		57,262		28.7
Construction		4,154		2.1
Real estate activities		45,061		22.6
Wholesale and retail trade		31,079		15.6
Accommodation and food service activities		10,157		5.1
Financial activities		6,338		3.2
Others		45,292		22.7

Total		199,342		100.0

3.3.6.

Top 20 Non-Performing Loans of Kookmin Bank (As of September 30, 2022)


		(Unit: in billions of Won)
Borrower	Industry	Total Credit		Allowance for Loan Losses
Borrower A	Construction		40.1		39.3
Borrower B	Wholesale and retail trade		21.0		18.3
Borrower C	Human health and social work activities		18.7		1.9
Borrower D	Manufacturing		8.9		3.0
Borrower E	Manufacturing		8.8		3.1
Borrower F	Real estate activities		7.6		1.9
Borrower G	Manufacturing		7.0		2.9
Borrower H	Manufacturing		6.9		3.9
Borrower I	Manufacturing		6.4		5.8
Borrower J	Manufacturing		5.8		1.3
Borrower K	Manufacturing		4.9		2.2
Borrower L	Manufacturing		4.9		0.8
Borrower M	Manufacturing		4.8		3.8
Borrower N	Manufacturing		4.7		0.7
Borrower O	Manufacturing		4.7		3.4
Borrower P	Membership organizations, repair and other personal services		4.4		1.0
Borrower Q	Wholesale and retail trade		4.3		0.3
Borrower R	Wholesale and retail trade		3.9		2.1
Borrower S	Manufacturing		3.7		0.9
Borrower T	Manufacturing		3.7		3.5

Total	—		175.0		100.1

3.4.

Other Financial Information

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

4.	Independent Public Accountants

4.1.

Audit / Review Services

(Unit: in millions of Won)

Period

Auditor

Activity

Agreed Per Contract⁽¹⁾

Actual⁽²⁾

Compensation⁽³⁾

Estimated
Hours

Compensation⁽³⁾

Accrued
Hours

January 1 to September 30, 2022

KPMG Samjong
Accounting Corp.

Quarterly, semi-annual and annual review & audit, review of internal accounting management system (including audit of internal control over financial reporting)

1,291

11,364

1,093

5,948

January 1 to December 31, 2021

KPMG Samjong
Accounting Corp.

Quarterly, semi-annual and annual review & audit, review of internal accounting management system (including audit of internal control over financial reporting)

1,261

11,364

1,261

11,451

January 1 to December 31, 2020

KPMG Samjong
Accounting Corp.

Quarterly, semi-annual and annual review & audit, review of internal accounting management system (including audit of internal control over financial reporting)

1,246

11,570

1,246

12,624

January 1 to December 31, 2020

KPMG Samjong
Accounting Corp.

Expansion of the scope of audit in connection with the acquisition of Prudential Life Insurance

481

4,829

481

4,846

Notes:

(1) Total compensation and estimated hours are established at the time of the execution of the audit and review services contract.

(2)

Actual compensation and hours are accrued from January 1 of each applicable year to the date of the audit or review report issued during such year.

(3)

Excluding value-added taxes.

4.2.

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


				(Unit: in millions of Won)
Period	Auditor	Activity	Service Period	Compensation⁽¹⁾
January 1 to September 30, 2022	KPMG Samjong Accounting Corp.	PCAOB audit of consolidated financial statements and internal control over financial reporting	May 1, 2022 to April 30, 2023		697
January 1 to December 31, 2021	KPMG Samjong Accounting Corp.	PCAOB audit of consolidated financial statements and internal control over financial reporting	May 1, 2021 to April 30, 2022		681
January 1 to December 31, 2020	KPMG Samjong Accounting Corp.	PCAOB audit of consolidated financial statements and internal control over financial reporting	May 1, 2020 to April 30, 2021		662

Note:

(1) Total compensation (excluding value-added taxes) is established at the time of the execution of the audit and review services contract.

4.3.

Change in Auditor

Pursuant to the Act on External Audit of Stock Companies and the related regulations thereunder, the Securities and Futures Commission of the Financial Services Commission designated KPMG Samjong Accounting Corp. as the new external auditor for the Company for the fiscal years ending December 31, 2020, 2021 and 2022. As such, the external auditor for the Company and its subsidiaries for the fiscal year ended December 31, 2021 continued to be KPMG Samjong Accounting Corp. Prudential Life Insurance, which kept Samil PricewaterhouseCoopers as its external auditor for the fiscal year ended December 31, 2020, changed its external auditor for the fiscal year ended December 31, 2021 to KPMG Samjong Accounting Corp.

5.	Corporate Governance and Affiliated Companies

5.1.

Board of Directors & Committees under the Board

[No longer required to be disclosed in quarterly reports pursuant to revised Korean regulations]

5.2.

Audit Committee

[No longer required to be disclosed in quarterly reports pursuant to revised Korean regulations]

5.3.

Compensation to Directors

[No longer required to be disclosed in quarterly reports pursuant to revised Korean regulations]

5.4.

Top 5 Highest-Paid Individuals

[No longer required to be disclosed in quarterly reports pursuant to revised Korean regulations]

5.5.

Affiliated Companies

[No longer required to be disclosed in quarterly reports pursuant to revised Korean regulations]

6.	Directors, Senior Management and Employees

6.1.

Executive Directors

As of September 30, 2022, we had one executive director. The name, position and the end of the term of our executive director and the number of shares of our common stock he owned as of September 30, 2022 are set forth below.

Name

Date of Birth

Position

Common Shares Owned

End of Term

Jong Kyoo Yoon

October 1955

Chairman & Chief Executive Officer

21,000

November 20, 2023

6.2.

Non-standing Directors

As of September 30, 2022, we had one non-standing director. The name, position and the end of the term of our non-standing director and the number of shares of our common stock he owned as of September 30, 2022 are set forth below.

Name

Date of Birth

Position

Common Shares Owned

End of Term⁽¹⁾

Jae Keun Lee

May 1966

Non-standing Director

119

March 24, 2024

Note: (1)

The date designated as Mr. Jae Keun Lee’s end of term is the date of the annual general meeting of shareholders for fiscal year 2023, which is expected be held in March 2024.

6.3.

Non-executive Directors

As of September 30, 2022, we had seven non-executive directors. The name, position and the end of the term of our non-executive directors and the number of shares of our common stock they respectively owned as of September 30, 2022 were as follows.


Name	Date of Birth	Position	Common Shares Owned		End of Term
Suk Ho Sonu	September 1951	Non-executive Director		1,300	March 24, 2023
Myung Hee Choi	February 1952	Non-executive Director		—	March 24, 2023
Kouwhan Jeong	September 1953	Non-executive Director		—	March 24, 2023
Kyung Ho Kim	December 1954	Non-executive Director		—	March 24, 2023
Seon-joo Kwon	November 1956	Non-executive Director		—	March 24, 2023
Gyutaeg Oh	February 1959	Non-executive Director		—	March 24, 2023
Jaehong Choi	August 1962	Non-executive Director		—	March 24, 2024

As of September 30, 2022, the following non-executive director also served as a director at another company.


Name	Company	Position	Appointment Date
Kouwhan Jeong	Nambujeil Law and Notary Office Inc.	Co-president Attorney at Law	May 2016

6.4.

Senior Management

Members of our senior management as of September 30, 2022 are as follows.


Name	Date of Birth	Position	Common Shares Owned⁽¹⁾		End of Term
Yin Hur	December 1961	Vice Chairman and Head of Retail Customer / Wealth Management & Pension Business / Small & Medium Enterprise Business Units		13,506	December 31, 2022
Dong Cheol Lee	October 1961	Vice Chairman and Head of Global / Insurance Business Units		3,325	December 31, 2022
Jong Hee Yang	June 1961	Vice Chairman and Head of Digital / IT Business Units		914	December 31, 2022
Pil Kyu Im	March 1964	Senior Executive Vice President and Chief Risk Management Officer		1,005	December 31, 2022
Dong Whan Han	January 1965	Senior Executive Vice President and Head of KB Research		1,100	December 31, 2022
Se Min Kim	January 1971	Senior Managing Director and Chief Strategy Officer		122	December 31, 2023
Scott Y.H. Seo	March 1966	Senior Managing Director and Chief Finance Officer		—	December 31, 2022
Yeo Woon Yoon	April 1967	Senior Managing Director and Chief Human Resources Officer		567	December 31, 2022
Jin Gyu Maeng	January 1966	Senior Managing Director and Head of Audit		1,002	December 31, 2022
Hye Sook Moon	September 1971	Managing Director and Head of ESG Division		652	December 31, 2023
Bong Joong Kwon	November 1969	Managing Director and Head of IR		286	December 31, 2022
Byung Joo Oh	January 1973	Managing Director, Insurance Business Unit		817	December 31, 2022
Hye Ja Suh	September 1966	Managing Director and Chief Compliance Officer		1,305	December 31, 2022
Jeong Rim Park	November 1963	Head of the Capital Market Business Unit		3,150	December 31, 2022
Sung Hyun Kim	August 1963	Head of Corporate and Investment Banking Business Unit		15,468	December 31, 2022
Jin Young Kim	August 1969	Chief Public Relation Officer		765	December 31, 2022
Chai Hyun Sung	September 1965	Senior Executive Vice President, Retail Customer Business Unit		8,031	December 31, 2022
Jae Young Choi	June 1967	Senior Managing Director, Wealth Management and Pension Business Unit		916	December 31, 2022
Mun Cheol Jeong	August 1968	Senior Managing Director, Small and Medium Enterprise Business Unit		2,968	December 31, 2022
Nam Hoon Cho	June 1968	Senior Managing Director and Chief Global Strategy Officer		1,000	December 31, 2022
Young Suh Cho	February 1971	Chief Digital Platform Officer		1,000	December 31, 2022


Name	Date of Birth	Position	Common Shares Owned⁽¹⁾		End of Term
Jin Soo Yoon	February 1964	Chief Information Technology Officer		251	December 31, 2022
Sungpyo Jeon	August 1966	Chief Contact Center Officer		930	December 31, 2022
Jeong Ha	January 1967	Senior Executive Vice President, Capital Market Business Unit		—	December 31, 2022
Sang-Hyeon Woo	February 1964	Senior Executive Vice President, Corporate and Investment Banking Business Unit		348	December 31, 2022
Dong Sook Jeon	September 1968	Head of Pension Division		1,776	December 31, 2022
Nam Che Kang	August 1967	Head of Global Division		361	December 31, 2022
Chang Hwa Yook	December 1967	Head of Data Division		505	December 31, 2022
Chan Yong Park	September 1965	Head of Office of Planning and Coordination		947	December 31, 2022
Yoo Shim Hur	April 1973	Head of Digital Contents Center		—	December 31, 2022
Soon Young Oh	August 1977	Head of Financial AI Center		—	December 31, 2022
Joo Hyun Kim	November 1970	Head of Group Cloud Center		—	December 31, 2022

Note: (1)

The number of common shares owned is as of September 30, 2022 and includes those owned in the holder’s name under the employee stock ownership association’s account, and may differ from the number of shares owned as reported pursuant to Article 173 of the Financial Investment Services and Capital Markets Act.

As of September 30, 2022, the following management also served as senior management at our subsidiaries.


Name	Subsidiary	Position	Appointment Date
Jae Keun Lee	Kookmin Bank	Chief Executive Officer	January 2022
Jeong Rim Park	KB Securities	Chief Executive Officer	January 2019
Sung Hyun Kim	KB Securities	Chief Executive Officer	January 2019
Hye Sook Moon	Kookmin Bank	Head of ESG Division	January 2022
Jin Young Kim	Kookmin Bank	Managing Director; Brand Strategy Group	January 2022
Chai Hyun Sung	Kookmin Bank	Senior Executive Vice President; Retail Customer Group	January 2020
Jae Young Choi	Kookmin Bank	Senior Managing Director; Wealth Management Group	January 2022
	KB Securities	Senior Executive Vice President; Wealth Management Division	January 2022
	KB Insurance	Senior Managing Director; WM/Pension Division	January 2022
Mun Cheol Jeong	Kookmin Bank	Senior Managing Director; SME and SOHO Customer Group	January 2022
Nam Hoon Cho	Kookmin Bank	Senior Managing Director; Global Business Group	January 2022
Young Suh Cho	Kookmin Bank	Senior Managing Director; DT Strategy Division	January 2021
Jin Soo Yoon	Kookmin Bank	Senior Executive Vice President; Tech Group	January 2021
Sungpyo Jeon	Kookmin Bank	Senior Managing Director; Smart Customer Group	January 2022


Jeong Ha	Kookmin Bank	Senior Executive Vice President; Capital Markets Group	January 2021
Sang-Hyeon Woo	Kookmin Bank	Senior Executive Vice President; Corporate Investment Banking Customer Group	January 2021
Sang-Hyeon Woo	KB Securities	Senior Executive Vice President; Investment Banking Division	January 2020
Dong Sook Jeon	Kookmin Bank	Head of Pension Business Division	January 2022
Nam Che Kang	Kookmin Bank	Head of Global Growth Supporting Division	January 2022
Chang Hwa Yook	Kookmin Bank	Head of Data Division	January 2022
Chan Yong Park	Kookmin Bank	Senior Managing Director; Planning & Coordination Department	January 2022
Yoo Shim Hur	Kookmin Bank	Managing Director; Digital Contents Center	January 2022
Soon Young Oh	Kookmin Bank	Managing Director; Financial AI Center	June 2022
Joo Hyun Kim	Kookmin Bank	Head of Cloud Platform Department	February 2022
Se Min Kim	KB Securities	Non-standing Director	June 2022
	Prudential Life Insurance	Non-standing Director	August 2022
Scott Y.H. Seo	KB Insurance	Non-standing Director	February 2022
Scott Y.H. Seo	KB Kookmin Card	Non-standing Director	March 2022

6.5.

Employees

[No longer required to be disclosed in quarterly reports pursuant to revised Korean regulations]

7.	Major Shareholders and Related Party Transactions

7.1.

Major Shareholders

[No longer required to be disclosed in quarterly reports pursuant to revised Korean regulations]

7.2.

Changes in the Largest Shareholder


						(Unit: shares, %)

Name of Largest Shareholder	Date of Change in Largest Shareholder/ Date of Change in Number of Shares Owned		Number of Shares of Common Stock⁽¹⁾			Percentage of Total Issued Shares⁽⁵⁾
Korean National Pension Service		December 31, 2018		39,704,733			9.50
Korean National Pension Service		December 31, 2019		41,468,003			9.97
Korean National Pension Service		February 1, 2020		41,462,588	⁽²⁾		9.97
Korean National Pension Service		October 12, 2020		41,402,150			9.96
Korean National Pension Service		December 31, 2020		41,287,280			9.93
Korean National Pension Service		June 30, 2021		40,626,942			9.77


Korean National Pension Service	December 31, 2021	37,626,516		9.05
Korean National Pension Service	January 27, 2022	37,188,199	⁽³⁾	8.94
Korean National Pension Service	March 31, 2022	36,008,504		8.73
Korean National Pension Service	June 30, 2022	33,830,623		8.20
Korean National Pension Service	September 30, 2022	32,594,691		7.97
Korean National Pension Service	October 12, 2022	32,457,827	⁽⁴⁾	7.94

Notes:

(1) Based on our shareholder registry as of the end of each applicable year unless specified otherwise.

(2)

Based on disclosure made by the Korean National Pension Service in a statement of acquisition filing on February 7, 2020.

(3)

Based on disclosure made by the Korean National Pension Service in a statement of disposal filing on February 4, 2022.

(4)

Based on disclosure made by the Korean National Pension Service in a statement of disposal filing on November 2, 2022.

(5)

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

Prior to December 12, 2019: 418,111,537

From December 12, 2019 to February 14, 2022: 415,807,920

From February 14, 2022 to August 1, 2022: 412,352,494

After August 1, 2022: 408,897,068

7.3.

Employee Stock Ownership Association

[No longer required to be disclosed in quarterly reports pursuant to revised Korean regulations]

7.4.

Investments in Affiliated Companies

[No longer required to be disclosed in quarterly reports pursuant to revised Korean regulations]

7.5.

Related Party Transactions

7.5.1.

Purchase of capital securities issued by KB Securities Co., Ltd.

(Unit: in billions of Won)

Issuer

Relationship

Type

Issue Amount

Issue Date

Interest Rate

Maturity Date

Use of Proceeds

KB Securities Co., Ltd.

Subsidiary

No. 1 Private Placement of Capital Securities in Won

200

March 31, 2022

4.300

March 31, 2052
(may be extended)

Working capital

(Unit: in billions of Won)

Issuer

Relationship

Type

Issue Amount

Issue Date

Interest Rate

Maturity Date

Use of Proceeds

KB Securities Co., Ltd.

Subsidiary

No. 3 Private Placement of Capital Securities in Won

230

September 30, 2022

5.500

September 30, 2052 (may be extended)

Working capital

7.5.2.

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

(Unit: in billions of Won)

Issuer

Relationship

Type

Issue Amount

Issue Date

Interest Rate

Maturity Date

Use of Proceeds

KB Capital Co., Ltd.

Subsidiary

No. 299 Private Placement of Capital Securities in Won

March 27, 2015

6.548

%⁽¹⁾

March 27, 2045 (may be extended)

Working capital

Note:

(1) The interest rate has increased from its initial rate due to the non-exercise of the call option.

(Unit: in billions of Won)

Issuer

Relationship

Type

Issue Amount

Issue Date

Interest Rate

Maturity Date

Use of Proceeds

KB Capital Co., Ltd.

Subsidiary

No. 320 Private Placement of Capital Securities in Won

September 24, 2015

5.989

%⁽¹⁾

September 24, 2045

(may be extended)

Working capital

Note:

(1) The interest rate has increased from its initial rate due to the non-exercise of the call option.

(Unit: in billions of Won)

Issuer

Relationship

Type

Issue Amount

Issue Date

Interest Rate

Maturity Date

Use of Proceeds

KB Capital Co., Ltd.

Subsidiary

No. 343 Private Placement of Capital Securities in Won

March 29, 2016

6.305

%⁽¹⁾

March 29, 2046 (may be extended)

Working capital

Note:

(1) The interest rate has increased from its initial rate due to the non-exercise of the call option.

(Unit: in billions of Won)

Issuer

Relationship

Type

Issue Amount

Issue Date

Interest Rate

Maturity Date

Use of Proceeds

KB Capital Co., Ltd.

Subsidiary

No. 352 Private Placement of Capital Securities in Won

June 28, 2016

6.466

%⁽¹⁾

June 28, 2046

(may be extended)

Working capital

Note:

(1) The interest rate has increased from its initial rate due to the non-exercise of the call option.

(Unit: in billions of Won)

Issuer

Relationship

Type

Issue Amount

Issue Date

Interest Rate

Maturity Date

Use of Proceeds

KB Capital Co., Ltd.

Subsidiary

No. 367 Private Placement of Capital Securities in Won

November 28, 2016

6.952

%⁽¹⁾

November 28, 2046 (may be extended)

Working capital

Note:

(1) The interest rate has increased from its initial rate due to the non-exercise of the call option.

(Unit: in billions of Won)

Issuer

Relationship

Type

Issue Amount

Issue Date

Interest Rate

Maturity Date

Use of Proceeds

KB Capital Co., Ltd.

Subsidiary

No. 378 Private Placement of Capital Securities in Won

April 27, 2017

7.664

%⁽¹⁾

April 27, 2047
(may be extended)

Working capital

Note:

(1) The interest rate has increased from its initial rate due to the non-exercise of the call option

(Unit: in billions of Won)

Issuer

Relationship

Type

Issue Amount

Issue Date

Interest Rate

Maturity Date

Use of Proceeds

KB Capital Co., Ltd.

Subsidiary

No. 460 Private Placement of Capital Securities in Won

100

September 25, 2020

3.376

September 25, 2050 (may be extended)

Working capital

(Unit: in billions of Won)

Issuer

Relationship

Type

Issue Amount

Issue Date

Interest Rate

Maturity Date

Use of Proceeds

KB Capital Co., Ltd.

Subsidiary

No. 486 Private Placement of Capital Securities in Won

100

February 17, 2022

4.495

February 17, 2052 (may be extended)

Working capital

7.5.3.

Purchase of subordinated bonds issued by KB Savings Bank Co., Ltd.

(Unit: in billions of Won)

Issuer

Relationship

Type

Issue Amount

Issue Date

Interest Rate

Maturity Date

Use of Proceeds

KB Savings Bank Co., Ltd.

Subsidiary

No. 1 Subordinated Bonds
in Won

June 25, 2021

1.600

June 25, 2031

Working capital

7.5.4. Prepayments and Loans to Subsidiaries

(Unit: in billions of Won)

Name

Relationship

Account

Loan Amount

Current
Balance

Credit Offering
Date

Interest Rate

Maturity Date

KB Investment Co., Ltd.

Subsidiary

Loans⁽¹⁾

July 14, 2017

2.571%⁽²⁾

July 12, 2023

Notes:

(1) Unsecured credit loans.

(2)

Changed from 2.239% to 2.571% upon extension of the loans on July 12, 2022.

(Unit: in billions of Won)

Name

Relationship

Account

Loan Amount

Current
Balance

Credit Offering
Date

Interest Rate

Maturity Date

KB Investment Co., Ltd.

Subsidiary

Loans⁽¹⁾

July 13, 2018

2.571%⁽²⁾

July 12, 2023

Notes:

(1) Unsecured credit loans.

(2)

Changed from 2.239% to 2.571% upon extension of the loans on July 12, 2022.

(Unit: in billions of Won)

Name

Relationship

Account

Loan Amount

Current
Balance

Credit Offering
Date

Interest Rate

Maturity Date

KB Investment Co., Ltd.

Subsidiary

Loans⁽¹⁾

March 8, 2019

2.334%⁽²⁾

March 8, 2023

Notes:

(1) Unsecured credit loans.

(2)

Changed from 2.245% to 2.334% upon extension of the loans on March 9, 2022.

(Unit: in billions of Won)

Name

Relationship

Account

Loan Amount

Current
Balance

Credit Offering
Date

Interest Rate

Maturity Date

KB Investment Co., Ltd.

Subsidiary

Loans⁽¹⁾

March 9, 2020

2.334%⁽²⁾

March 8, 2023

Notes:

(1) Unsecured credit loans.

(2)

Changed from 2.245% to 2.334% upon extension of the loans on March 9, 2022.

(Unit: in billions of Won)

Name

Relationship

Account

Loan Amount

Current
Balance

Credit Offering
Date

Interest Rate

Maturity Date

KB Investment Co., Ltd.

Subsidiary

Loans⁽¹⁾

July 13, 2020

2.571%⁽²⁾

July 12, 2023

Notes:

(1) Unsecured credit loans.

(2)

Changed from 2.239% to 2.571% upon extension of the loans on July 12, 2022.

(Unit: in billions of Won)

Name

Relationship

Account

Loan Amount

Current
Balance

Credit Offering
Date

Interest Rate

Maturity Date

KB Investment Co., Ltd.

Subsidiary

Loans⁽¹⁾

December 20, 2021

2.247%

December 19, 2022

Note:

(1) Unsecured credit loans.

(Unit: in billions of Won)

Name

Relationship

Account

Loan Amount

Current
Balance

Credit Offering
Date

Interest Rate

Maturity Date

KB Investment Co., Ltd.

Subsidiary

Loans⁽¹⁾

July 13, 2022

2.571%

July 12, 2023

Note:

(1) Unsecured credit loans.

(Unit: in billions of Won)

Name

Relationship

Account

Loan Amount

Current
Balance

Credit Offering
Date

Interest Rate

Maturity Date

KB Credit Information Co., Ltd.

Subsidiary

Loans⁽¹⁾

October 7, 2022

2.401%

October 6, 2023

Note:

(1) Unsecured credit loans.

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: November 14, 2022	By:	/s/ Scott Y. H. Seo
	(Signature)
	Name: Scott Y. H. Seo
	Title:	Senior Managing Director and Chief Finance Officer

EX-99.1

Exhibit 99.1

KB Financial Group Inc. and Subsidiaries

Consolidated Interim Financial Statements

September 30, 2022 and 2021

(Unaudited)

(With Independent Auditors’ Review Report Thereon)

Contents


	Page
Independent Auditors’ Review Report		1

Consolidated Interim Statements of Financial Position		3

Consolidated Interim Statements of Comprehensive Income		4

Consolidated Interim Statements of Changes in Equity		5

Consolidated Interim Statements of Cash Flows		6

Notes to the Consolidated Interim Financial Statements		7

Independent Auditors’ Review Report

Based on a report originally issued in Korean

The Board of Directors and Stockholders

KB Financial Group Inc.:

Reviewed financial statements

We have reviewed the accompanying condensed consolidated interim financial statements of KB Financial Group Inc. and its subsidiaries (collectively the “Group”), which comprise the consolidated interim statement of financial position as of September 30, 2022, the consolidated interim statements of comprehensive income for the-three month and nine-month periods ended September 30, 2022 and 2021, the consolidated interim statements of changes in equity and cash flows for the nine-month periods ended September 30, 2022 and 2021 and notes, comprising a summary of significant accounting policies and other explanatory information.

Management’s responsibility

Management is responsible for the preparation and fair presentation of these condensed consolidated interim financial statements in accordance with Korean International Financial Reporting Standards (“K-IFRS”) No.1034 Interim Financial Reporting, and for such internal control as management determines is necessary to enable the preparation of the condensed consolidated interim financial statements that are free from material misstatement, whether due to fraud or error.

Auditors’ review responsibility

Our responsibility is to issue a report on these condensed consolidated interim financial statements based on our reviews.

We conducted our reviews in accordance with the Review Standards for Quarterly and Semiannual Financial Statements 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 reviews, nothing has come to our attention that causes us to believe that the accompanying condensed consolidated interim financial statements referred to above are not prepared, in all material respects, in accordance with K-IFRS No.1034 Interim Financial Reporting.

Emphasis of matter

The following matter may be helpful to the readers in their understanding of the condensed consolidated interim financial statements. Our review conclusion is not affected by this matter.

As described in note 32.3.g) to the condensed consolidated interim financial statements, the proliferation of COVID-19 has had a negative influence on the global economy, which may have an impact on expected credit losses and potential impairment of assets in a particular portfolio, and it could negatively affect the revenue generation capability of the Group.

Other matters

The procedures and practices utilized in the Republic of Korea to review such condensed consolidated interim financial statements may differ from those generally accepted and applied in other countries.

The consolidated statement of financial position of the Group as of December 31, 2021, and the related consolidated statements of comprehensive income, changes in equity and cash flows for the year then ended, which are not accompanying this report, were audited by us in accordance with Korean Standards on Auditing and our report thereon, dated March 17, 2022, expressed an unqualified opinion. The accompanying consolidated statement of financial position of the Group as of December 31, 2021 presented for comparative purposes, is consistent, in all material respects, with the audited consolidated financial statements from which it has been derived.

</s/>KPMG Samjong Accounting Corp.

Seoul, Korea

November 14, 2022

This report is effective as of November 14, 2022, 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 consolidated interim financial statements and notes thereto. Accordingly, the readers of the review report should understand that the above review report has not been updated to reflect the impact of such subsequent events or circumstances, if any.

KB Financial Group Inc. and Subsidiaries

Consolidated Interim Statements of Financial Position

September 30, 2022 and December 31, 2021

(in millions of Korean won)


	Notes		September 30, 2022 (Unaudited)			December 31, 2021
Assets
Cash and due from financial institutions		4,6,7,31	W	27,496,770		W	31,009,374
Financial assets at fair value through profit or loss		4,6,11		61,885,282			66,005,815
Derivative financial assets		4,6,8		17,820,011			3,721,370
Loans measured at amortized cost		4,6,9,10		456,863,042			417,900,273
Financial investments		4,6,11		112,086,173			104,847,871
Investments in associates and joint ventures		12		698,542			448,718
Property and equipment				5,000,282			5,239,898
Investment property				2,691,122			2,514,944
Intangible assets				3,306,310			3,266,357
Net defined benefit assets		19		78,881			100,083
Current income tax assets				241,681			98,798
Deferred income tax assets		13,26		693,985			159,093
Assets held for sale				250,765			237,318
Assets of a disposal group held for sale				—			171,749
Other assets		4,6		37,829,136			28,174,173

Total assets			W	726,941,982		W	663,895,834

Liabilities
Financial liabilities at fair value through profit or loss		4,6,14	W	12,262,059		W	12,088,980
Derivative financial liabilities		4,6,8		19,058,733			3,682,258
Deposits		4,6,15		390,346,134			372,023,918
Borrowings		4,6,16		69,808,758			56,912,374
Debentures		4,6,17		72,363,288			67,430,188
Provisions		18		885,566			808,604
Net defined benefit liabilities		19		414,796			225,521
Current income tax liabilities				980,260			662,672
Deferred income tax liabilities		13,26		18,195			1,470,981
Insurance liabilities		30		58,996,628			57,165,936
Other liabilities		4,6		52,500,219			43,130,482

Total liabilities				677,634,636			615,601,914

Equity
Share capital				2,090,558			2,090,558
Hybrid securities				4,434,251			2,838,221
Capital surplus				16,940,731			16,940,231
Accumulated other comprehensive income		28		(3,177,610	)		1,047,274
Accumulated other comprehensive income relating to assets of a disposal group held for sale		28		—			7,671
Retained earnings				28,314,318			25,672,815
Treasury shares				(836,188	)		(1,136,188	)

Equity attributable to shareholders of the Parent Company		20		47,766,060			47,460,582
Non-controlling interests				1,541,286			833,338

Total equity				49,307,346			48,293,920

Total liabilities and equity			W	726,941,982		W	663,895,834

The above consolidated interim statements of financial position should be read in conjunction with the accompanying notes.

KB Financial Group Inc. and Subsidiaries

Consolidated Interim Statements of Comprehensive Income

Three-Month and Nine-Month Periods Ended September 30, 2022 and 2021

(in millions of Korean won, except per share amounts)


	Notes	2022 (Unaudited)						2021 (Unaudited)
		Three months			Nine months			Three months			Nine months
Interest income		W	5,372,220		W	14,377,071		W	3,824,035		W	11,136,688
Interest income from financial instruments at fair value through other comprehensive income and amortized cost			5,160,478			13,793,495			3,677,568			10,698,240
Interest income from financial instruments at fair value through profit or loss			211,742			583,576			146,467			438,448
Interest expense			(2,006,539	)		(4,715,571	)		(969,754	)		(2,881,334	)

Net interest income	5,21		3,365,681			9,661,500			2,854,281			8,255,354

Fee and commission income			1,268,134			3,916,286			1,337,299			3,991,086
Fee and commission expense			(454,269	)		(1,312,543	)		(425,972	)		(1,247,160	)

Net fee and commission income	5,22		813,865			2,603,743			911,327			2,743,926

Insurance income			4,639,977			13,142,790			3,974,220			12,234,157
Insurance expense			(4,587,206	)		(12,735,030	)		(3,847,294	)		(11,771,315	)

Net insurance income	5,30		52,771			407,760			126,926			462,842

Net gains (losses) on financial instruments at fair value through profit or loss before applying overlay approach			(471,432	)		(986,843	)		207,849			854,789
Losses on overlay adjustments			91,271			460,689			(22,769	)		(151,948	)

Net gains (losses) on financial instruments at fair value through profit or loss	5,23		(380,161	)		(526,154	)		185,080			702,841

Net other operating expenses	5,24		(205,213	)		(1,090,658	)		(425,881	)		(1,302,887	)

General and administrative expenses	5,19,25		(1,734,235	)		(5,180,139	)		(1,664,472	)		(5,057,497	)

Operating income before provision for credit losses	5		1,912,708			5,876,052			1,987,261			5,804,579

Provision for credit losses	5,7,9,10,18		(313,783	)		(775,124	)		(199,342	)		(596,502	)

Net operating income	5		1,598,925			5,100,928			1,787,919			5,208,077

Share of profit (loss) of investments in associates and joint ventures	5		5,778			(14,081	)		10,639			93,774
Net other non-operating income (expenses)	5		107,014			326,302			(15,068	)		(65,429	)

Net non-operating income (expenses)			112,792			312,221			(4,429	)		28,345

Profit before income tax expense	5		1,711,717			5,413,149			1,783,490			5,236,422
Income tax expense	5,26		(448,156	)		(1,377,483	)		(477,520	)		(1,438,171	)

Profit for the period	5		1,263,561			4,035,666			1,305,970			3,798,251

Items that will not be reclassified to profit or loss:
Remeasurements of net defined benefit liabilities		W	(8,764	)	W	(40,476	)	W	(2,324	)	W	(4,454	)
Share of other comprehensive loss of associates and joint ventures			(2	)		(4	)		(2	)		(5	)
Gains (losses) on equity securities at fair value through other comprehensive income			(223,681	)		(940,598	)		905,008			1,212,834
Fair value changes of financial liabilities designated at fair value through profit or loss due to own credit risk			13,489			20,723			1,476			5,241

			(218,958	)		(960,355	)		904,158			1,213,616

Items that may be reclassified subsequently to profit or loss:
Currency translation differences			441,164			706,979			161,618			255,366
Losses on debt securities at fair value through other comprehensive income			(762,325	)		(2,901,146	)		(103,275	)		(861,239	)
Share of other comprehensive income (loss) of associates and joint ventures			(416	)		(393	)		107			387
Gains (losses) on cash flow hedging instruments	8		(40,403	)		(14,740	)		(4,785	)		12,887
Gains (losses) on hedging instruments of net investments in foreign operations	8		(137,354	)		(233,337	)		(31,018	)		(53,152	)
Other comprehensive loss arising from separate account			(64,796	)		(219,471	)		(17,092	)		(48,630	)
Gains (losses) on overlay adjustment	30		(66,167	)		(333,928	)		16,582			110,219

			(630,297	)		(2,996,036	)		22,137			(584,162	)

Other comprehensive income (loss) for the period, net of tax			(849,255	)		(3,956,391	)		926,295			629,454

Total comprehensive income (loss) for the period		W	414,306		W	79,275		W	2,232,265		W	4,427,705

Profit attributable to:	5
Shareholders of the Parent Company		W	1,271,326		W	4,027,935		W	1,298,426		W	3,772,415
Non-controlling interests			(7,765	)		7,731			7,544			25,836

		W	1,263,561		W	4,035,666		W	1,305,970		W	3,798,251

Total comprehensive income (loss) for the period attributable to:
Shareholders of the Parent Company		W	403,697		W	37,580		W	2,213,132		W	4,381,574
Non-controlling interests			10,609			41,695			19,133			46,131

		W	414,306		W	79,275		W	2,232,265		W	4,427,705

Earnings per share (in Korean won)	29
Basic earnings per share		W	3,174		W	10,118		W	3,281		W	9,550
Diluted earnings per share			3,104			9,886			3,212			9,346

The above consolidated interim statements of comprehensive income should be read in conjunction with the accompanying notes.

KB Financial Group Inc. and Subsidiaries

Consolidated Interim Statements of Changes in Equity

Nine-Month Periods Ended September 30, 2022 and 2021

(in millions of Korean won)


	Equity attributable to shareholders of the Parent Company
	Share capital		Hybrid securities		Capital surplus			Accumulated other comprehensive income			Accumulated other comprehensive income relating to assets of a disposal group held for sale			Retained earnings			Treasury shares			Non-controlling interests			Total equity
Balance as of January 1, 2021	W	2,090,558	W	1,695,988	W	16,723,589		W	630,011		W	—		W	22,540,616		W	(1,136,188	)	W	857,783		W	43,402,357

Comprehensive income for the period
Profit for the period		—		—		—			—			—			3,772,415			—			25,836			3,798,251
Remeasurements of net defined benefit liabilities		—		—		—			(4,783	)		—			—			—			329			(4,454	)
Currency translation differences		—		—		—			236,583			—			—			—			18,783			255,366
Gains (losses) on financial instruments at fair value through other comprehensive income and transfer to retained earnings		—		—		—			566,849			—			(216,437	)		—			1,183			351,595
Share of other comprehensive income of associates and joint ventures		—		—		—			382			—			—			—			—			382
Gains on cash flow hedging instruments		—		—		—			12,887			—			—			—			—			12,887
Losses on hedging instruments of net investments in foreign operations		—		—		—			(53,152	)		—			—			—			—			(53,152	)
Other comprehensive loss arising from separate account		—		—		—			(48,630	)		—			—			—			—			(48,630	)
Fair value changes of financial liabilities designated at fair value through profit or loss due to own credit risk		—		—		—			5,241			—			—			—			—			5,241
Gains on overlay adjustments		—		—		—			110,219			—			—			—			—			110,219

Total comprehensive income for the period		—		—		—			825,596			—			3,555,978			—			46,131			4,427,705

Transactions with shareholders
Annual dividends paid to shareholders of the Parent Company		—		—		—			—			—			(689,653	)		—			—			(689,653	)
Quarterly dividends paid to shareholders of the Parent Company		—		—		—			—			—			(292,226	)		—			—			(292,226	)
Issuance of hybrid securities		—		873,931		—			—			—			—			—			—			873,931
Dividends on hybrid securities		—		—		—			—			—			(51,440	)		—			(24,145	)		(75,585	)
Non-controlling interests changes in business combination		—		—		—			—			—			—			—			1,994			1,994
Transactions with non-controlling interests		—		—		217,975			(5,954	)		—			—			—			(212,021	)		—
Others		—		—		(29	)		—			—			—			—			25,120			25,091

Total transactions with shareholders		—		873,931		217,946			(5,954	)		—			(1,033,319	)		—			(209,052	)		(156,448	)

Balance as of September 30, 2021 (Unaudited)	W	2,090,558	W	2,569,919	W	16,941,535		W	1,449,653		W	—		W	25,063,275		W	(1,136,188	)	W	694,862		W	47,673,614

Balance as of January 1, 2022	W	2,090,558	W	2,838,221	W	16,940,231		W	1,047,274		W	7,671		W	25,672,815		W	(1,136,188	)	W	833,338		W	48,293,920

Comprehensive income for the period
Profit for the period		—		—		—			—			—			4,027,935			—			7,731			4,035,666
Remeasurements of net defined benefit liabilities		—		—		—			(41,208	)		—			—			—			732			(40,476	)
Currency translation differences		—		—		—			679,944			(7,671	)		—			—			34,706			706,979
Gains (losses) on financial instruments at fair value through other comprehensive income and transfer to retained earnings		—		—		—			(4,082,470	)		—			242,200			—			(1,474	)		(3,841,744	)
Share of other comprehensive loss of associates and joint ventures		—		—		—			(397	)		—			—			—			—			(397	)
Losses on cash flow hedging instruments		—		—		—			(14,740	)		—			—			—			—			(14,740	)
Losses on hedging instruments of net investments in foreign operations		—		—		—			(233,337	)		—			—			—			—			(233,337	)
Other comprehensive loss arising from separate account		—		—		—			(219,471	)		—			—			—			—			(219,471	)
Fair value changes of financial liabilities designated at fair value through profit or loss due to own credit risk		—		—		—			20,723			—			—			—			—			20,723
Losses on overlay adjustments		—		—		—			(333,928	)		—			—			—			—			(333,928	)

Total comprehensive income for the period		—		—		—			(4,224,884	)		(7,671	)		4,270,135			—			41,695			79,275

Transactions with shareholders
Annual dividends paid to shareholders of the Parent Company		—		—		—			—			—			(853,299	)		—			—			(853,299	)
Quarterly dividends paid to shareholders of the Parent Company		—		—		—			—			—			(389,634	)		—			—			(389,634	)
Issuance of hybrid securities		—		1,596,030		—			—			—			—			—			434,090			2,030,120
Dividends on hybrid securities		—		—		—			—			—			(85,699	)		—			(30,731	)		(116,430	)
Retirement of treasury shares		—		—		—			—			—			(300,000	)		300,000			—			—
Others		—		—		500			—			—			—			—			262,894			263,394

Total transactions with shareholders		—		1,596,030		500			—			—			(1,628,632	)		300,000			666,253			934,151

Balance as of September 30, 2022 (Unauidted)	W	2,090,558	W	4,434,251	W	16,940,731		W	(3,177,610	)	W	—		W	28,314,318		W	(836,188	)	W	1,541,286		W	49,307,346

The above consolidated interim statements of changes in equity should be read in conjunction with the accompanying notes.

KB Financial Group Inc. and Subsidiaries

Consolidated Interim Statements of Cash Flows

Nine-Month Periods Ended September 30, 2022 and 2021

(in millions of Korean won)


	Notes		2022 (Unaudited)			2021 (Unaudited)
Cash flows from operating activities
Profit for the period			W	4,035,666		W	3,798,251

Adjustments for non-cash items
Net losses (gains) on financial assets at fair value through profit or loss				361,969			(166,562	)
Net losses on derivative financial instruments for hedging purposes				303,203			247,829
Provision for credit losses				775,124			596,502
Net losses (gains) on financial investments				118,356			(44,903	)
Share of loss (profit) of associates and joint ventures				14,081			(93,774	)
Depreciation and amortization expense				642,086			621,071
Amortization expense of VOBA				104,480			119,013
Other net gains on property and equipment/intangible assets				(255,819	)		(1,221	)
Share-based payments				26,024			83,373
Provision for policy reserves				1,762,563			2,324,045
Post-employment benefits				186,063			178,822
Net interest income				31,242			212,695
Gains on foreign currency translation				(722,024	)		(185,517	)
Other expenses				627,432			497,951

				3,974,780			4,389,324

Changes in operating assets and liabilities
Financial asset at fair value through profit or loss				3,505,102			(1,343,144	)
Derivative financial instruments				501,222			37,463
Loans measured at fair value through other comprehensive income				(134,749	)		(31,805	)
Loans measured at amortized cost				(36,830,025	)		(25,507,053	)
Current income tax assets				(142,883	)		13,486
Deferred income tax assets				(531,268	)		(43,493	)
Other assets				(5,556,387	)		(9,367,881	)
Financial liabilities at fair value through profit or loss				1,690,963			1,404,089
Deposits				15,486,509			17,660,964
Current income tax liabilities				317,588			(213,058	)
Deferred income tax liabilities				222,147			193,043
Other liabilities				9,620,182			6,169,861

				(11,851,599	)		(11,027,528	)

Net cash outflow from operating activities				(3,841,153	)		(2,839,953	)

Cash flows from investing activities
Net cash flows from derivative financial instruments for hedging purposes				(121,156	)		38,677
Disposal of financial asset at fair value through profit or loss				7,541,842			9,361,336
Acquisition of financial asset at fair value through profit or loss				(7,845,336	)		(8,675,077	)
Disposal of financial investments				17,548,882			39,745,182
Acquisition of financial investments				(29,626,644	)		(44,648,456	)
Disposal of investments in associates and joint ventures				137,789			480,452
Acquisition of investments in associates and joint ventures				(401,694	)		(250,670	)
Disposal of property and equipment				27,811			12,882
Acquisition of property and equipment				(149,295	)		(167,225	)
Disposal of investment property				1,282,722			—
Acquisition of investment property				—			(118,961	)
Disposal of intangible assets				5,848			7,072
Acquisition of intangible assets				(169,174	)		(113,873	)
Net cash flows from changes in ownership of subsidiaries				745,403			142,875
Others				36,317			25,414

Net cash outflow from investing activities				(10,986,685	)		(4,160,372	)

Cash flows from financing activities
Net cash flows from derivative financial instruments for hedging purposes				24,195			(19,470	)
Net increase in borrowings				12,135,529			2,810,848
Increase in debentures				48,002,417			39,842,359
Decrease in debentures				(44,846,044	)		(35,734,774	)
Increase (decrease) in other payables to trust accounts				(1,103,799	)		349,922
Dividends paid				(1,242,933	)		(981,879	)
Issuance of hybrid securities				1,596,030			873,931
Dividends paid on hybrid securities				(85,699	)		(75,585	)
Redemption of principal elements of lease payments				(192,122	)		(63,789	)
Increase in non-controlling interests				403,359			—
Others				512,675			(170,867	)

Net cash inflow from financing activities				15,203,608			6,830,696

Effect of exchange rate changes on cash and cash equivalents				337,643			149,969

Net increase (decrease) in cash and cash equivalents				713,413			(19,660	)
Cash and cash equivalents at the beginning of the period		31		9,108,460			8,685,092

Cash and cash equivalents at the end of the period		31	W	9,821,873		W	8,665,432

The above consolidated interim statements of cash flows should be read in conjunction with the accompanying notes.

KB Financial Group Inc. and Subsidiaries

Notes to the Consolidated Interim Financial Statements

September 30, 2022 and 2021 (Unaudited), and December 31, 2021

1. The Parent Company

KB Financial Group Inc. (the “Parent Company”) was incorporated on September 29, 2008, under the Financial Holding Companies Act of Korea. KB Financial Group Inc. and its subsidiaries (the “Group”) derive substantially all of their revenue and income from providing a broad range of banking and related financial services to consumers and corporations. The Parent 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 Parent Company’s headquarter is located at 26, Gukjegeumyung-ro 8-gil, Yeongdeungpo-gu, Seoul. 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 Group 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 Group acquired Woori Financial Co., Ltd. and changed the name to KB Capital Co., Ltd. Meanwhile, the Group 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 Group 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.

The Parent Company’s share capital as of September 30, 2022, is W 2,090,558 million. The Parent 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 in its Articles of Incorporation is 1,000 million.

2. Basis of Preparation

2.1 Application of Korean IFRS

The Group maintains its accounting records in Korean won and prepares statutory consolidated financial statements in the Korean language in accordance with International Financial Reporting Standards as adopted by the Republic of Korea (“Korean IFRS”). The accompanying consolidated financial statements have been translated into English from the Korean language consolidated financial statements.

The consolidated financial statements of the Group 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 the consolidated financial statements requires the use of certain critical accounting estimates. Management also needs to exercise judgment in applying the Group’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 Group’s consolidated interim financial statements for the nine-month period ended September 30, 2022, have been prepared in accordance with Korean IFRS No.1034 Interim Financial Reporting and contain less information than is required in annual consolidated 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 Group since the end of the previous annual reporting period. These consolidated interim financial statements have been prepared in accordance with Korean IFRS which is effective or early adopted as of September 30, 2022.

KB Financial Group Inc. and Subsidiaries

Notes to the Consolidated Interim Financial Statements

September 30, 2022 and 2021 (Unaudited), and December 31, 2021

2.1.1 The Group has applied the following amended standards for the first time for its annual reporting period commencing January 1, 2022.

•

Amendments to Korean IFRS No.1116 Leases – COVID-19-Related Rent Concessions, etc. beyond June 30, 2021

The application of the practical expedient, a lessee may elect not to assess whether a rent concession occurring as a direct consequence of the COVID-19 pandemic is a lease modification, is extended to lease payments originally due on or before 30 June 2022. A lessee shall apply the practical expedient consistently to eligible contracts with similar characteristics and in similar circumstances. These amendments do not have a significant impact on the consolidated financial statements.

•

Amendments to Korean IFRS No.1103 Business Combination – Reference to the Conceptual Framework

The amendments update a reference of definition of assets and liabilities to qualify for recognition as part of a business combination in revised Conceptual Framework for Financial Reporting. However, the amendments add an exception for the recognition of liabilities and contingent liabilities within the scope of Korean IFRS No.1037 Provisions, Contingent Liabilities and Contingent Assets, and Korean IFRS No.2121 Levies. The amendments also confirm that contingent assets should not be recognized at the acquisition date. These amendments do not have a significant impact on the consolidated financial statements.

•

Amendments to Korean IFRS No.1016 Property, Plant and Equipment – Proceeds Before Intended Use

The amendments prohibit an entity from deducting from the cost of an item of property, plant and equipment any proceeds from selling items produced while the entity is preparing the asset for its intended use. Instead, the entity will recognize the proceeds from selling such items, and the costs of producing those items, as profit or loss. These amendments do not have a significant impact on the consolidated financial statements.

•

Amendments to Korean IFRS No.1037 Provisions, Contingent Liabilities and Contingent Assets – Onerous Contracts: Cost of Fulfilling a Contract

The amendments clarify that the direct costs of fulfilling a contract include both the incremental costs of fulfilling the contract and an allocation of other costs directly related to fulfilling contracts when assessing whether the contract is onerous. These amendments do not have a significant impact on the consolidated financial statements.

•

Annual improvements to Korean IFRS 2018-2020

These amendments do not have a significant impact on the consolidated financial statements.

•

Korean IFRS No.1101 First-time Adoption of Korean International Financial Reporting Standards – Subsidiaries that are first-time adopters

•

Korean IFRS No.1109 Financial Instruments – Fees related to the 10% test for derecognition of financial liabilities

•

Korean IFRS No.1116 Leases – Lease incentives

•

Korean IFRS No.1041 Agriculture – Measuring fair value

KB Financial Group Inc. and Subsidiaries

Notes to the Consolidated Interim Financial Statements

September 30, 2022 and 2021 (Unaudited), and December 31, 2021

2.1.2 The following new and amended standards have been published that are not mandatory for December 31, 2022 reporting period and have not been adopted by the Group.

•

Amendments to Korean IFRS No.1001 Presentation of Financial Statements – Classification of Liabilities as Current or Non-current

The amendments clarify that liabilities are classified as either current or non-current, depending on the substantive rights that exist at the end of the reporting period. Classification is unaffected by the likelihood that an entity will exercise the right to defer settlement of the liability or the management’s expectations thereof. Also, the settlement of liability includes the transfer of the entity’s own equity instruments; however, it would be excluded if an option to settle the liability by the transfer of the entity’s own equity instruments is recognized separately from the liability as an equity component of a compound financial instrument. The amendments should be applied for annual reporting periods beginning on or after January 1, 2023, and earlier application is permitted. The Group does not expect that these amendments have a significant impact on the consolidated financial statements.

•

Issuance of Korean IFRS No.1117 Insurance Contracts

(a) Major changes in accounting policy

Korean IFRS No.1117 Insurance Contracts will replace 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, and net insurance income and net investment income are presented separately to enable users of the information to understand the sources of net income. This standard should be applied for annual reporting periods beginning on or after January 1, 2023, and earlier application is permitted for entities that applied Korean IFRS No.1109 Financial Instruments. The Group is scheduled to apply this standard for annual reporting period beginning on January 1, 2023. If the Group prepares consolidated financial statements by applying Korean IFRS No.1117, the following parts are expected to make significant differences with the current consolidated financial statements. It does not mean to include all differences that are arising in the future and can be changed based on the future additional analysis results.

(Measurement of Insurance liabilities, etc.)

Under Korean IFRS No.1117, the Group estimates all cash flows from insurance contracts and measures the insurance liabilities using discount rate that reflects assumptions and risks at the reporting date.

In details, the Group identifies a portfolio of insurance contracts that comprises contracts exposed to similar risks and managed together, then separates the contracts with similar profitability within the portfolio as groups of insurance contracts. The groups of insurance contracts are measured as the sum of the estimate of future cash flows (including cash flows related to policy loans and reflecting time value of money, etc.), risk adjustment, and the contractual service margin. With the adoption of Korean IFRS No.1117, account of the contractual service margin will be introduced, which means unearned profit that would be recognized by providing insurance service in the future.

KB Financial Group Inc. and Subsidiaries

Notes to the Consolidated Interim Financial Statements

September 30, 2022 and 2021 (Unaudited), and December 31, 2021

2.1.2 The following new and amended standards have been published that are not mandatory for December 31, 2022 reporting period and have not been adopted by the Group. (cont’d)

Meanwhile, reinsurance contracts mean insurance contracts issued by a reinsurance company to compensate claims arising from original insurance contracts issued by other insurance companies. The groups of insurance contracts also apply assumptions consistent with the groups of original insurance contracts when estimating the present value of future cash flows for the groups of insurance contracts ceded.

(Recognition and measurement of financial performance)

Under Korean IFRS No.1117, the Group recognizes insurance revenue on an accrual basis for services (insurance coverage) provided to the policyholder by each annual reporting period, excluding investment component (refunds due to termination and maturity) to be paid to the policyholder regardless of the insured event. In addition, net insurance income and net investment income are presented separately to enable users of the information to understand the sources of net income.

The Group also includes the time value of money, financial risk and effects of their fluctuations related to the group of insurance contracts and the Group should select accounting policy whether the insurance finance income or expenses for the periods are divided to profit or loss, or other comprehensive income.

(Accounting policy for transition of insurance contracts)

Under transition requirements of Korean IFRS No.1117, the Group shall adjust the original cost-based measurement to current measurement by applying the fully retrospective approach, modified retrospective approach or fair value approach, for the group of insurance contracts issued before the transition date (the beginning of the annual reporting period immediately preceding initial application date of January 1, 2022).

In principle, the Group shall identify, recognize and measure each group of insurance contracts as if Korean IFRS No.1117 had always applied before the transition date. If this method is impracticable, the Group can apply the modified retrospective approach or the fair value approach. However, the fair value approach can be applied even though it is possible to apply the fully retrospective approach for the group of insurance contracts with direct participation features that meet specific requirements.

Meanwhile, the modified retrospective approach is a way to obtain results very close to the fully retrospective approach by using all reasonable and supportable information available without undue cost or effort. The fair value approach is a way to measure group of insurance contracts using fair value measurements based on Korean IFRS No.1113 Fair Value Measurements. When applying the fair value approach, contractual service margin or loss component of the liability for remaining coverage at the transition date are measured as the difference between the fair value of a group of insurance contracts at that date and the fulfilment cash flows measured at that date.

KB Financial Group Inc. and Subsidiaries

Notes to the Consolidated Interim Financial Statements

September 30, 2022 and 2021 (Unaudited), and December 31, 2021

2.1.2 The following new and amended standards have been published that are not mandatory for December 31, 2022 reporting period and have not been adopted by the Group. (cont’d)

Key changes in accounting policies expected by adopting Korean IFRS No.1117 are as follows:


	Korean IFRS No.1104	Korean IFRS No. 1117
Insurance liability measurement	Measure at cost using the past information	Measure at current value using information at the reporting date
Insurance liability measurement	Measure at cost using the past information	Need to choose transition method to adjust the existing group of insurance contracts to current measurement at the transition date (among the fully retrospective approach, modified retrospective approach or fair value approach)
Recognition of insurance revenue	Apply cash basis to recognize the received premium as insurance revenue	Recognize revenue by reflecting services provided to the policyholder by each annual reporting period (accrual basis)
Recognition of insurance revenue	Include investment component, such as refunds due to termination and maturity, to insurance revenue	Exclude investment component (refunds due to termination and maturity) from insurance revenue Net insurance income and net investment income (financial income) are presented separately
Deferred acquisition cost	Recognize deferred acquisition cost as a separate asset	Do not recognize deferred acquisition cost as a separate asset
Deferred acquisition cost	Estimate insurance liability based on net insurance premium (excluding administration expenses)	Estimate insurance liability based on operating insurance premium (including administration expenses)

(b)	Status of preparation for Korean IFRS No.1117 adoption

In order for the Group to smoothly adopt Korean IFRS No.1117, it is necessary to prepare a separate implementation department, implement an accounting system, train executives and employees, and analyze financial impact and etc.

Above all, for the adequacy of insurance liability measurement, the stability of the accounting system and the conformity of system calculations must be secured, and accounting policies and actuarial assumptions must be established reasonably and applied consistently every period. For this, the Group needs to verify the system continually, and prepare various internal control procedures. In particular, the Group shall implement and comply with an internal control over financial reporting suitable for the changed accounting environment so that reliable accounting information can be prepared and disclosed after the adoption of the new accounting standard.

The adoption of Korean IFRS No.1117 will not only change accounting standard, but will also affect insurance product development, sales strategies, and long-term business strategies. Accordingly, it is necessary for the Group to re-establish various business strategies after the adoption of the new accounting standard, provide continual training for related executives and employees and report preparations for adoption and future plans to management.

KB Financial Group Inc. and Subsidiaries

Notes to the Consolidated Interim Financial Statements

September 30, 2022 and 2021 (Unaudited), and December 31, 2021

2.1.2 The following new and amended standards have been published that are not mandatory for December 31, 2022 reporting period and have not been adopted by the Group. (cont’d)

The detailed preparations for adoption and future plans are as follows:

(KB Insurance Co., Ltd.)


Key activity	Progress (at the reporting date)	Future plan
Implementation department	(Feb. 2017) Organize the implementation department of Korean IFRS No.1117	Continuous operation of the implementation department
Implementation department	(Apr. 2018) Expand the implementation department of Korean IFRS No.1117 (currently, total 16 dedicated personnel)	Continuous operation of the implementation department
Implementation of accounting system	(Feb. 2017) Start implementation of the integrated actuarial system (Jun. 2018) Complete implementation of the system	Stabilization of the system (dual closing)
	(Sep. 2018) Start implementation of the accounting system (Nov. 2020) Complete implementation of the system
	Currently, pilot operation of accounting system
	(Mar. 2022) Start implementation of the internal control over financial reporting
Training for executives and employees	Prepare and implement training for executives/head of departments and employees in related departments	Plan to expand training target
Reporting to management	Report implementation of the system, financial effects, etc.	Report issues in relation to the dual closing

(Prudential Life Insurance Company of Korea Ltd.)


Key activity	Progress (at the reporting date)	Future plan
Implementation department	(Apr. 2016) Organize the implementation department of Korean IFRS No.1117 (currently, total 10 dedicated personnel) (June. 2022) Implementation department was disbanded and integrated with accounting and actuary departments	Dedicated personnel are assigned to the accounting and actuary departments to carry out various tasks for the implementation of Korean IFRS No.1117 Reinforcement of dedicated personnel
Implementation of accounting system	(Nov. 2017) Start implementation of the integrated actuarial system (Nov. 2018) Complete implementation of the system	Advancement of the system (dual closing) Implementation of the internal control over financial reporting
Implementation of accounting system	(Nov. 2020) Start implementation of the accounting system (Dec. 2021) Complete implementation of the system
Training for executives and employees	Implement training for employees	Expansion of training target etc.
Reporting to management	Report the implementation of the system, financial effect of insurance supervisory accounting for adoption of Korean IFRS No.1117	Report issues in relation to dual closing

KB Financial Group Inc. and Subsidiaries

Notes to the Consolidated Interim Financial Statements

September 30, 2022 and 2021 (Unaudited), and December 31, 2021

2.1.2 The following new and amended standards have been published that are not mandatory for December 31, 2022 reporting period and have not been adopted by the Group. (cont’d)

(KB Life Insurance Co., Ltd.)


Key activity	Progress (at the reporting date)	Future plan
Implementation department	(Jul. 2018) Organize the responsive team for Korean IFRS No.1117 (Mar. 2019) Organize and operate TF for Korean IFRS No.1117	Progress works in relation to transition to new accounting standards Reinforcement of dedicated personnel etc.
Implementation of accounting system	(Mar. 2019) Start implementation of the accounting system (Dec. 2020) Complete implementation of the system Currently, pilot operation	Stabilization of the system (dual closing) Implementation of internal control over financial reporting
Training for executives and employees	Prepare and implement training for executives/head of departments and employees in related departments (total 20 trainings) (Nov. 2020) Open online training (Dec. 2021) Implement non-face-to-face training (Jan. 2022) Implement face-to-face training for executives	Plan to increase training courses and expand training target
Reporting to management	Report implementation of the system, financial effects, etc.	Report issues in relation to the dual closing and financial effect

(c)	Financial effect evaluation

As the adoption of Korean IFRS No.1117 changes the measurement method of insurance liability and insurance revenue recognition, financial volatility is expected to occur in the consolidated financial statements for 2023.

In 2021, the Group carried out continual system conformity verification and stabilization, and preparation for dual closing in 2022. Detailed results of financial impact will be disclosed in the annual consolidated financial statements for 2022.

The Group is currently analyzing the impact of the measurement of insurance contract liabilities after the adoption of Korean IFRS No.1117 due to changes in the insurance liability measurement method and revenue recognition method.

The Group has a total insurance contract liabilities of W 58,996,628 million as of September 30, 2022, and savings type insurance accounts for 27% (W 3,605,371 million) of the total insurance premium income for the nine-month period ended September 30, 2022.

•

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. The amendments should be applied for annual reporting periods beginning on or after January 1, 2023, and earlier application is permitted. The Group does not expect that these amendments have a significant impact on the consolidated financial statements.

KB Financial Group Inc. and Subsidiaries

Notes to the Consolidated Interim Financial Statements

September 30, 2022 and 2021 (Unaudited), and December 31, 2021

2.1.2 The following new and amended standards have been published that are not mandatory for December 31, 2022 reporting period and have not been adopted by the Group. (cont’d)

•

Amendments to Korean IFRS No.1008 Accounting Policies, Changes in Accounting Estimates and Errors – Definition of Accounting Estimates

The amendments introduce the definition of accounting estimates and clarify how to distinguish changes in accounting estimates from changes in accounting policies. The amendments should be applied for annual reporting periods beginning on or after January 1, 2023, and earlier application is permitted. The Group does not expect that these amendments have a significant impact on the consolidated financial statements.

•

Amendments to Korean IFRS No.1012 Income Taxes – Deferred Tax Related to Assets and Liabilities Arising from a Single Transaction

The amendments narrow the scope of the deferred tax recognition exemption so that it no longer applies to transactions that, on initial recognition, give rise to equal taxable and deductible temporary differences. The amendments should be applied for annual reporting periods beginning on or after January 1, 2023, and earlier application is permitted. The Group does not expect that these amendments have a significant impact on the consolidated financial statements.

KB Financial Group Inc. and Subsidiaries

Notes to the Consolidated Interim Financial Statements

September 30, 2022 and 2021 (Unaudited), and December 31, 2021

2.2 Measurement Basis

The consolidated financial statements have been prepared based on the historical cost accounting model unless otherwise specified.

2.3 Functional and Presentation Currency

Items included in the financial statements of each entity of the Group are measured using the currency of the primary economic environment in which the entity operates (“functional currency”). The consolidated financial statements are presented in Korean won, which is the Parent Company’s functional and presentation currency.

2.4 Critical Accounting Estimates

The Group applies accounting policies and uses judgements, accounting estimates, and assumptions that may have a significant impact on the assets (liabilities) and incomes (expenses) in preparing the consolidated financial statements. Management’s estimates of outcomes may differ from actual outcomes if management’s estimates and assumptions based on management’s best judgment are different from the actual environment.

Estimates and underlying assumptions are continually evaluated, and changes in accounting estimates are recognized in the period in which the estimates are changed and in any future periods affected.

Significant accounting estimates and assumptions applied in the preparation of these condensed consolidated interim financial statements are the same as those applied to the consolidated financial statements for the year ended December 31, 2021, except for the estimates used to determine income tax expense.

3. Significant Accounting Policies

The significant accounting policies and calculation methods applied in the preparation of these consolidated interim financial statements are the same as those applied to the consolidated financial statements for the year ended December 31, 2021, except for the impact of changes due to adopting new and amended standards and interpretations described in Note 2.1 and below paragraph.

Income tax expense for the interim period is measured applying the expected average annual income tax rate for the expected total annual income.

KB Financial Group Inc. and Subsidiaries

Notes to the Consolidated Interim Financial Statements

September 30, 2022 and 2021 (Unaudited), and December 31, 2021

4. Financial Risk Management

4.1 Summary

4.1.1 Overview of financial risk management policy

The financial risks that the Group is exposed to are credit risk, market risk, liquidity risk, operational risk, and others.

This note regarding financial risk management provides information about the risks that the Group is exposed to and about its objectives, policies, risk assessment and management procedures, and capital management. Additional quantitative information is disclosed throughout the consolidated financial statements.

The Group’s risk management system focuses on efficiently supporting long-term strategy and management decisions of the Group by increasing risk transparency, preventing risk transfer between subsidiaries and preemptive response to rapidly changing financial environments. Credit risk, market risk, operational risk, interest rate risk, insurance risk, liquidity risk, credit concentration risk, strategy risk, and reputation risk are recognized as the Group’s significant risks and measured and managed by quantifying them in the form of internal capital or Value at Risk (“VaR”) using statistical methods.

4.1.2 Risk management organization

4.1.2.1 Risk Management Committee

The Risk Management Committee, as the ultimate decision-making body, deals with risk-related issues, such as establishing risk management strategies in accordance with the strategic direction determined by the board of directors, determining the affordable level of risk appetite, reviewing the level of risk and the status of risk management activities, approving the application of risk management systems, methodologies, and major improvements, and establishing and approving risk management policies and procedures to timely recognize, measure, monitor, and control risks arising from various transactions by the Group.

4.1.2.2 Risk Management Council

The Risk Management Council is responsible for consulting on matters delegated by the Risk Management Committee and requests for review by the Management Executive Committee, consulting on details of each subsidiary’s risk management policies and procedures, monitoring the Group’s risk management status, and establishing and implementing necessary measures.

4.1.2.3 Risk Management Department

The Risk Management Department performs the Group’s risk management detailed policies, procedures, and business processes, and is responsible for calculating the Group’s risk-weighted assets, monitoring and managing internal capital limits.

KB Financial Group Inc. and Subsidiaries

Notes to the Consolidated Interim Financial Statements

September 30, 2022 and 2021 (Unaudited), and December 31, 2021

4.2 Credit Risk

4.2.1 Overview of credit risk

Credit risk is the risk of loss from the portfolio of assets held due to the counterparty’s default, breach of contract, and deterioration of credit quality. For risk management purposes, the Group manages all factors of credit risk exposure, such as default risk of individual borrowers, country risk, and risk of specific sectors in an integrated way.

4.2.2 Credit risk management

The Group measures the expected loss and internal capital for the assets subject to credit risk management, including on-balance and off-balance assets, and uses them as management indicators. The Group allocates and manages credit risk internal capital limits.

In addition, to prevent excessive concentration of exposures by borrower and industry, the total exposure limit at the Group level is introduced, applied, and managed to control the credit concentration risk.

All of the Kookmin Bank’s loan customers (individuals and corporates) are assigned a credit rating and managed by a comprehensive internal credit evaluation system. For individuals, the credit rating is evaluated by utilizing personal information, income and job information, asset information, and bank transaction information. For corporates, the credit rating is evaluated by analyzing and utilizing financial and non-financial information which measures current and future corporate value and ability to repay the debt. Also, the extent to which corporates have the ability to meet debt obligations is comprehensively considered.

The credit rating, once assigned, serves as the fundamental instrument in Kookmin Bank’s credit risk management, and is applied in a wide range of credit risk management processes, including credit approval, credit limit management, loan pricing, and assessment of allowances for credit losses. For corporates, Kookmin Bank conducts a regular credit evaluation at least once a year, and the review and supervision departments regularly validate the adequacy of credit ratings to manage credit risks.

KB Kookmin Card Co., Ltd.‘s credit scoring system is divided into Application Scoring System (“ASS”) and Behavior Scoring System (“BSS”). For applications that meet the eligibility criteria for card issuance, the card will be issued only if the ASS credit rating is above the standard. KB Kookmin Card Co., Ltd.‘s internal information, external information from the credit bureau company and others, and personal information on the application are used to calculate the ASS credit rating. The BSS, which is recalculated on a weekly basis, predicts the delinquency probability of cardholders, and utilizes it to monitor cardholders and portfolio risk.

In order to establish a credit risk management system, the Group manages credit risk by forming a separate risk management organization. In particular, independently of the Sales Group, the Credit Management & Analysis Group of Kookmin Bank, a subsidiary, is in charge of loan policy, loan system, credit rating, credit analysis, follow-up management, and corporate restructuring. The Risk Management Group of Kookmin Bank is responsible for establishing policies on credit risk management, measuring and limiting internal capital of credit risk, setting credit limits, credit review, and verification of credit rating models.

KB Financial Group Inc. and Subsidiaries

Notes to the Consolidated Interim Financial Statements

September 30, 2022 and 2021 (Unaudited), and December 31, 2021

4.2.3 Maximum exposure to credit risk

The Group’s maximum exposures to credit risk without consideration of collateral values in relation to financial instruments other than equity securities as of September 30, 2022 and December 31, 2021, are as follows:


(In millions of Korean won)	September 30, 2022		December 31, 2021
Financial assets
Due from financial institutions measured at amortized cost *	W	24,357,883	W	28,362,387
Financial assets at fair value through profit or loss:
Due from financial institutions measured at fair value through profit or loss		90,339		200,742
Securities measured at fair value through profit or loss		59,039,214		63,002,692
Loans measured at fair value through profit or loss		235,606		269,296
Financial instruments indexed to the price of gold		98,404		113,622
Derivatives		17,820,011		3,721,370
Loans measured at amortized cost *		456,863,042		417,900,273
Financial investments:
Securities measured at fair value through other comprehensive income		54,602,517		56,259,511
Securities measured at amortized cost *		54,718,627		44,471,628
Loans measured at fair value through other comprehensive income		448,288		313,604
Other financial assets *		20,101,038		10,755,350

		688,374,969		625,370,475

Off-balance sheet items
Acceptances and guarantees contracts		12,749,438		10,199,689
Financial guarantee contracts		8,951,200		6,892,464
Commitments		187,422,596		170,218,143

		209,123,234		187,310,296

	W	897,498,203	W	812,680,771

*	After netting of allowance

4.2.4 Credit risk of loans

The Group maintains allowances for loan losses associated with credit risk of loans to manage its credit risk.

The Group assesses expected credit losses and recognizes loss allowances of financial assets at amortized cost and financial assets at fair value through other comprehensive income. Financial assets at fair value through profit or loss are excluded. Expected credit losses are a probability-weighted estimate of possible credit losses occurring in a certain range by reflecting reasonable and supportable information that is reasonably available at the end of the reporting period without undue cost or effort, including information about past events, current conditions, and forecasts of future economic conditions. The Group measures the expected credit losses of loans classified as financial assets at amortized cost, by deducting allowances for credit losses. The expected credit losses of loans classified as financial assets at fair value through other comprehensive income are presented in other comprehensive income in the consolidated financial statements.

KB Financial Group Inc. and Subsidiaries

Notes to the Consolidated Interim Financial Statements

September 30, 2022 and 2021 (Unaudited), and December 31, 2021

4.2.4.1 Credit risk exposure

Credit qualities of loans as of September 30, 2022 and December 31, 2021, are as follows:

(In millions of Korean won)


	September 30, 2022
	12-month expected credit losses		Lifetime expected credit losses				Not applying expected credit losses		Total
	12-month expected credit losses		Non-impaired		Impaired		Not applying expected credit losses		Total
Loans measured at amortized cost *
Corporate
Grade 1	W	150,758,360	W	5,951,739	W	3,369	W	—	W	156,713,468
Grade 2		69,413,298		8,500,791		23,450		—		77,937,539
Grade 3		3,740,009		3,074,150		25,968		—		6,840,127
Grade 4		605,855		1,009,931		11,484		—		1,627,270
Grade 5		14,343		388,073		2,000,309		—		2,402,725

		224,531,865		18,924,684		2,064,580		—		245,521,129

Retail
Grade 1		168,604,629		4,341,314		7,673		—		172,953,616
Grade 2		9,057,541		4,027,470		33,248		—		13,118,259
Grade 3		3,140,287		1,411,086		18,487		—		4,569,860
Grade 4		223,008		441,376		25,204		—		689,588
Grade 5		22,472		470,864		848,766		—		1,342,102

		181,047,937		10,692,110		933,378		—		192,673,425

Credit card
Grade 1		11,316,101		1,379,711		—		—		12,695,812
Grade 2		4,308,756		1,157,747		—		—		5,466,503
Grade 3		1,335,127		1,892,526		—		—		3,227,653
Grade 4		3,249		301,331		—		—		304,580
Grade 5		655		127,428		563,977		—		692,060

		16,963,888		4,858,743		563,977		—		22,386,608

		422,543,690		34,475,537		3,561,935		—		460,581,162

Loans measured at fair value through other comprehensive income
Corporate
Grade 1		369,259		—		—		—		369,259
Grade 2		79,029		—		—		—		79,029
Grade 3		—		—		—		—		—
Grade 4		—		—		—		—		—
Grade 5		—		—		—		—		—

		448,288		—		—		—		448,288

		448,288		—		—		—		448,288

	W	422,991,978	W	34,475,537	W	3,561,935	W	—	W	461,029,450

KB Financial Group Inc. and Subsidiaries

Notes to the Consolidated Interim Financial Statements

September 30, 2022 and 2021 (Unaudited), and December 31, 2021

4.2.4.1 Credit risk exposure (cont’d)

(In millions of Korean won)


	December 31, 2021
	12-month expected credit losses		Lifetime expected credit losses				Not applying expected credit losses		Total
	12-month expected credit losses		Non-impaired		Impaired		Not applying expected credit losses		Total
Loans measured at amortized cost *
Corporate
Grade 1	W	111,284,284	W	5,345,956	W	3,705	W	—	W	116,633,945
Grade 2		68,050,042		7,847,126		4,338		—		75,901,506
Grade 3		5,323,745		2,850,266		2,949		—		8,176,960
Grade 4		586,857		1,037,461		7,570		—		1,631,888
Grade 5		12,877		352,046		2,143,708		—		2,508,631

		185,257,805		17,432,855		2,162,270		—		204,852,930

Retail
Grade 1		170,810,128		4,593,302		11,609		—		175,415,039
Grade 2		9,093,868		4,209,451		35,097		—		13,338,416
Grade 3		3,410,624		1,414,439		23,467		—		4,848,530
Grade 4		235,150		400,029		17,998		—		653,177
Grade 5		495,987		445,588		710,341		—		1,651,916

		184,045,757		11,062,809		798,512		—		195,907,078

Credit card
Grade 1		10,640,412		1,113,400		—		—		11,753,812
Grade 2		3,919,053		1,027,546		—		—		4,946,599
Grade 3		1,360,908		1,412,951		—		—		2,773,859
Grade 4		82,565		608,250		—		—		690,815
Grade 5		1,267		130,712		527,256		—		659,235

		16,004,205		4,292,859		527,256		—		20,824,320

		385,307,767		32,788,523		3,488,038		—		421,584,328

Loans measured at fair value through other comprehensive income
Corporate
Grade 1		233,868		—		—		—		233,868
Grade 2		79,736		—		—		—		79,736
Grade 3		—		—		—		—		—
Grade 4		—		—		—		—		—
Grade 5		—		—		—		—		—

		313,604		—		—		—		313,604

		313,604		—		—		—		313,604

	W	385,621,371	W	32,788,523	W	3,488,038	W	—	W	421,897,932

*	Before netting of allowance

KB Financial Group Inc. and Subsidiaries

Notes to the Consolidated Interim Financial Statements

September 30, 2022 and 2021 (Unaudited), and December 31, 2021

4.2.4.1 Credit risk exposure (cont’d)

Credit qualities of loans graded according to internal credit ratings as of September 30, 2022 and December 31, 2021, are as follows:


	Range of probability of default (%)	Retail	Corporate
Grade 1	0.0 ~ 1.0	1 ~ 5 grade	AAA ~ BBB+
Grade 2	1.0 ~ 5.0	6 ~ 8 grade	BBB ~ BB
Grade 3	5.0 ~ 15.0	9 ~ 10 grade	BB- ~ B
Grade 4	15.0 ~ 30.0	11 grade	B- ~ CCC
Grade 5	30.0 ~	12 grade or under	CC or under

4.2.4.2 Quantification of the extent to which collateral and other credit enhancements mitigate credit risk of loans as of September 30, 2022 and December 31, 2021, are as follows:


(In millions of Korean won)	September 30, 2022
	12-month expected credit losses		Lifetime expected credit losses				Total
	12-month expected credit losses		Non-impaired		Impaired		Total
Guarantees	W	97,421,458	W	7,094,625	W	299,557	W	104,815,640
Deposits and savings		6,341,378		135,806		75,436		6,552,620
Property and equipment		17,889,383		1,152,754		253,482		19,295,619
Real estate		191,416,013		14,969,240		2,083,677		208,468,930

	W	313,068,232	W	23,352,425	W	2,712,152	W	339,132,809


(In millions of Korean won)	December 31, 2021
	12-month expected credit losses		Lifetime expected credit losses				Total
	12-month expected credit losses		Non-impaired		Impaired		Total
Guarantees	W	90,696,507	W	6,604,758	W	396,097	W	97,697,362
Deposits and savings		5,723,090		98,389		79,229		5,900,708
Property and equipment		13,205,822		597,251		319,697		14,122,770
Real estate		182,139,890		13,736,634		1,990,847		197,867,371

	W	291,765,309	W	21,037,032	W	2,785,870	W	315,588,211

KB Financial Group Inc. and Subsidiaries

Notes to the Consolidated Interim Financial Statements

September 30, 2022 and 2021 (Unaudited), and December 31, 2021

4.2.5 Credit risk of securities

Credit qualities of securities exposed to credit risk other than equity securities among financial investments as of September 30, 2022 and December 31, 2021, are as follows:

(In millions of Korean won)


	September 30, 2022
	12-month expected credit losses		Lifetime expected credit losses				Not applying expected credit losses		Total
	12-month expected credit losses		Non-impaired		Impaired		Not applying expected credit losses		Total
Securities measured at amortized cost *
Grade 1	W	52,746,534	W	—	W	—	W	—	W	52,746,534
Grade 2		1,977,321		—		—		—		1,977,321
Grade 3		1,426		—		—		—		1,426
Grade 4		—		—		—		—		—
Grade 5		—		—		—		—		—

		54,725,281		—		—		—		54,725,281

Securities measured at fair value through other comprehensive income
Grade 1		49,414,341		—		—		—		49,414,341
Grade 2		5,089,956		—		—		—		5,089,956
Grade 3		70,156		7,785		—		—		77,941
Grade 4		20,279		—		—		—		20,279
Grade 5		—		—		—		—		—

		54,594,732		7,785		—		—		54,602,517

	W	109,320,013	W	7,785	W	—	W	—	W	109,327,798

(In millions of Korean won)
	December 31, 2021
	12-month expected credit losses		Lifetime expected credit losses				Not applying expected credit losses		Total
	12-month expected credit losses		Non-impaired		Impaired		Not applying expected credit losses		Total
Securities measured at amortized cost *
Grade 1	W	43,427,028	W	—	W	—	W	—	W	43,427,028
Grade 2		1,039,757		—		—		—		1,039,757
Grade 3		1,371		7,641		—		—		9,012
Grade 4		—		—		—		—		—
Grade 5		—		—		—		—		—

		44,468,156		7,641		—		—		44,475,797

Securities measured at fair value through other comprehensive income
Grade 1		51,490,960		—		—		—		51,490,960
Grade 2		4,682,582		—		—		—		4,682,582
Grade 3		42,861		3,973		—		—		46,834
Grade 4		39,135		—		—		—		39,135
Grade 5		—		—		—		—		—

		56,255,538		3,973		—		—		56,259,511

	W	100,723,694	W	11,614	W	—	W	—	W	100,735,308

*	Before netting of allowance

KB Financial Group Inc. and Subsidiaries

Notes to the Consolidated Interim Financial Statements

September 30, 2022 and 2021 (Unaudited), and December 31, 2021

4.2.5 Credit risk of securities (cont’d)

Credit qualities of securities other than equity securities, according to the credit ratings by external credit rating agencies as of September 30, 2022 and December 31, 2021, are as follows:

Credit quality

Domestic

Foreign

KIS

NICE P&I

KAP

FnPricing Inc.

S&P

Fitch-IBCA

Moody’s

Grade 1

AA0 to AAA

A- to AAA

A3 to Aaa

Grade 2

A- to AA-

BBB- to BBB+

Baa3 to Baa1

Grade 3

BBB0 to BBB+

BB to BB+

Ba2 to Ba1

Grade 4

BB0 to BBB-

B+ to BB-

B1 to Ba3

Grade 5

BB- or under

B or under

B2 or under

Credit qualities of debt securities denominated in Korean won are based on the lowest credit rating by the domestic credit rating agencies above, and those denominated in foreign currencies are based on the lowest credit rating by the foreign credit rating agencies above.

4.2.6 Credit risk of due from financial institutions

Credit qualities of due from financial institutions as of September 30, 2022 and December 31, 2021, are as follows:

(In millions of Korean won)


	September 30, 2022
	12-month expected credit losses		Lifetime expected credit losses				Not applying expected credit losses		Total
	12-month expected credit losses		Non-impaired		Impaired		Not applying expected credit losses		Total
Due from financial institutions measured at amortized cost *
Grade 1	W	23,113,967	W	—	W	—	W	—	W	23,113,967
Grade 2		718,886		—		—		—		718,886
Grade 3		—		—		—		—		—
Grade 4		—		—		—		—		—
Grade 5		528,570		—		—		—		528,570

	W	24,361,423	W	—	W	—	W	—	W	24,361,423

(In millions of Korean won)
	December 31, 2021
	12-month expected credit losses		Lifetime expected credit losses				Not applying expected credit losses		Total
	12-month expected credit losses		Non-impaired		Impaired		Not applying expected credit losses		Total
Due from financial institutions measured at amortized cost *
Grade 1	W	26,548,145	W	—	W	—	W	—	W	26,548,145
Grade 2		1,305,539		—		—		—		1,305,539
Grade 3		61,177		—		—		—		61,177
Grade 4		—		—		—		—		—
Grade 5		450,495		—		—		—		450,495

	W	28,365,356	W	—	W	—	W	—	W	28,365,356

*	Before netting of allowance

The classification criteria of the credit qualities of due from financial institutions as of September 30, 2022 and December 31, 2021, are the same as the criteria for securities other than equity securities.

KB Financial Group Inc. and Subsidiaries

Notes to the Consolidated Interim Financial Statements

September 30, 2022 and 2021 (Unaudited), and December 31, 2021

4.2.7 Credit risk concentration analysis

4.2.7.1 Classifications of corporate loans by industry as of September 30, 2022 and December 31, 2021, are as follows:

(In millions of Korean won)


	September 30, 2022
	Loans		%		Allowances			Carrying amount
Financial institutions	W	38,264,895		15.54	W	(45,576	)	W	38,219,319
Manufacturing		57,035,612		23.17		(593,532	)		56,442,080
Service		98,378,541		39.96		(405,768	)		97,972,773
Wholesale and retail		30,491,323		12.38		(288,290	)		30,203,033
Construction		6,950,417		2.83		(194,231	)		6,756,186
Public sector		2,121,167		0.87		(81,133	)		2,040,034
Others		12,963,068		5.25		(185,606	)		12,777,462

	W	246,205,023		100.00	W	(1,794,136	)	W	244,410,887

(In millions of Korean won)


	December 31, 2021
	Loans		%		Allowances			Carrying amount
Financial institutions	W	22,059,895		10.74	W	(32,856	)	W	22,027,039
Manufacturing		49,149,918		23.92		(510,762	)		48,639,156
Service		86,926,095		42.31		(450,272	)		86,475,823
Wholesale and retail		26,862,247		13.08		(257,541	)		26,604,706
Construction		5,683,471		2.77		(228,803	)		5,454,668
Public sector		2,070,960		1.01		(95,053	)		1,975,907
Others		12,683,244		6.17		(311,629	)		12,371,615

	W	205,435,830		100.00	W	(1,886,916	)	W	203,548,914

4.2.7.2 Classifications of retail loans and credit card receivables as of September 30, 2022 and December 31, 2021, are as follows:

(In millions of Korean won)


	September 30, 2022
	Loans		%		Allowances			Carrying amount
Housing loan	W	93,003,442		43.25	W	(127,456	)	W	92,875,986
General loan		99,669,983		46.35		(997,288	)		98,672,695
Credit card		22,386,608		10.40		(799,240	)		21,587,368

	W	215,060,033		100.00	W	(1,923,984	)	W	213,136,049

(In millions of Korean won)


	December 31, 2021
	Loans		%		Allowances			Carrying amount
Housing loan	W	93,695,479		43.23	W	(71,424	)	W	93,624,055
General loan		102,211,599		47.16		(933,571	)		101,278,028
Credit card		20,824,320		9.61		(792,144	)		20,032,176

	W	216,731,398		100.00	W	(1,797,139	)	W	214,934,259

KB Financial Group Inc. and Subsidiaries

Notes to the Consolidated Interim Financial Statements

September 30, 2022 and 2021 (Unaudited), and December 31, 2021

4.2.7.3 Classifications of due from financial institutions, securities other than equity securities, and derivative financial assets by industry as of September 30, 2022 and December 31, 2021, are as follows:


(In millions of Korean won)	September 30, 2022
	Amount		%		Allowances			Carrying amount
Due from financial institutions measured at amortized cost
Finance and insurance	W	24,361,423		100.00	W	(3,540	)	W	24,357,883

		24,361,423		100.00		(3,540	)		24,357,883

Due from financial institutions measured at fair value through profit or loss
Finance and insurance		90,339		100.00		—			90,339

		90,339		100.00		—			90,339

Securities measured at fair value through profit or loss
Government and government funded institutions		13,903,445		23.55		—			13,903,445
Finance and insurance		33,079,367		56.03		—			33,079,367
Others		12,056,402		20.42		—			12,056,402

		59,039,214		100.00		—			59,039,214

Derivative financial assets
Government and government funded institutions		34,345		0.19		—			34,345
Finance and insurance		16,665,157		93.52		—			16,665,157
Others		1,120,509		6.29		—			1,120,509

		17,820,011		100.00		—			17,820,011

Securities measured at fair value through other comprehensive income
Government and government funded institutions		24,302,459		44.51		—			24,302,459
Finance and insurance		20,536,914		37.61		—			20,536,914
Others		9,763,144		17.88		—			9,763,144

		54,602,517		100.00		—			54,602,517

Securities measured at amortized cost
Government and government funded institutions		36,744,870		67.15		(31	)		36,744,839
Finance and insurance		15,642,751		28.58		(5,599	)		15,637,152
Others		2,337,660		4.27		(1,024	)		2,336,636

		54,725,281		100.00		(6,654	)		54,718,627

	W	210,638,785			W	(10,194	)	W	210,628,591

KB Financial Group Inc. and Subsidiaries

Notes to the Consolidated Interim Financial Statements

September 30, 2022 and 2021 (Unaudited), and December 31, 2021


(In millions of Korean won)	December 31, 2021
	Amount		%		Allowances			Carrying amount
Due from financial institutions measured at amortized cost
Finance and insurance	W	28,365,356		100.00	W	(2,969	)	W	28,362,387

		28,365,356		100.00		(2,969	)		28,362,387

Due from financial institutions measured at fair value through profit or loss
Finance and insurance		200,742		100.00		—			200,742

		200,742		100.00		—			200,742

Securities measured at fair value through profit or loss
Government and government funded institutions		16,101,187		25.56		—			16,101,187
Finance and insurance		35,025,800		55.59		—			35,025,800
Others		11,875,705		18.85		—			11,875,705

		63,002,692		100.00		—			63,002,692

Derivative financial assets
Government and government funded institutions		6,985		0.19		—			6,985
Finance and insurance		3,554,783		95.52		—			3,554,783
Others		159,602		4.29		—			159,602

		3,721,370		100.00		—			3,721,370

Securities measured at fair value through other comprehensive income
Government and government funded institutions		24,609,458		43.74		—			24,609,458
Finance and insurance		22,669,379		40.29		—			22,669,379
Others		8,980,674		15.97		—			8,980,674

		56,259,511		100.00		—			56,259,511

Securities measured at amortized cost
Government and government funded institutions		31,996,180		71.94		(34	)		31,996,146
Finance and insurance		10,450,497		23.50		(3,337	)		10,447,160
Others		2,029,120		4.56		(798	)		2,028,322

		44,475,797		100.00		(4,169	)		44,471,628

	W	196,025,468			W	(7,138	)	W	196,018,330

Due from financial institutions, financial instruments at fair value through profit or loss linked to gold price, and derivative financial instruments are mostly related to the finance and insurance industry with high credit ratings.

KB Financial Group Inc. and Subsidiaries

Notes to the Consolidated Interim Financial Statements

September 30, 2022 and 2021 (Unaudited), and December 31, 2021

4.3 Liquidity Risk

4.3.1 Overview of liquidity risk

Liquidity risk is a risk that the Group becomes insolvent due to the mismatch between the inflow and outflow of funds, unexpected cash outflows, or a risk of loss due to financing funds at a high interest rate or disposing of securities at an unfavorable price due to lack of available funds. The Group manages its liquidity risk through analysis of the contractual maturity of interest-bearing assets and liabilities, assets and liabilities related to the other inflows and outflows of funds, and off-balance sheet items related to the inflows and outflows of funds such as currency derivative instruments and others.

4.3.2 Liquidity risk management and indicator

The liquidity risk is managed by risk management policies and liquidity risk management guidelines set forth in these policies that apply to all risk management policies and procedures that may arise throughout the overall business of the Group.

The Group calculates and manages liquidity ratio and others for all transactions and off-balance transactions related to liquidity, that affect the cash flows in Korean won and foreign currency funds raised and operated for the management of liquidity risks and periodically reports them to the Risk Management Committee.

4.3.3 Analysis of remaining contractual maturity of financial liabilities

The cash flows disclosed in the maturity analysis are undiscounted contractual amounts including principal and future interest payments; as such, amounts in the table below do not match with those in the consolidated statements of financial position which are based on discounted cash flows. The future interest payments for floating-rate liabilities are calculated on the assumption that the current interest rate is the same until maturity.

KB Financial Group Inc. and Subsidiaries

Notes to the Consolidated Interim Financial Statements

September 30, 2022 and 2021 (Unaudited), and December 31, 2021

4.3.3 Analysis of remaining contractual maturity of financial liabilities (cont’d)

Remaining contractual maturity of financial liabilities other than derivatives held for cash flow hedge, and off-balance sheet items as of September 30, 2022 and December 31, 2021, are as follows:


(In millions of Korean won)	September 30, 2022
	On demand		Up to 1 month		1-3 months		3-12 months		1-5 years		Over 5 years		Total
Financial liabilities
Financial liabilities at fair value through profit or loss ¹	W	2,319,719	W	—	W	—	W	—	W	—	W	—	W	2,319,719
Financial liabilities designated at fair value through profit or loss ¹		9,942,340		—		—		—		—		—		9,942,340
Derivatives held for trading ¹		18,384,424		—		—		—		—		—		18,384,424
Derivatives held for hedging ²		—		16,050		62,745		74,563		137,175		393		290,926
Deposits ³		183,300,083		25,722,212		59,600,964		110,325,891		15,218,646		1,168,338		395,336,134
Borrowings		8,527,743		19,780,323		7,618,901		20,269,426		13,522,663		1,126,011		70,845,067
Debentures		11,540		3,947,287		7,466,911		23,755,560		34,715,893		6,643,222		76,540,413
Lease liabilities		194		25,305		45,875		165,661		374,104		40,058		651,197
Other financial liabilities		194,679		31,510,004		351,454		506,487		896,252		394,746		33,853,622

	W	222,680,722	W	81,001,181	W	75,146,850	W	155,097,588	W	64,864,733	W	9,372,768	W	608,163,842

Off-balance sheet items
Commitments ⁴	W	187,422,596	W	—	W	—	W	—	W	—	W	—	W	187,422,596
Acceptances and guarantees contracts		12,749,438		—		—		—		—		—		12,749,438
Financial guarantee contracts ⁵		8,951,200		—		—		—		—		—		8,951,200

	W	209,123,234	W	—	W	—	W	—	W	—	W	—	W	209,123,234

KB Financial Group Inc. and Subsidiaries

Notes to the Consolidated Interim Financial Statements

September 30, 2022 and 2021 (Unaudited), and December 31, 2021

4.3.3 Analysis of remaining contractual maturity of financial liabilities (cont’d)


(In millions of Korean won)	December 31, 2021
	On demand		Up to 1 month		1-3 months		3-12 months		1-5 years		Over 5 years		Total
Financial liabilities
Financial liabilities at fair value through profit or loss ¹	W	2,939,584	W	—	W	—	W	—	W	—	W	—	W	2,939,584
Financial liabilities designated at fair value through profit or loss ¹		9,149,396		—		—		—		—		—		9,149,396
Derivatives held for trading ¹		3,509,789		—		—		—		—		—		3,509,789
Derivatives held for hedging ²		—		11,355		9,993		31,135		31,640		1,423		85,546
Deposits ³		204,616,202		16,556,213		31,123,968		111,140,222		10,157,238		1,329,120		374,922,963
Borrowings		8,504,084		17,807,785		5,825,350		13,861,238		10,380,171		1,003,369		57,381,997
Debentures		14,528		3,438,621		5,318,699		20,496,869		34,863,044		6,509,966		70,641,727
Lease liabilities		139		23,387		42,406		157,536		334,359		50,555		608,382
Other financial liabilities		217,874		22,953,515		203,897		354,876		934,389		372,745		25,037,296

	W	228,951,596	W	60,790,876	W	42,524,313	W	146,041,876	W	56,700,841	W	9,267,178	W	544,276,680

Off-balance sheet items
Commitments ⁴	W	170,218,143	W	—	W	—	W	—	W	—	W	—	W	170,218,143
Acceptances and guarantees contracts		10,199,689		—		—		—		—		—		10,199,689
Financial guarantee contracts ⁵		6,892,464		—		—		—		—		—		6,892,464

	W	187,310,296	W	—	W	—	W	—	W	—	W	—	W	187,310,296

Financial liabilities measured or designated at fair value through profit or loss and derivatives held for trading are not managed by contractual maturity because they are expected to be traded or redeemed before maturity. Therefore, the carrying amounts of those financial instruments are included in the ‘On demand’ category.

²	Cash flows of derivatives held for hedging are shown at net amount of cash inflows and outflows by remaining contractual maturity.

³	Deposits that are contractually repayable on demand or on short notice are included in the ‘On demand’ category.

⁴	Commitments are included in the ‘On demand’ category because payments can be requested at any time.

⁵	Cash flows under financial guarantee contracts are classified based on the earliest period that the contract can be executed.

KB Financial Group Inc. and Subsidiaries

Notes to the Consolidated Interim Financial Statements

September 30, 2022 and 2021 (Unaudited), and December 31, 2021

4.4 Market Risk

4.4.1 Concept

Market risk refers to risks that can result in losses due to changes in market factors such as interest rate, stock price, and foreign exchange rate, etc., which arise from securities, derivatives, and others. The most significant risks associated with trading positions are interest rate risk, currency risk, and additional risks include stock price risk. The non-trading position is also exposed to interest rate risk. The Group manages the market risks by dividing them into those arising from the trading position and those arising from the non-trading position. The above market risks are measured and managed by each subsidiary.

4.4.2 Risk management

The Group sets and monitors internal capital limits for market risk and interest rate risk to manage the risks of trading and non-trading positions. In order to manage market risk efficiently, the Group maintains risk management systems and procedures such as trading policies and procedures, market risk management guidelines for trading positions, and interest rate risk management guidelines for non-trading positions. The entire process is carried out through consultation with the Risk Management Council and approval by the Risk Management Committee of the Group.

In the case of Kookmin Bank, a major subsidiary, the Risk Management Council establishes and enforces overall market risk management policies for market risk management and decides to establish position limits, loss limits, VaR limits, and approves non-standard new products. In addition, the Market Risk Management Subcommittee, chaired by Chief Risk Officer (“CRO”), is a practical decision-making body for market risk management and determines position limits, loss limits, VaR limits, sensitivity limits, and scenario loss limits for each department of the business group.

Kookmin Bank’s Asset-Liability Management Committee (“ALCO”) determines interest rate and commission operating standards and Asset Liability Management (“ALM”) operation policies and enacts and revises relevant guidelines. The Risk Management Committee and the Risk Management Council monitor the establishment and enforcement of ALM risk management policies and enact and revise ALM risk management guidelines. Interest rate risk limits are set based on future asset and liability positions and expected interest rate volatility, which reflect annual business plans. The Treasury Department and the Risk Management Department regularly measure and monitor interest rate risk and report the status and limit of interest rate risk including changes in Economic Value of Equity (“ΔEVE”), changes in Net Interest Income (“ΔNII”), and duration gap to the ALCO and the Risk Management Council on a monthly basis, and to the Risk Management Committee on a quarterly basis. To ensure the adequacy of interest rate risk and liquidity risk management, the Risk Management Department assigns the limits, monitors and reviews the procedures and tasks of ALM operations conducted by the Treasury department, and reports related matters to the management independently.

Kookmin Bank is closely monitoring the outputs of various industry groups and markets that manage the transition to the new interest rate benchmark, including announcements by LIBOR regulation authority and various consultative bodies related to the transition to alternative interest rate. In response to these announcements, Kookmin Bank has completed most of the transition and replacement plans according to LIBOR transition programs and plans consisting of major business areas such as finance, accounting, tax, legal, IT, and risk. The program is under the control of the CFO and related matters are reported to the board of directors and consultative bodies with senior management as members. Kookmin Bank continues its efforts as a market participant to actively express opinions so that the index interest rate benchmark reform can be carried out in the direction of minimizing the financial and non-financial impacts and operational risks and minimizing confusion among stakeholders.

KB Financial Group Inc. and Subsidiaries

Notes to the Consolidated Interim Financial Statements

September 30, 2022 and 2021 (Unaudited), and December 31, 2021

4.5 Operational Risk

4.5.1 Concept

Operational risk of the Group refers to the risk of loss that may occur due to improper or incorrect internal procedures, personnel, systems or external events. Operational risk management plays a role in enhancing the stability and soundness of financial institutions by managing the appropriate level of capital and supplementing the internal control system.

4.5.2 Risk management

The purpose of operational risk management is not only to comply with supervisory and regulatory requirements, but also to spread risk management culture, strengthen internal control, improve processes, and provide timely feedback to management and all employees. The Parent Company manages the Group’s overall operational risk, and each subsidiary establishes and implements operational risk management policies according to its own risk level and implements and operates related systems. The Group Risk Management Committee establishes and allocates risk capital of operational risk for each subsidiary, and subsidiaries manage operational risks at an appropriate level within the allocated risk capital.

5. Segment Information

5.1 Overall Segment Information and Business Segments

The Group classifies reporting segments based on the nature of the products and services provided, the type of customer, and the Group’s management organization.


Banking business	Corporate banking	Loans, deposit products, and other related financial services to large, small and medium-sized enterprises and SOHOs

	Retail banking	Loans, deposit products, and other related financial services to individuals and households

	Other banking services	Trading activities in securities and derivatives, funding, and other supporting activities

Securities business		Investment banking, brokerage services, and other supporting activities

Non-life insurance business		Non-life insurance and other supporting activities

Credit card business		Credit sale, cash advance, card loan, and other supporting activities

Life insurance business		Life insurance and other supporting activities

KB Financial Group Inc. and Subsidiaries

Notes to the Consolidated Interim Financial Statements

September 30, 2022 and 2021 (Unaudited), and December 31, 2021

5.1 Overall Segment Information and Business Segments (cont’d)

Financial information by business segment as of September 30, 2022 and December 31, 2021 and for the nine-month periods ended September 30, 2022 and 2021, are as follows:


(In millions of Korean won)
	2022
	Banking business
	Corporate banking			Retail banking			Other banking services			Sub-total			Securities			Non-life insurance			Credit card			Life insurance			Others			Consolidation adjustments			Total
Net operating revenues from external customers	W	3,439,079		W	3,049,593		W	(209,126	)	W	6,279,546		W	970,743		W	1,306,235		W	1,323,755		W	460,373		W	715,539		W	—		W	11,056,191
Intersegment net operating revenues (expenses)		25,355			—			536,562			561,917			(7,488	)		(235,620	)		(89,012	)		(81,132	)		246,054			(394,719	)		—

		3,464,434			3,049,593			327,436			6,841,463			963,255			1,070,615			1,234,743			379,241			961,593			(394,719	)		11,056,191

Net interest income		3,449,617			2,967,670			425,898			6,843,185			399,196			506,445			1,090,234			410,712			415,678			(3,950	)		9,661,500
Interest income		5,321,403			4,064,023			1,090,760			10,476,186			794,150			523,131			1,439,024			417,010			766,064			(38,494	)		14,377,071
Interest expense		(1,871,786	)		(1,096,353	)		(664,862	)		(3,633,001	)		(394,954	)		(16,686	)		(348,790	)		(6,298	)		(350,386	)		34,544			(4,715,571	)
Net fee and commission income (expenses)		290,182			199,940			336,218			826,340			665,765			(139,755	)		413,042			(24,489	)		868,680			(5,840	)		2,603,743
Fee and commission income		407,360			306,717			429,567			1,143,644			815,936			12,800			1,219,589			489			967,195			(243,367	)		3,916,286
Fee and commission expense		(117,178	)		(106,777	)		(93,349	)		(317,304	)		(150,171	)		(152,555	)		(806,547	)		(24,978	)		(98,515	)		237,527			(1,312,543	)
Net insurance income (expenses)		—			—			—			—			—			496,721			7,977			(87,652	)		—			(9,286	)		407,760
Insurance income		—			—			—			—			—			10,181,724			14,530			2,973,477			—			(26,941	)		13,142,790
Insurance expense		—			—			—			—			—			(9,685,003	)		(6,553	)		(3,061,129	)		—			17,655			(12,735,030	)
Net gains (losses) on financial instruments at fair value through profit or loss		84,157			—			(89,086	)		(4,929	)		(253,221	)		236,622			1,813			86,143			(185,828	)		(406,754	)		(526,154	)
Net other operating income (expenses)		(359,522	)		(118,017	)		(345,594	)		(823,133	)		151,515			(29,418	)		(278,323	)		(5,473	)		(136,937	)		31,111			(1,090,658	)

KB Financial Group Inc. and Subsidiaries

Notes to the Consolidated Interim Financial Statements

September 30, 2022 and 2021 (Unaudited), and December 31, 2021

5.1 Overall Segment Information and Business Segments (cont’d)


(In millions of Korean won)	2022
	Banking business
	Corporate banking			Retail banking			Other banking services			Sub-total			Securities			Non-life insurance			Credit card			Life insurance			Others			Consolidation adjustments			Total
General and administrative expenses	W	(1,387,989	)	W	(1,389,453	)	W	(413,320	)	W	(3,190,762	)	W	(601,717	)	W	(589,319	)	W	(422,306	)	W	(155,386	)	W	(315,708	)	W	95,059		W	(5,180,139	)
Operating income before provision for credit losses		2,076,445			1,660,140			(85,884	)		3,650,701			361,538			481,296			812,437			223,855			645,885			(299,660	)		5,876,052
Reversal (provision) of credit losses		(114,658	)		(174,171	)		(66,650	)		(355,479	)		(18,181	)		12,522			(326,897	)		251			(88,684	)		1,344			(775,124	)
Net operating income		1,961,787			1,485,969			(152,534	)		3,295,222			343,357			493,818			485,540			224,106			557,201			(298,316	)		5,100,928
Share of profit (loss) of associates and joint ventures		—			—			20,349			20,349			(3,633	)		489			1,527			—			(2,537	)		(30,276	)		(14,081	)
Net other non-operating income (expenses)		(12,991	)		—			11,717			(1,274	)		71,765			208,603			(3,357	)		2,156			19			48,390			326,302
Segment profit before income tax expense		1,948,796			1,485,969			(120,468	)		3,314,297			411,489			702,910			483,710			226,262			554,683			(280,202	)		5,413,149
Income tax expense		(452,268	)		(356,527	)		15,663			(793,132	)		(106,970	)		(181,646	)		(127,807	)		(70,475	)		(105,536	)		8,083			(1,377,483	)

Profit (loss) for the period	W	1,496,528		W	1,129,442		W	(104,805	)	W	2,521,165		W	304,519		W	521,264		W	355,903		W	155,787		W	449,147		W	(272,119	)	W	4,035,666

Profit (loss) attributable to shareholders of the Parent Company		1,476,193			1,129,442			(55,064	)		2,550,571			303,737			520,704			352,265			155,787			445,851			(300,980	)		4,027,935
Profit (loss) attributable to non-controlling interests		20,335			—			(49,741	)		(29,406	)		782			560			3,638			—			3,296			28,861			7,731
Total assets *		219,656,559			165,087,666			153,252,882			537,997,107			58,461,684			43,180,571			30,144,625			35,262,176			58,757,666			(36,861,847	)		726,941,982
Total liabilities *		209,574,768			187,984,804			107,100,601			504,660,173			52,407,835			39,951,180			25,433,509			33,761,358			24,862,381			(3,441,800	)		677,634,636

*	Assets and liabilities of the reporting segments are amounts before intersegment transactions.

KB Financial Group Inc. and Subsidiaries

Notes to the Consolidated Interim Financial Statements

September 30, 2022 and 2021 (Unaudited), and December 31, 2021

5.1 Overall Segment Information and Business Segments (cont’d)


(In millions of Korean won)	2021
	Banking business
	Corporate banking			Retail banking			Other banking services			Sub-total			Securities			Non-life insurance			Credit card			Life insurance			Others			Consolidation adjustments			Total
Net operating revenues from external customers	W	2,573,354		W	2,138,765		W	1,239,829		W	5,951,948		W	1,366,638		W	1,048,385		W	1,324,970		W	480,368		W	689,767		W	—		W	10,862,076
Intersegment net operating revenues (expenses)		51,213			—			214,013			265,226			10,671			(67,913	)		(118,981	)		(4,776	)		74,552			(158,779	)		—

		2,624,567			2,138,765			1,453,842			6,217,174			1,377,309			980,472			1,205,989			475,592			764,319			(158,779	)		10,862,076

Net interest income		2,800,092			2,580,609			278,725			5,659,426			420,063			465,471			1,032,595			385,162			295,011			(2,374	)		8,255,354
Interest income		3,877,175			3,241,388			664,601			7,783,164			610,237			471,294			1,311,200			387,337			595,885			(22,429	)		11,136,688
Interest expense		(1,077,083	)		(660,779	)		(385,876	)		(2,123,738	)		(190,174	)		(5,823	)		(278,605	)		(2,175	)		(300,874	)		20,055			(2,881,334	)
Net fee and commission income (expenses)		296,619			324,609			268,217			889,445			810,241			(128,276	)		398,055			(19,518	)		793,566			413			2,743,926
Fee and commission income		399,267			427,715			357,455			1,184,437			940,183			7,615			1,204,024			360			881,395			(226,928	)		3,991,086
Fee and commission expense		(102,648	)		(103,106	)		(89,238	)		(294,992	)		(129,942	)		(135,891	)		(805,969	)		(19,878	)		(87,829	)		227,341			(1,247,160	)
Net insurance income		—			—			—			—			—			435,490			8,818			22,165			—			(3,631	)		462,842
Insurance income		—			—			—			—			—			9,559,997			16,499			2,680,662			—			(23,001	)		12,234,157
Insurance expense		—			—			—			—			—			(9,124,507	)		(7,681	)		(2,658,497	)		—			19,370			(11,771,315	)
Net gains on financial instruments at fair value through profit or loss		34,452			—			244,959			279,411			131,993			242,972			1,521			111,299			62,177			(126,532	)		702,841
Net other operating income (expenses)		(506,596	)		(766,453	)		661,941			(611,108	)		15,012			(35,185	)		(235,000	)		(23,516	)		(386,435	)		(26,655	)		(1,302,887	)

KB Financial Group Inc. and Subsidiaries

Notes to the Consolidated Interim Financial Statements

September 30, 2022 and 2021 (Unaudited), and December 31, 2021

5.1 Overall Segment Information and Business Segments (cont’d)


(In millions of Korean won)	2021
	Banking business
	Corporate banking			Retail banking			Other banking services			Sub-total			Securities			Non-life insurance			Credit card			Life insurance			Others			Consolidation adjustments			Total
General and administrative expenses	W	(1,242,262	)	W	(1,421,889	)	W	(355,308	)	W	(3,019,459	)	W	(644,020	)	W	(621,543	)	W	(408,520	)	W	(143,527	)	W	(306,297	)	W	85,869		W	(5,057,497	)
Operating income before provision for credit losses		1,382,305			716,876			1,098,534			3,197,715			733,289			358,929			797,469			332,065			458,022			(72,910	)		5,804,579
Reversal (provision) of credit losses		(119,404	)		(69,304	)		(637	)		(189,345	)		(9,681	)		69			(284,765	)		2,749			(115,358	)		(171	)		(596,502	)
Net operating income		1,262,901			647,572			1,097,897			3,008,370			723,608			358,998			512,704			334,814			342,664			(73,081	)		5,208,077
Share of profit (loss) of associates and joint ventures		—			—			53,748			53,748			18,763			(33	)		825			—			1,253			19,218			93,774
Net other non-operating income (expenses)		(8,096	)		—			(48,309	)		(56,405	)		(142	)		6,574			(5,499	)		2,283			2,986			(15,226	)		(65,429	)
Segment profit before income tax expense		1,254,805			647,572			1,103,336			3,005,713			742,229			365,539			508,030			337,097			346,903			(69,089	)		5,236,422
Income tax expense		(333,241	)		(178,082	)		(294,815	)		(806,138	)		(199,011	)		(96,096	)		(132,656	)		(99,577	)		(114,804	)		10,111			(1,438,171	)

Profit for the period	W	921,564		W	469,490		W	808,521		W	2,199,575		W	543,218		W	269,443		W	375,374		W	237,520		W	232,099		W	(58,978	)	W	3,798,251

Profit attributable to shareholders of the Parent Company		921,326			469,490			809,504			2,200,320			543,287			269,184			374,116			237,520			230,295			(82,307	)		3,772,415
Profit (loss) attributable to non-controlling interests		238			—			(983	)		(745	)		(69	)		259			1,258			—			1,804			23,329			25,836
Total assets *		189,310,448			169,513,344			124,741,106			483,564,898			55,493,984			41,472,227			27,349,561			36,921,678			52,929,567			(33,836,081	)		663,895,834
Total liabilities *		197,834,530			180,815,013			72,026,442			450,675,985			50,008,422			37,328,955			22,793,919			34,166,882			23,191,051			(2,563,300	)		615,601,914

* Assets and liabilities of the reporting segments are amounts before intersegment transactions and as of December 31, 2021.

KB Financial Group Inc. and Subsidiaries

Notes to the Consolidated Interim Financial Statements

September 30, 2022 and 2021 (Unaudited), and December 31, 2021

5.2 Services and Geographical Segments

5.2.1 Services information

Net operating revenues from external customers by service for the nine-month periods ended September 30, 2022 and 2021, are as follows:


(In millions of Korean won)
	2022		2021
Banking service	W	6,279,546	W	5,951,948
Securities service		970,743		1,366,638
Non-life insurance service		1,306,235		1,048,385
Credit card service		1,323,755		1,324,970
Life insurance service		460,373		480,368
Others		715,539		689,767

	W	11,056,191	W	10,862,076

5.2.2 Geographical information

Geographical net operating revenues from external customers for the nine-month periods ended September 30, 2022 and 2021, and major non-current assets as of September 30, 2022 and December 31, 2021, are as follows:


(In millions of Korean won)
	Net operating revenues from external customers				Major non-current assets
	2022		2021		September 30, 2022		December 31, 2021
Domestic	W	10,152,631	W	10,175,888	W	9,177,020	W	9,853,970
United States		76,995		83,089		61,814		45,530
New Zealand		9,514		9,789		1,524		1,932
China		120,117		92,796		22,384		21,416
Cambodia		397,434		298,515		50,008		35,668
United Kingdom		21,045		17,854		6,852		86,361
Indonesia		186,936		114,361		491,951		437,088
Others		91,519		69,784		564,632		20,446
Consolidation adjustments		—		—		621,529		518,788

	W	11,056,191	W	10,862,076	W	10,997,714	W	11,021,199

KB Financial Group Inc. and Subsidiaries

Notes to the Consolidated Interim Financial Statements

September 30, 2022 and 2021 (Unaudited), and December 31, 2021

6. Financial Assets and Financial Liabilities

6.1 Classification and Fair Value of Financial Instruments

6.1.1 Carrying amount and fair value of financial assets and liabilities by category as of September 30, 2022 and December 31, 2021, are as follows:


(In millions of Korean won)	September 30, 2022
	Carrying amount		Fair value
Financial assets
Cash and due from financial institutions	W	27,496,770	W	27,445,380
Financial assets at fair value through profit or loss:		61,885,282		61,885,282
Due from financial institutions		90,339		90,339
Debt securities		59,039,214		59,039,214
Equity securities		2,421,719		2,421,719
Loans		235,606		235,606
Others		98,404		98,404
Derivatives held for trading		17,158,723		17,158,723
Derivatives held for hedging		661,288		661,288
Loans measured at amortized cost		456,863,042		453,151,195
Securities measured at amortized cost		54,718,627		50,152,996
Financial assets at fair value through other comprehensive income:		57,367,546		57,367,546
Debt securities		54,602,517		54,602,517
Equity securities		2,316,741		2,316,741
Loans		448,288		448,288
Other financial assets		20,101,038		20,101,038

	W	696,252,316	W	687,923,448

Financial liabilities
Financial liabilities at fair value through profit or loss	W	2,319,719	W	2,319,719
Financial liabilities designated at fair value through profit or loss		9,942,340		9,942,340
Derivatives held for trading		18,384,424		18,384,424
Derivatives held for hedging		674,309		674,309
Deposits		390,346,134		389,426,316
Borrowings		69,808,758		69,139,599
Debentures		72,363,288		70,515,429
Other financial liabilities		39,634,571		39,634,571

	W	603,473,543	W	600,036,707

KB Financial Group Inc. and Subsidiaries

Notes to the Consolidated Interim Financial Statements

September 30, 2022 and 2021 (Unaudited), and December 31, 2021

6.1.1 Carrying amount and fair value of financial assets and liabilities by category as of September 30, 2022 and December 31, 2021, are as follows: (cont’d)


(In millions of Korean won)	December 31, 2021
	Carrying amount		Fair value
Financial assets
Cash and due from financial institutions	W	31,009,374	W	31,081,231
Financial assets at fair value through profit or loss:		66,005,815		66,005,815
Due from financial institutions		200,742		200,742
Debt securities		63,002,692		63,002,692
Equity securities		2,419,463		2,419,463
Loans		269,296		269,296
Others		113,622		113,622
Derivatives held for trading		3,532,542		3,532,542
Derivatives held for hedging		188,828		188,828
Loans measured at amortized cost		417,900,273		417,775,260
Securities measured at amortized cost		44,471,628		44,392,419
Financial assets at fair value through other comprehensive income:		60,376,243		60,376,243
Debt securities		56,259,511		56,259,511
Equity securities		3,803,128		3,803,128
Loans		313,604		313,604
Other financial assets		10,755,350		10,755,350

	W	634,240,053	W	634,107,688

Financial liabilities
Financial liabilities at fair value through profit or loss	W	2,939,584	W	2,939,584
Financial liabilities designated at fair value through profit or loss		9,149,396		9,149,396
Derivatives held for trading		3,509,789		3,509,789
Derivatives held for hedging		172,469		172,469
Deposits		372,023,918		371,936,631
Borrowings		56,912,374		56,805,938
Debentures		67,430,188		67,288,409
Other financial liabilities		29,494,402		29,494,402

	W	541,632,120	W	541,296,618

Fair value is defined as the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants. The Group discloses the fair value of each class of assets and liabilities in a way that permits it to be compared with its carrying amount at the end of each reporting period. The best evidence of fair value of financial instruments is a quoted price in an active market.

KB Financial Group Inc. and Subsidiaries

Notes to the Consolidated Interim Financial Statements

September 30, 2022 and 2021 (Unaudited), and December 31, 2021

6.1.1 Carrying amount and fair value of financial assets and liabilities by category as of September 30, 2022 and December 31, 2021, are as follows: (cont’d)

Methods of determining fair value of financial instruments are as follows:


Cash and due from financial institutions		Fair value of cash is same as carrying amount. Carrying amount of demand deposit and settlement deposit is a reasonable approximation of fair value because these financial instruments do not have a fixed maturity and are receivable on demand. Fair value of general deposit is measured using Discounted Cash Flow (“DCF”) Model.

Securities		Fair value of securities and others that are traded in an active market is determined using the quoted prices. If there is no quoted price, fair value is determined using external professional valuation institutions. The institutions use one or more valuation techniques that are deemed appropriate considering the characteristics of the financial instruments among DCF Model, Free Cash Flow to Equity Model, Comparable Company Analysis, Dividend Discount Model, Risk Adjusted Discount Rate Method, and Net Asset Value Method.

Loans measured at amortized cost		Fair value of loans is determined using DCF Model discounting the expected cash flows, which are contractual cash flows adjusted by the expected prepayment rate, at an appropriate discount rate.

Derivatives and financial instruments at fair value through profit or loss		Fair value of exchange traded derivatives is determined using quoted price in an active market, and fair value of OTC derivatives is determined using valuation techniques. The Group uses internally developed valuation models that are widely used by market participants to determine fair value of plain vanilla OTC derivatives including options, interest rate swaps, and currency swaps, based on observable market parameters. However, some complex financial instruments are valued using appropriate models developed from generally accepted market valuation models including Finite Difference Method (“FDM”), MonteCarlo Simulation, Black-Scholes Model, Hull and White Model, Closed Form, and Tree Model or valuation results from independent external professional valuation institutions.

Deposits		Carrying amount of demand deposits is a reasonable approximation of fair value because they do not have a fixed maturity and are payable on demand. Fair value of time deposits is determined using DCF Model discounting the expected cash flows, which are contractual cash flows adjusted by the expected prepayment rate, at an appropriate discount rate.

Borrowings		Carrying amount of overdrafts in foreign currency is a reasonable approximation of fair value because they do not have a fixed maturity and are payable on demand. Fair value of other borrowings is determined using DCF Model.

Debentures		Fair value is determined using valuation results of external professional valuation institutions, which are calculated using market inputs.

Other financial assets and other financial liabilities		Carrying amount is a reasonable approximation of fair value because other financial assets and other financial liabilities are temporary accounts used for other various transactions and their maturities are relatively short or not defined.

KB Financial Group Inc. and Subsidiaries

Notes to the Consolidated Interim Financial Statements

September 30, 2022 and 2021 (Unaudited), and December 31, 2021

6.1.2 Fair value hierarchy

The Group believes that valuation techniques used for measuring the fair value of financial instruments are reasonable and that the fair value recognized in the consolidated statement of financial position is appropriate. However, the fair value of the financial instruments recognized in the consolidated statement of financial position may be different if other valuation techniques or assumptions are used. Additionally, as there are a variety of valuation techniques and assumptions used in measuring fair value, it may be difficult to reasonably compare the fair value with that of other financial institutions.

The Group classifies and discloses fair value of the financial instruments into the three fair value levels as follows:

Level 1: The fair values are based on quoted prices (unadjusted) in active markets for identical assets or liabilities that the entity can access at the measurement date.

Level 2: The fair values are based on inputs other than quoted prices included within Level 1 that are observable for the asset or liability, either directly or indirectly.

Level 3: The fair values are based on unobservable inputs for the asset or liability.

The fair value measurement is categorized in its entirety in the same level of the fair value hierarchy as the lowest level input that is significant to the entire measurement. If an observable input requires an adjustment using an unobservable input and that adjustment results in a significantly higher or lower fair value measurement, the resulting measurement would be categorized within Level 3 of the fair value hierarchy.

KB Financial Group Inc. and Subsidiaries

Notes to the Consolidated Interim Financial Statements

September 30, 2022 and 2021 (Unaudited), and December 31, 2021

6.1.2.1 Fair value hierarchy of financial assets and liabilities at fair value in the consolidated statements of financial position

Fair value hierarchy of financial assets and liabilities at fair value in the consolidated statements of financial position as of September 30, 2022 and December 31, 2021, are as follows:


(In millions of Korean won)	September 30, 2022
	Fair value hierarchy
	Level 1		Level 2		Level 3		Total
Financial assets
Financial assets at fair value through profit or loss:	W	12,615,885	W	33,438,312	W	15,831,085	W	61,885,282
Due from financial institutions		—		44,643		45,696		90,339
Debt securities		11,810,328		32,857,342		14,371,544		59,039,214
Equity securities		707,153		435,088		1,279,478		2,421,719
Loans		—		101,239		134,367		235,606
Others		98,404		—		—		98,404
Derivatives held for trading		262,330		16,725,101		171,292		17,158,723
Derivatives held for hedging		—		661,288		—		661,288
Financial assets at fair value through other comprehensive income:		18,885,554		36,909,534		1,572,458		57,367,546
Debt securities		18,366,508		36,236,009		—		54,602,517
Equity securities		519,046		225,237		1,572,458		2,316,741
Loans		—		448,288		—		448,288

	W	31,763,769	W	87,734,235	W	17,574,835	W	137,072,839

Financial liabilities
Financial liabilities at fair value through profit or loss	W	2,319,719	W	—	W	—	W	2,319,719
Financial liabilities designated at fair value through profit or loss		38,987		2,055,591		7,847,762		9,942,340
Derivatives held for trading		901,593		16,312,020		1,170,811		18,384,424
Derivatives held for hedging		—		674,309		—		674,309

	W	3,260,299	W	19,041,920	W	9,018,573	W	31,320,792

KB Financial Group Inc. and Subsidiaries

Notes to the Consolidated Interim Financial Statements

September 30, 2022 and 2021 (Unaudited), and December 31, 2021

6.1.2.1 Fair value hierarchy of financial assets and liabilities at fair value in the consolidated statements of financial position (cont’d)


(In millions of Korean won)	December 31, 2021
	Fair value hierarchy
	Level 1		Level 2		Level 3		Total
Financial assets
Financial assets at fair value through profit or loss:	W	13,108,985	W	40,205,783	W	12,691,047	W	66,005,815
Due from financial institutions		—		128,726		72,016		200,742
Debt securities		12,146,181		39,300,923		11,555,588		63,002,692
Equity securities		849,182		600,768		969,513		2,419,463
Loans		—		175,366		93,930		269,296
Others		113,622		—		—		113,622
Derivatives held for trading		81,408		3,241,129		210,005		3,532,542
Derivatives held for hedging		—		188,828		—		188,828
Financial assets at fair value through other comprehensive income:		20,027,158		38,900,548		1,448,537		60,376,243
Debt securities		17,706,456		38,553,055		—		56,259,511
Equity securities		2,320,702		47,859		1,434,567		3,803,128
Loans		—		299,634		13,970		313,604

	W	33,217,551	W	82,536,288	W	14,349,589	W	130,103,428

Financial liabilities
Financial liabilities at fair value through profit or loss	W	2,939,584	W	—	W	—	W	2,939,584
Financial liabilities designated at fair value through profit or loss		36,938		1,294,944		7,817,514		9,149,396
Derivatives held for trading		211,132		3,124,057		174,600		3,509,789
Derivatives held for hedging		—		172,469		—		172,469

	W	3,187,654	W	4,591,470	W	7,992,114	W	15,771,238

KB Financial Group Inc. and Subsidiaries

Notes to the Consolidated Interim Financial Statements

September 30, 2022 and 2021 (Unaudited), and December 31, 2021

6.1.2.1 Fair value hierarchy of financial assets and liabilities at fair value in the consolidated statements of financial position (cont’d)

Valuation techniques and inputs of financial assets and liabilities classified as Level 2 and measured at fair value in the consolidated statements of financial position as of September 30, 2022 and December 31, 2021, are as follows:


(In millions of Korean won)	September 30, 2022
	Fair value		Valuation techniques	Inputs
Financial assets
Financial assets at fair value through profit or loss:	W	33,438,312
Due from financial institutions		44,643	DCF Model, Hull and White Model	Projected cash flow, Discount rate, Volatility, Correlation coefficient
Debt securities		32,857,342	DCF Model, Hull and White Model, Closed Form, MonteCarlo Simulation, Black-Scholes Model, Net Asset Value Method, Binomial Model, and others	Projected cash flow, Fair value of underlying asset, Dividend yield, Price of underlying asset, Interest rate, Discount rate, Volatility, Correlation coefficient, and others
Equity securities		435,088	DCF Model	Interest rate, Discount rate, and others
Loans		101,239	DCF Model	Interest rate, Discount rate, and others
Derivatives held for trading		16,725,101	DCF Model, Closed Form, FDM, MonteCarlo Simulation, Black-Scholes Model, Hull and White Model, Binomial Model, and others	Interest rate, Price of underlying asset, Foreign exchange rate, Credit spread, Discount rate, Volatility, and others
Derivatives held for hedging		661,288	DCF Model, Closed Form, FDM	Projected cash flow, Discount rate, Forward foreign exchange rate, Volatility, Foreign exchange rate, and others
Financial assets at fair value through other comprehensive income:		36,909,534
Debt securities		36,236,009	DCF Model, Market Value Approach, Option Model	Underlying asset index, Interest rate, Discount rate, and others
Equity securities		225,237	DCF Model	Discount rate
Loans		448,288	DCF Model	Discount rate

	W	87,734,235

Financial liabilities
Financial liabilities designated at fair value through profit or loss	W	2,055,591	DCF Model, Closed Form, FDM, MonteCarlo Simulation, Black-Scholes Model, Hull and White Model, Binomial Model	Price of underlying asset, Interest rate, Dividend yield, Volatility, Discount rate
Derivatives held for trading		16,312,020	DCF Model, Closed Form, FDM, MonteCarlo Simulation, Black-Scholes Model, Hull and White Model, Binomial Model, and others	Interest rate, Price of underlying asset, Foreign exchange rate, Credit spread, Discount rate, Volatility, and others
Derivatives held for hedging		674,309	DCF Model, Closed Form, FDM	Projected cash flow, Discount rate, Forward foreign exchange rate, Volatility, Foreign exchange rate, and others

	W	19,041,920

KB Financial Group Inc. and Subsidiaries

Notes to the Consolidated Interim Financial Statements

September 30, 2022 and 2021 (Unaudited), and December 31, 2021

6.1.2.1 Fair value hierarchy of financial assets and liabilities at fair value in the consolidated statements of financial position (cont’d)


(In millions of Korean won)	December 31, 2021
	Fair value		Valuation techniques	Inputs
Financial assets
Financial assets at fair value through profit or loss:	W	40,205,783
Due from financial institutions		128,726	DCF Model, Hull and White Model	Projected cash flow, Discount rate, Volatility, Correlation coefficient
Debt securities		39,300,923	DCF Model, Hull and White Model, Closed Form, MonteCarlo Simulation, Black-Scholes Model, Net Asset Value Method, Binomial Model, and others	Projected cash flow, Fair value of underlying asset, Dividend yield, Price of underlying asset, Interest rate, Discount rate, Volatility, Correlation coefficient, and others
Equity securities		600,768	DCF Model	Interest rate, Discount rate, and others
Loans		175,366	DCF Model	Interest rate, Discount rate, and others
Derivatives held for trading		3,241,129	DCF Model, Closed Form, FDM, MonteCarlo Simulation, Black-Scholes Model, Hull and White Model, Binomial Model, and others	Interest rate, Price of underlying asset, Foreign exchange rate, Credit spread, Discount rate, Volatility, and others
Derivatives held for hedging		188,828	DCF Model, Closed Form, FDM	Projected cash flow, Discount rate, Forward foreign exchange rate, Volatility, Foreign exchange rate, and others
Financial assets at fair value through other comprehensive income:		38,900,548
Debt securities		38,553,055	DCF Model, Market Value Approach, Option Model	Underlying asset index, Interest rate, Discount rate, and others
Equity securities		47,859	DCF Model	Discount rate
Loans		299,634	DCF Model	Discount rate

	W	82,536,288

Financial liabilities
Financial liabilities designated at fair value through profit or loss	W	1,294,944	DCF Model, Closed Form, FDM, MonteCarlo Simulation, Black-Scholes Model, Hull and White Model, Binomial Model	Price of underlying asset, Interest rate, Dividend yield, Volatility, Discount rate
Derivatives held for trading		3,124,057	DCF Model, Closed Form, FDM, MonteCarlo Simulation, Black-Scholes Model, Hull and White Model, Binomial Model, and others	Interest rate, Price of underlying asset, Foreign exchange rate, Credit spread, Discount rate, Volatility, and others
Derivatives held for hedging		172,469	DCF Model, Closed Form, FDM	Projected cash flow, Discount rate, Forward foreign exchange rate, Volatility, Foreign exchange rate, and others

	W	4,591,470

KB Financial Group Inc. and Subsidiaries

Notes to the Consolidated Interim Financial Statements

September 30, 2022 and 2021 (Unaudited), and December 31, 2021

6.1.2.2 Fair value hierarchy of financial assets and liabilities whose fair value is disclosed

Fair value hierarchy of financial assets and liabilities whose fair value is disclosed as of September 30, 2022 and December 31, 2021, are as follows:


(In millions of Korean won)	September 30, 2022
	Fair value hierarchy						Total
	Level 1		Level 2		Level 3		Total
Financial assets
Cash and due from financial institutions¹	W	3,591,964	W	22,047,852	W	1,805,564	W	27,445,380
Loans measured at amortized cost		—		601,553		452,549,642		453,151,195
Securities measured at amortized cost²		19,622,738		30,509,406		20,852		50,152,996
Other financial assets²		—		—		20,101,038		20,101,038

	W	23,214,702	W	53,158,811	W	474,477,096	W	550,850,609

Financial liabilities
Deposits¹	W	—	W	184,176,914	W	205,249,402	W	389,426,316
Borrowings³		—		6,026,394		63,113,205		69,139,599
Debentures		—		63,544,019		6,971,410		70,515,429
Other financial liabilities²		—		—		39,634,571		39,634,571

	W	—	W	253,747,327	W	314,968,588	W	568,715,915


(In millions of Korean won)	December 31, 2021
	Fair value hierarchy						Total
	Level 1		Level 2		Level 3		Total
Financial assets
Cash and due from financial institutions¹	W	3,330,920	W	25,791,556	W	1,958,755	W	31,081,231
Loans measured at amortized cost		—		260,101		417,515,159		417,775,260
Securities measured at amortized cost²		18,263,895		26,125,391		3,133		44,392,419
Other financial assets²		—		—		10,755,350		10,755,350

	W	21,594,815	W	52,177,048	W	430,232,397	W	504,004,260

Financial liabilities
Deposits¹	W	—	W	204,299,174	W	167,637,457	W	371,936,631
Borrowings³		—		3,137,427		53,668,511		56,805,938
Debentures		—		60,824,743		6,463,666		67,288,409
Other financial liabilities²		—		—		29,494,402		29,494,402

	W	—	W	268,261,344	W	257,264,036	W	525,525,380

¹	The amounts included in Level 2 are the carrying amounts which are reasonable approximations of fair value.

²	The amounts included in Level 3 are the carrying amounts which are reasonable approximations of fair value.

³	Borrowings of W 164,488 million and W 2,143 million included in Level 2 are the carrying amounts which are reasonable approximations of fair value as of September 30, 2022 and December 31, 2021, respectively.

KB Financial Group Inc. and Subsidiaries

Notes to the Consolidated Interim Financial Statements

September 30, 2022 and 2021 (Unaudited), and December 31, 2021

6.1.2.2 Fair value hierarchy of financial assets and liabilities whose fair value is disclosed (cont’d)

For financial assets and liabilities whose carrying amount is a reasonable approximation of fair value, valuation techniques and inputs are not disclosed.

Valuation techniques and inputs of financial assets and liabilities classified as Level 2, and whose fair value is disclosed as of September 30, 2022 and December 31, 2021, are as follows:

(In millions of Korean won)

September 30, 2022

Fair value

Valuation techniques

Inputs

Financial assets

Loans measured at amortized cost

601,553

DCF Model

Discount rate

Securities measured at amortized cost

30,509,406

DCF Model,

MonteCarlo Simulation

Discount rate,
Interest rate

31,110,959

Financial liabilities

Borrowings

5,861,906

DCF Model

Discount rate

Debentures

63,544,019

DCF Model

Discount rate

69,405,925

(In millions of Korean won)

December 31, 2021

Fair value

Valuation techniques

Inputs

Financial assets

Loans measured at amortized cost

260,101

DCF Model

Discount rate

Securities measured at amortized cost

26,125,391

DCF Model,

MonteCarlo

Simulation

Discount rate,
Interest rate

26,385,492

Financial liabilities

Borrowings

3,135,284

DCF Model

Discount rate

Debentures

60,824,743

DCF Model

Discount rate

63,960,027

KB Financial Group Inc. and Subsidiaries

Notes to the Consolidated Interim Financial Statements

September 30, 2022 and 2021 (Unaudited), and December 31, 2021

6.1.2.2 Fair value hierarchy of financial assets and liabilities whose fair value is disclosed (cont’d)

Valuation techniques and inputs of financial assets and liabilities classified as Level 3, and whose fair value is disclosed as of September 30, 2022 and December 31, 2021, are as follows:


(In millions of Korean won)	September 30, 2022
	Fair value		Valuation techniques		Inputs
Financial assets
Cash and due from financial institutions	W	1,805,564		DCF Model	Credit spread, Other spread, Interest rate
Loans measured at amortized cost		452,549,642		DCF Model	Credit spread, Other spread, Prepayment rate, Interest rate

	W	454,355,206

Financial liabilities
Deposits	W	205,249,402		DCF Model	Other spread, Prepayment rate, Interest rate
Borrowings		63,113,205		DCF Model	Other spread, Interest rate
Debentures		6,971,410		DCF Model	Other spread, Interest rate

	W	275,334,017


(In millions of Korean won)	December 31, 2021
	Fair value		Valuation techniques		Inputs
Financial assets
Cash and due from financial institutions	W	1,958,755		DCF Model	Credit spread, Other spread, Interest rate
Loans measured at amortized cost		417,515,159		DCF Model	Credit spread, Other spread, Prepayment rate, Interest rate

	W	419,473,914

Financial liabilities
Deposits	W	167,637,457		DCF Model	Other spread, Prepayment rate, Interest rate
Borrowings		53,668,511		DCF Model	Other spread, Interest rate
Debentures		6,463,666		DCF Model	Other spread, Interest rate

	W	227,769,634

6.2 Disclosure of Fair Value Hierarchy Level 3

6.2.1 Valuation policy and process of Level 3 fair value

The Group uses external, independent and qualified valuation service in addition to internal valuation models to determine the fair value of financial instruments at the end of every reporting period.

If the changes in situation and events which cause transfers between the fair value hierarchy level for a financial asset or liability occur, the Group’s policy is to recognize such transfers as having occurred at the beginning of the reporting period.

KB Financial Group Inc. and Subsidiaries

Notes to the Consolidated Interim Financial Statements

September 30, 2022 and 2021 (Unaudited), and December 31, 2021

6.2.2 Changes in fair value (Level 3) measured using valuation technique based on unobservable inputs in the market

6.2.2.1 Changes in financial instruments classified as Level 3 of the fair value hierarchy for the nine-month periods ended September 30, 2022 and 2021, are as follows:

(In millions of Korean won)


	2022
	Financial assets at fair value through profit or loss									Financial investments					Financial liabilities at fair value through profit or loss			Net derivative financial instruments
	Due from financial institutions measured at fair value through profit or loss			Securities measured at fair value through profit or loss			Loans measured at fair value through profit or loss			Equity securities measured at fair value through other comprehensive income		Loans measured at fair value through other comprehensive income			Financial liabilities designated at fair value through profit or loss			Derivatives held for trading
Beginning	W	72,016		W	12,525,100		W	93,929		W	1,434,567	W	13,970		W	(7,817,514	)	W	35,405
Total gains or losses:
Profit or loss		834			518,609			(13,973	)		—		—			1,021,322			(987,946	)
Other comprehensive income (loss)		(6,246	)		(35,550	)		—			94,420		130			34,031			—
Purchases		11,689			3,807,618			65,082			43,471		—			—			17,141
Sales		(32,597	)		(1,062,930	)		(10,671	)		—		(14,100	)		—			(64,329	)
Issues		—			—			—			—		—			(3,456,549	)		(14,511	)
Settlements		—			(61,055	)		—			—		—			2,370,948			14,721
Transfers into Level 3 *		—			4,442			—			—		—			—			—
Transfers out of Level 3 *		—			(45,212	)		—			—		—			—			—

Ending	W	45,696		W	15,651,022		W	134,367		W	1,572,458	W	—		W	(7,847,762	)	W	(999,519	)

KB Financial Group Inc. and Subsidiaries

Notes to the Consolidated Interim Financial Statements

September 30, 2022 and 2021 (Unaudited), and December 31, 2021

6.2.2.1 Changes in financial instruments classified as Level 3 of the fair value hierarchy for the nine-month periods ended September 30, 2022 and 2021, are as follows: (cont’d)

(In millions of Korean won)


	2021
	Financial assets at fair value through profit or loss								Financial investments						Financial liabilities at fair value through profit or loss			Net derivative financial instruments
	Due from financial institutions measured at fair value through profit or loss		Securities measured at fair value through profit or loss			Loans measured at fair value through profit or loss			Equity securities measured at fair value through other comprehensive income			Loans measured at fair value through other comprehensive income			Financial liabilities designated at fair value through profit or loss			Derivatives held for trading
Beginning	W	90,083	W	11,099,923		W	38,756		W	2,419,908		W	27,983		W	(9,201,431	)	W	300,420
Total gains or losses:
Profit or loss		305		327,067			(415	)		—			—			83,149			(130,579	)
Other comprehensive income (loss)		5,004		169,075			—			(57,263	)		63			(17,998	)		—
Purchases		—		3,242,515			—			49,675			—			—			1,543
Sales		—		(1,993,933	)		—			(5,728	)		(10,200	)		—			(120,719	)
Issues		—		—			—			—			—			(5,977,969	)		(28,047	)
Settlements		—		—			—			—			—			7,975,941			—
Transfers into Level 3 *		—		4,122			—			—			—			—			(282	)
Transfers out of Level 3 *		—		(317,080	)		—			(952,449	)		—			—			—

Ending	W	95,392	W	12,531,689		W	38,341		W	1,454,143		W	17,846		W	(7,138,308	)	W	22,336

*	Transfers into or out of Level 3 of the fair value hierarchy occurred due to the change in the availability of observable market data.

KB Financial Group Inc. and Subsidiaries

Notes to the Consolidated Interim Financial Statements

September 30, 2022 and 2021 (Unaudited), and December 31, 2021

6.2.2.2 In relation to changes in financial instruments classified as Level 3 of the fair value hierarchy, total gains or losses recognized in profit or loss for the period, and total gains or losses recognized in profit or loss from financial instruments held at the end of the reporting period for the nine-month periods ended September 30, 2022 and 2021, are as follows:


(In millions of Korean won)	2022						2021
	Net gains on financial instruments at fair value through profit or loss		Other operating income		Net interest income		Net gains on financial instruments at fair value through profit or loss		Other operating income		Net interest income
Total gains (losses) recognized in profit or loss for the period	W	147,995	W	390,851	W	—	W	202,367	W	77,160	W	—
Total gains (losses) recognized in profit or loss from financial instruments held at the end of the reporting period		268,584		355,905		—		116,178		86,817		—

KB Financial Group Inc. and Subsidiaries

Notes to the Consolidated Interim Financial Statements

September 30, 2022 and 2021 (Unaudited), and December 31, 2021

6.2.3 Sensitivity analysis of changes in unobservable inputs

6.2.3.1 Information about fair value measurements using unobservable inputs as of September 30, 2022 and December 31, 2021, are as follows:

(In millions of Korean won)

September 30, 2022

Fair value

Valuation techniques

Unobservable inputs

Range of

unobservable
inputs (%)

Relationship of

unobservable inputs to fair
value

Financial assets

Financial assets at fair value through profit or loss:

Due from financial institutions

45,696

Hull and White Model

Interest rate

0.86

The lower the interest rate, the higher the fair value

Debt securities

14,371,544

DCF Model, Closed Form, FDM, MonteCarlo Simulation, Hull and White Model, Black-Scholes Model, Option Model, Binomial Model, Net Asset Value Method, Milestone Method, Income Approach, Market Value Approach, and others

Growth rate

1.00 ~ 3.00

The higher the growth rate, the higher the fair value

Volatility

0.59 ~ 46.84

The higher the volatility, the higher the fair value fluctuation

Discount rate

0.00 ~ 12.51

The lower the discount rate, the higher the fair value

Rate of stock price fluctuation

-10.00 ~ 10.00

The higher the price rate of stock, the higher the fair value

Correlation coefficient between underlying assets

-60.00 ~ 93.12

The higher the correlation coefficient, the higher the fair value fluctuation

Liquidation value

-1.00 ~ 7.06

The higher the liquidation value, the higher the fair value

Recovery rate

40.00

The higher the recovery rate, the higher the fair value

Rate of real estate price fluctuation

-1.00 ~ 1.00

The higher the sale price of real estate, the higher the fair value

Equity securities

1,279,478

Income Approach, Market Value Approach, Asset Value Approach, DCF Model, Comparable Company Analysis, Risk Adjusted Discount Rate Method, Dividend Discount Model, Usage of Past Transactions, Binomial Model, and others

Growth rate

0.00 ~ 4.00

The higher the growth rate, the higher the fair value

Discount rate

9.79 ~ 16.00

The lower the discount rate, the higher the fair value

Volatility

16.80 ~ 25.50

The higher the volatility, the higher the fair value fluctuation

Loans

134,367

DCF Model

Discount rate

8.52 ~ 9.27

The lower the discount rate, the higher the fair value

KB Financial Group Inc. and Subsidiaries

Notes to the Consolidated Interim Financial Statements

September 30, 2022 and 2021 (Unaudited), and December 31, 2021

6.2.3.1 Information about fair value measurements using unobservable inputs as of September 30, 2022 and December 31, 2021, are as follows: (cont’d)

(In millions of Korean won)

September 30, 2022

Fair value

Valuation techniques

Unobservable inputs

Range of
unobservable
inputs (%)

Relationship of

unobservable inputs to fair
value

Derivatives held for trading:

Stock and index

108,530

DCF Model, Closed Form, FDM, MonteCarlo Simulation, Hull and White Model, Black-Scholes Model, Binomial Model

Volatility of underlying asset

12.44 ~ 53.37

The higher the volatility, the higher the fair value fluctuation

Correlation coefficient

-60.00 ~ 80.43

The higher the correlation coefficient, the higher the fair value fluctuation

Currency, interest rate, and others

62,762

DCF Model, Hull and White Model, MonteCarlo Simulation, Closed Form

Volatility

7.89 ~ 34.46

The higher the volatility, the higher the fair value fluctuation

Financial assets at fair value through other comprehensive income:

Equity securities

1,572,458

Risk Adjusted Discount Rate Method, IMV Model, DCF Model, Comparable Company Analysis, Dividend Discount Model, Net Asset Value Method, Market Value Approach, Hull and White Model, and others

Growth rate

0.00 ~ 2.00

The higher the growth rate, the higher the fair value

Discount rate

6.34 ~ 16.73

The lower the discount rate, the higher the fair value

Volatility

8.14 ~ 29.56

The higher the volatility, the higher the fair value fluctuation

17,574,835

KB Financial Group Inc. and Subsidiaries

Notes to the Consolidated Interim Financial Statements

September 30, 2022 and 2021 (Unaudited), and December 31, 2021

6.2.3.1 Information about fair value measurements using unobservable inputs as of September 30, 2022 and December 31, 2021, are as follows: (cont’d)

(In millions of Korean won)

September 30, 2022

Fair value

Valuation techniques

Unobservable inputs

Range of
unobservable
inputs (%)

Relationship of

unobservable inputs to fair
value

Financial liabilities

Financial liabilities designated at fair value through profit or loss:

Derivative-linked securities

7,847,762

DCF Model, Closed Form, FDM, MonteCarlo Simulation, Hull and White Model, Black-Scholes Model

Volatility of underlying asset

1.00 ~ 111.88

The higher the volatility, the higher the fair value fluctuation

Correlation coefficient between underlying assets

-60.00 ~ 93.12

The higher the correlation coefficient, the higher the fair value fluctuation

Derivatives held for trading:

Stock and index

659,001

DCF Model, Closed Form, FDM, MonteCarlo Simulation, Hull and White Model, Black-Scholes Model, Binomial Model

Volatility of underlying asset

0.00 ~ 57.00

The higher the volatility, the higher the fair value fluctuation

Correlation coefficient between underlying assets

-60.00 ~ 80.43

The higher the correlation coefficient, the higher the fair value fluctuation

Others

511,810

DCF Model, Hull and White Model, MonteCarlo Simulation, Closed Form

Discount rate

3.07 ~ 4.84

The lower the discount rate, the higher the fair value

Volatility of underlying asset

7.89 ~ 111.88

The higher the volatility, the higher the fair value fluctuation

Correlation coefficient between underlying assets

-49.14 ~ 93.12

The higher the correlation coefficient, the higher the fair value fluctuation

9,018,573

KB Financial Group Inc. and Subsidiaries

Notes to the Consolidated Interim Financial Statements

September 30, 2022 and 2021 (Unaudited), and December 31, 2021

6.2.3.1 Information about fair value measurements using unobservable inputs as of September 30, 2022 and December 31, 2021, are as follows: (cont’d)

(In millions of Korean won)

December 31, 2021

Fair value

Valuation techniques

Unobservable inputs

Range of
unobservable
inputs (%)

Relationship of

unobservable inputs to fair

value

Financial assets

Financial assets at fair value through profit or loss:

Due from financial institutions

72,016

MonteCarlo Simulation, Hull and White Model

Volatility of underlying asset

14.30 ~ 39.66

The higher the volatility of underlying asset, the higher the fair value fluctuation

Correlation coefficient

-3.36

The higher the correlation coefficient, the higher the fair value fluctuation

Debt securities

11,555,588

Growth rate

0.00 ~ 2.00

The higher the growth rate, the higher the fair value

Volatility

13.87 ~ 58.39

The higher the volatility, the higher the fair value fluctuation

Discount rate

0.60 ~ 21.37

The lower the discount rate, the higher the fair value

Stock price

18.87 ~ 19.48

The higher the stock price, the higher the fair value

Correlation coefficient between underlying assets

-60.35 ~ 100.00

The higher the correlation coefficient, the higher the fair value fluctuation

Liquidation value

-1.00 ~ 1.00

The higher the liquidation value, the higher the fair value

Recovery rate

40.00

The higher the recovery rate, the higher the fair value

Rate of real estate price fluctuation

-1.00 ~ 1.00

The higher the sale price of real estate, the higher the fair value

Equity securities

969,513

Growth rate

0.50 ~ 2.00

The higher the growth rate, the higher the fair value

Discount rate

8.80 ~ 24.60

The lower the discount rate, the higher the fair value

Stock price

23.36 ~ 25.49

The higher the stock price, the higher the fair value

Loans

93,930

DCF Model

Discount rate

8.21

The lower the discount rate, the higher the fair value

KB Financial Group Inc. and Subsidiaries

Notes to the Consolidated Interim Financial Statements

September 30, 2022 and 2021 (Unaudited), and December 31, 2021

6.2.3.1 Information about fair value measurements using unobservable inputs as of September 30, 2022 and December 31, 2021, are as follows: (cont’d)

(In millions of Korean won)

December 31, 2021

Fair value

Valuation techniques

Unobservable inputs

Range of
unobservable
inputs (%)

Relationship of

unobservable inputs to fair

value

Derivatives held for trading:

Stock and index

184,165

DCF Model, Closed Form, FDM, MonteCarlo Simulation, Hull and White Model, Black-Scholes Model, Binomial Model

Volatility of underlying asset

15.07 ~ 80.58

The higher the volatility, the higher the fair value fluctuation

Correlation coefficient

-60.35 ~ 88.17

The higher the correlation coefficient, the higher the fair value fluctuation

Stock price

-10.00 ~ 10.00

The higher the stock price, the higher the fair value

Currency, interest rate, and others

25,840

DCF Model, Hull and White Model, MonteCarlo Simulation, Closed Form

Volatility

2.67 ~ 81.32

The higher the volatility, the higher the fair value fluctuation

Correlation coefficient

-48.31 ~ 90.16

The higher the correlation coefficient, the higher the fair value fluctuation

Financial assets at fair value through other comprehensive income:

Equity securities

1,434,567

Risk Adjusted Discount Rate Method, IMV Model, DCF Model, Comparable Company Analysis, Dividend Discount Model, Net Asset Value Method, Market Value Approach, Hull and White Model, and others

Growth rate

0.00 ~ 2.00

The higher the growth rate, the higher the fair value

Discount rate

8.80 ~ 18.02

The lower the discount rate, the higher the fair value

Volatility

23.36 ~ 31.65

The higher the volatility, the higher the fair value fluctuation

Loans

13,970

DCF Model

Discount rate

2.87 ~ 4.87

The lower the discount rate, the higher the fair value

14,349,589

KB Financial Group Inc. and Subsidiaries

Notes to the Consolidated Interim Financial Statements

September 30, 2022 and 2021 (Unaudited), and December 31, 2021

6.2.3.1 Information about fair value measurements using unobservable inputs as of September 30, 2022 and December 31, 2021, are as follows: (cont’d)

(In millions of Korean won)

December 31, 2021

Fair value

Valuation techniques

Unobservable inputs

Range of
unobservable
inputs (%)

Relationship of

unobservable inputs to fair

value

Financial liabilities

Financial liabilities designated at fair value through profit or loss:

Derivative-linked securities

7,817,514

DCF Model, Closed Form, FDM, MonteCarlo Simulation, Hull and White Model, Black-Scholes Model

Volatility of underlying asset

1.00 ~ 81.32

The higher the volatility, the higher the fair value fluctuation

Correlation coefficient between underlying assets

-60.35 ~ 90.16

The higher the correlation coefficient, the higher the fair value fluctuation

Derivatives held for trading:

Stock and index

92,757

DCF Model, Closed Form, FDM, MonteCarlo Simulation, Hull and White Model, Black-Scholes Model, Binomial Model

Volatility of underlying asset

15.07 ~ 80.58

The higher the volatility, the higher the fair value fluctuation

Correlation coefficient between underlying assets

-60.35 ~ 88.17

The higher the correlation coefficient, the higher the fair value fluctuation

Others

81,843

DCF Model, Hull and White Model, MonteCarlo Simulation, Closed Form

Discount rate

1.46 ~ 2.83

The lower the discount rate, the higher the fair value

Volatility of underlying asset

5.29 ~ 53.57

The higher the volatility, the higher the fair value fluctuation

Correlation coefficient between underlying assets

-48.31 ~ 90.16

The higher the correlation coefficient, the higher the fair value fluctuation

7,992,114

KB Financial Group Inc. and Subsidiaries

Notes to the Consolidated Interim Financial Statements

September 30, 2022 and 2021 (Unaudited), and December 31, 2021

6.2.3.2 Sensitivity analysis of changes in unobservable inputs

Sensitivity analysis of financial instruments is performed to measure favorable and unfavorable changes in fair value of financial instruments which are affected by unobservable parameters, using a statistical technique. When the fair value is affected by more than one input parameter, the amounts represent the most favorable or most unfavorable outcome. Level 3 financial instruments subject to sensitivity analysis are (a) equity-related derivatives, currency-related derivatives, and interest rate related derivatives whose fair value changes are recognized in profit or loss, (b) financial liabilities designated at fair value through profit or loss, and (c) due from financial institutions, debt securities (including beneficiary certificates), equity securities, and loans whose fair value changes are recognized in profit or loss or other comprehensive income or loss. If the overlay approach is applied in accordance with Korean IFRS No.1104, changes in fair value of financial assets at fair value through profit or loss are recognized in other comprehensive income.

Results of the sensitivity analysis of changes in unobservable inputs as of September 30, 2022 and December 31, 2021, are as follows:


(In millions of Korean won)	September 30, 2022
	Profit or loss					Other comprehensive income or loss
	Favorable changes		Unfavorable changes			Favorable changes		Unfavorable changes
Financial assets
Financial assets at fair value through profit or loss: ¹
Due from financial institutions	W	—	W	—		W	263	W	(284	)
Debt securities ⁴		20,681		(20,725	)		1,982		(1,961	)
Equity securities ³		23,808		(13,640	)		—		—
Loans ⁵		17,060		(15,922	)		—		—
Derivatives held for trading ²		14,172		(16,143	)		—		—
Financial assets at fair value through other comprehensive income:
Equity securities ³		—		—			198,143		(91,887	)

	W	75,721	W	(66,430	)	W	200,388	W	(94,132	)

Financial liabilities
Financial liabilities designated at fair value through profit or loss ¹	W	110,532	W	(120,497	)	W	—	W	—
Derivatives held for trading ²		68,179		(65,316	)		—		—

	W	178,711	W	(185,813	)	W	—	W	—

KB Financial Group Inc. and Subsidiaries

Notes to the Consolidated Interim Financial Statements

September 30, 2022 and 2021 (Unaudited), and December 31, 2021

6.2.3.2 Sensitivity analysis of changes in unobservable inputs (cont’d)


(In millions of Korean won)	December 31, 2021
	Profit or loss					Other comprehensive income or loss
	Favorable changes		Unfavorable changes			Favorable changes		Unfavorable changes
Financial assets
Financial assets at fair value through profit or loss: ¹
Due from financial institutions	W	—	W	—		W	19	W	(18	)
Debt securities ⁴		13,149		(12,562	)		1,458		(1,402	)
Equity securities ³		11,259		(8,192	)		1,049		(813	)
Loans ⁵		3,062		(2,742	)		—		—
Derivatives held for trading ²		19,328		(20,005	)		—		—
Financial assets at fair value through other comprehensive income:
Equity securities ³		—		—			102,094		(76,316	)
Loans ⁶		—		—			133		(131	)

	W	46,798	W	(43,501	)	W	104,753	W	(78,680	)

Financial liabilities
Financial liabilities designated at fair value through profit or loss ¹	W	78,355	W	(82,797	)	W	—	W	—
Derivatives held for trading ²		31,310		(29,309	)		—		—

	W	109,665	W	(112,106	)	W	—	W	—

For financial instruments at fair value through profit or loss, changes in fair value are calculated by shifting principal unobservable input parameters such as discount rate, recovery rate, liquidation value by ±1%p and volatility of underlying asset, growth rate by ±1%p or ±10% and correlation coefficient by ±10%.

²	For derivative financial instruments, changes in fair value are calculated by shifting principal unobservable input parameters such as price of underlying asset and volatility by ±10%.

³	For equity securities, changes in fair value are calculated by shifting principal unobservable input parameters such as discount rate (-1%p~1%p) and growth rate (-1%p~1%p).

⁴

For beneficiary certificates, it is practically impossible to analyze sensitivity of changes in unobservable inputs. However, for beneficiary certificates whose underlying assets are real estates, changes in fair value are calculated by shifting rate of real estate price fluctuation by -1%p~1%p, and for beneficiary certificates whose underlying assets are equity investments, changes in fair value are calculated by shifting principal unobservable input parameters such as liquidation value by -1%p~1%p and discount rate by -1%p~1%p. There is no significant correlation among major unobservable inputs.

⁵	For loans, changes in fair value are calculated by shifting principal unobservable input parameters such as discount rate by -1%p~1%p.

⁶	For loans measured at fair value through other comprehensive income, changes in fair value are calculated by shifting principal unobservable input parameters such as discount rate by -1%p~1%p.

KB Financial Group Inc. and Subsidiaries

Notes to the Consolidated Interim Financial Statements

September 30, 2022 and 2021 (Unaudited), and December 31, 2021

6.2.4 Day one gains or losses

When the Group measures the fair value of OTC derivatives using inputs that are not based on observable market data, there could be a difference between the transaction price and the amount determined using that valuation technique. In these circumstances, the fair value of financial instruments is recognized as the transaction price, and the difference is not recognized in profit or loss but deferred and amortized using the straight-line method over the life of the financial instrument. When the fair value of the financial instruments is subsequently determined using observable market inputs, the remaining deferred amount is recognized in profit or loss.

Changes in deferred day one gains or losses for the nine-month periods ended September 30, 2022 and 2021, are as follows:


(In millions of Korean won)	2022			2021
Balance at the beginning of the period	W	77,208		W	61,393
New transactions		120,899			120,034
Changes during the period		(90,874	)		(135,773	)

Balance at the end of the period	W	107,233		W	45,654

KB Financial Group Inc. and Subsidiaries

Notes to the Consolidated Interim Financial Statements

September 30, 2022 and 2021 (Unaudited), and December 31, 2021

6.3 Carrying Amount of Financial Instruments by Category

Financial assets and liabilities are measured at fair value or amortized cost. Carrying amount of financial assets and liabilities by category as of September 30, 2022 and December 31, 2021, are as follows:

(In millions of Korean won)


	September 30, 2022

	Financial instruments at fair value through profit or loss		Financial instruments at fair value through other comprehensive income		Financial instruments designated at fair value through other comprehensive income		Financial instruments at amortized cost		Derivatives held for hedging		Total

Financial assets
Cash and due from financial institutions	W	—	W	—	W	—	W	27,496,770	W	—	W	27,496,770
Financial assets at fair value through profit or loss		61,885,282		—		—		—		—		61,885,282
Derivative financial assets		17,158,723		—		—		—		661,288		17,820,011
Loans measured at amortized cost		—		—		—		456,863,042		—		456,863,042
Financial investments		—		55,050,805		2,316,741		54,718,627		—		112,086,173
Other financial assets		—		—		—		20,101,038		—		20,101,038

	W	79,044,005	W	55,050,805	W	2,316,741	W	559,179,477	W	661,288	W	696,252,316

(In millions of Korean won)


	September 30, 2022

	Financial instruments at fair value through profit or loss		Financial instruments designated at fair value through profit or loss		Financial instruments at amortized cost		Derivatives held for hedging		Total
Financial liabilities
Financial liabilities at fair value through profit or loss	W	2,319,719	W	9,942,340	W	—	W	—	W	12,262,059
Derivative financial liabilities		18,384,424		—		—		674,309		19,058,733
Deposits		—		—		390,346,134		—		390,346,134
Borrowings		—		—		69,808,758		—		69,808,758
Debentures		—		—		72,363,288		—		72,363,288
Other financial liabilities		—		—		39,634,571		—		39,634,571

	W	20,704,143	W	9,942,340	W	572,152,751	W	674,309	W	603,473,543

KB Financial Group Inc. and Subsidiaries

Notes to the Consolidated Interim Financial Statements

September 30, 2022 and 2021 (Unaudited), and December 31, 2021

6.3 Carrying Amount of Financial Instruments by Category (cont’d)

(In millions of Korean won)


	December 31, 2021

	Financial instruments at fair value through profit or loss		Financial instruments at fair value through other comprehensive income		Financial instruments designated at fair value through other comprehensive income		Financial instruments at amortized cost		Derivatives held for hedging		Total
Financial assets
Cash and due from financial institutions	W	—	W	—	W	—	W	31,009,374	W	—	W	31,009,374
Financial assets at fair value through profit or loss		66,005,815		—		—		—		—		66,005,815
Derivative financial assets		3,532,542		—		—		—		188,828		3,721,370
Loans measured at amortized cost		—		—		—		417,900,273		—		417,900,273
Financial investments		—		56,573,115		3,803,128		44,471,628		—		104,847,871
Other financial assets		—		—		—		10,755,350		—		10,755,350

	W	69,538,357	W	56,573,115	W	3,803,128	W	504,136,625	W	188,828	W	634,240,053

(In millions of Korean won)


	December 31, 2021

	Financial instruments at fair value through profit or loss		Financial instruments designated at fair value through profit or loss		Financial instruments at amortized cost		Derivatives held for hedging		Total
Financial liabilities
Financial liabilities at fair value through profit or loss	W	2,939,584	W	9,149,396	W	—	W	—	W	12,088,980
Derivative financial liabilities		3,509,789		—		—		172,469		3,682,258
Deposits		—		—		372,023,918		—		372,023,918
Borrowings		—		—		56,912,374		—		56,912,374
Debentures		—		—		67,430,188		—		67,430,188
Other financial liabilities		—		—		29,494,402		—		29,494,402

	W	6,449,373	W	9,149,396	W	525,860,882	W	172,469	W	541,632,120

KB Financial Group Inc. and Subsidiaries

Notes to the Consolidated Interim Financial Statements

September 30, 2022 and 2021 (Unaudited), and December 31, 2021

7. Due from Financial Institutions Measured at Amortized Cost

7.1 Details of due from financial institutions as of September 30, 2022 and December 31, 2021, are as follows:

(In millions of Korean won)

Financial institutions

Interest rate (%)
as of
September 30,
2022

September 30,
2022

December 31,

2021

Due from financial institutions in Korean won

Due from the Bank of Korea

The Bank of Korea

—

10,535,757

W15,317,033

Due from banks

Hana Bank and others

0.00 ~ 4.12

3,306,732

3,390,521

Due from others

NH Investment & Securities Co., Ltd. and others

0.00 ~ 3.48

406,482

686,236

14,248,971

19,393,790

Due from financial institutions in foreign currencies

Due from banks in foreign currencies

The Bank of Korea and others

0.00 ~ 4.00

6,164,851

6,329,310

Time deposits in foreign currencies

Industrial and Commercial Bank of China and others

0.00 ~ 6.80

562,873

587,782

Due from others

Societe Generale (Paris) and others

0.00 ~ 6.60

3,384,728

2,054,474

10,112,452

8,971,566

24,361,423

W28,365,356

* Before netting of allowance

7.2 Details of restricted due from financial institutions as of September 30, 2022 and December 31, 2021, are as follows:

(In millions of Korean won)

Financial institutions

September 30,
2022

December 31,
2021

Reasons of

restriction

Due from financial institutions in Korean won

Due from the Bank of Korea

The Bank of Korea

W10,535,757

15,317,033

Bank of Korea Act

Due from banks

Shinhan Bank and others

565,184

803,445

Net settlement and others

Due from others

NH Investment & Securities Co., Ltd. and others

354,013

528,642

Derivatives margin account and others

11,454,954

16,649,120

Due from financial institutions in foreign currencies

Due from banks in foreign currencies

Bank of Indonesia and others

2,032,846

2,262,610

Indonesian law and others

Time deposits in foreign currencies

Agricultural Bank of China and others

81,723

68,588

Bank Act of the State of New York and others

Due from others

Societe Generale (Paris) and others

2,946,580

1,774,388

Derivatives margin account and others

5,061,149

4,105,586

16,516,103

20,754,706

* Before netting of allowance

KB Financial Group Inc. and Subsidiaries

Notes to the Consolidated Interim Financial Statements

September 30, 2022 and 2021 (Unaudited), and December 31, 2021

7.3 Changes in allowances for credit losses of due from financial institutions for the nine-month periods ended September 30, 2022 and 2021, are as follows:


(In millions of Korean won)	2022
	12-month expected credit losses			Lifetime expected credit losses
	12-month expected credit losses			Non-impaired			Impaired
Beginning	W	2,969		W	—		W	—
Transfer between stages:
Transfer to 12-month expected credit losses		—			—			—
Transfer to lifetime expected credit losses		—			—			—
Impairment		—			—			—
Provision for credit losses		402			—			—
Others		169			—			—

Ending	W	3,540		W	—		W	—


(In millions of Korean won)	2021
	12-month expected credit losses			Lifetime expected credit losses
	12-month expected credit losses			Non-impaired			Impaired
Beginning	W	2,947		W	34		W	282
Transfer between stages:
Transfer to 12-month expected credit losses		—			—			—
Transfer to lifetime expected credit losses		—			—			—
Impairment		—			—			—
Reversal of credit losses		(514	)		(3	)		(282	)
Others		57			2			—

Ending	W	2,490		W	33		W	—

8. Derivative Financial Instruments and Hedge Accounting

The Group’s derivative operations focus on addressing the needs of the Group’s corporate clients to hedge their risk exposure and hedging the Group’s risk exposure that results from such client contracts. The Group also engages in derivative trading activities to hedge the interest rate risk and currency risk arising from the Group’s own assets and liabilities. In addition, the Group engages in proprietary trading of derivatives within the predetermined transaction limit.

The Group provides and trades a range of derivative financial instruments, including:

•

Interest rate swaps relating to interest rate risk in Korean won

•

Cross-currency swaps, forwards, and options relating to currency risk

•

Stock index options linked with the Korea Composite Stock Price Index (“KOSPI”)

KB Financial Group Inc. and Subsidiaries

Notes to the Consolidated Interim Financial Statements

September 30, 2022 and 2021 (Unaudited), and December 31, 2021

8. Derivative Financial Instruments and Hedge Accounting (cont’d)

In particular, the Group applies fair value hedge accounting using interest rate swaps, currency forwards, and others to hedge the risk of changes in fair value due to the changes in interest rate and foreign exchange rate of structured debentures in Korean won, debentures in foreign currencies, structured deposits in foreign currencies, and others. The Group applies cash flow hedge accounting using interest rate swaps, currency swaps, and others to hedge the risk of changes in cash flows of floating rate debt securities in Korean won, borrowings in foreign currencies, group of loans measured at amortized cost, and others. In addition, the Group applies net investments in foreign operations hedge accounting by designating debentures in foreign currencies and cross currency forwards as hedging instruments to hedge the currency risk of net investments in foreign operations.

8.1 Details of derivative financial instruments held for trading as of September 30, 2022 and December 31, 2021, are as follows:

(In millions of Korean won)


	September 30, 2022						December 31, 2021
	Notional amount		Assets		Liabilities		Notional amount		Assets		Liabilities
Interest rate
Forwards	W	7,230,857	W	909,988	W	456,157	W	4,037,717	W	140,126	W	126,610
Futures *		4,906,385		16,255		1,111		6,479,692		1,903		2,464
Swaps		403,176,918		1,029,596		905,479		334,721,395		354,686		397,046
Options		10,700,000		322,627		312,162		12,547,000		176,274		199,567

		426,014,160		2,278,466		1,674,909		357,785,804		672,989		725,687

Currency
Forwards		137,639,888		7,294,595		4,856,757		105,509,405		1,296,083		934,944
Futures *		358,202		2,882		755		361,791		464		877
Swaps		101,759,877		6,883,821		9,771,151		65,028,025		1,082,873		1,331,597
Options		2,357,189		67,985		20,065		1,885,064		7,643		11,044

		242,115,156		14,249,283		14,648,728		172,784,285		2,387,063		2,278,462

Stock and index
Futures *		2,136,298		122,675		63,080		1,612,965		14,338		6,530
Swaps		6,448,893		341,059		795,914		5,207,198		322,888		132,619
Options		6,942,679		80,126		844,909		7,617,703		95,338		241,371

		15,527,870		543,860		1,703,903		14,437,866		432,564		380,520

Credit
Swaps		5,113,496		46,879		27,018		2,602,382		18,979		7,409

		5,113,496		46,879		27,018		2,602,382		18,979		7,409

Commodity
Futures *		20,174		1,362		164		6,370		43		82

		20,174		1,362		164		6,370		43		82

Others		1,895,512		38,873		329,702		1,695,540		20,904		117,629

	W	690,686,368	W	17,158,723	W	18,384,424	W	549,312,247	W	3,532,542	W	3,509,789

*	Gains or losses arising from some daily mark-to-market futures are reflected in the margin accounts.

KB Financial Group Inc. and Subsidiaries

Notes to the Consolidated Interim Financial Statements

September 30, 2022 and 2021 (Unaudited), and December 31, 2021

8.2 Average price conditions of future nominal cash flows by type of hedge accounting as of September 30, 2022 and December 31, 2021, are as follows:

(In millions of Korean won)


	September 30, 2022
	1 year		2 years		3 years		4 years		5 years		Over 5 years		Total
Fair value hedge
Nominal amount of the hedging instrument	W	4,278,160	W	4,433,337	W	2,973,807	W	1,816,442	W	651,618	W	2,255,097	W	16,408,461
Average price condition (%)		2.98		3.13		3.51		3.38		3.47		3.49		3.28
Average price condition (USD/KRW)		1,183.18		1,233.79		1,239.46		—		—		—		1,210.93
Average price condition (EUR/KRW)		1,361.93		1,363.74		1,397.80		1,441.86		1,448.14		—		1,386.64
Average price condition (AUD/KRW)		893.25		895.48		—		—		—		—		894.09
Average price condition (GBP/KRW)		1,558.51		—		1,620.05		—		—		—		1,561.43
Cash flow hedge
Nominal amount of the hedging instrument	W	4,241,790	W	1,253,797	W	1,372,504	W	1,044,011	W	1,182,533	W	210,000	W	9,304,635
Average price condition (%)		2.43		1.82		2.26		3.65		3.54		3.89		2.65
Average price condition (USD/KRW)		1,166.20		1,177.57		1,194.57		1,133.27		1,246.80		—		1,173.61
Average price condition (EUR/KRW)		1,321.00		1,364.00		1,370.12		—		—		—		1,362.51
Average price condition (AUD/KRW)		—		856.40		851.50		—		—		—		853.40
Average price condition (SGD/KRW)		—		866.14		—		—		—		—		866.14
Hedge of net investments in foreign operations
Nominal amount of the hedging instrument	W	73,605	W	28,771	W	—	W	—	W	—	W	—	W	102,376
Average price condition (USD/KRW)		1,071.00		—		—		—		—		—		1,071.00
Average price condition (GBP/KRW)		—		1,465.26		—		—		—		—		1,465.26

KB Financial Group Inc. and Subsidiaries

Notes to the Consolidated Interim Financial Statements

September 30, 2022 and 2021 (Unaudited), and December 31, 2021

8.2 Average price conditions of future nominal cash flows by type of hedge accounting as of September 30, 2022 and December 31, 2021, are as follows: (cont’d)

(In millions of Korean won)


	December 31, 2021
	1 year		2 years		3 years		4 years		5 years		Over 5 years		Total
Fair value hedge
Nominal amount of the hedging instrument	W	2,223,113	W	1,423,760	W	967,376	W	2,153,200	W	1,428,673	W	2,419,230	W	10,615,352
Average price condition (%)		0.94		1.23		1.04		1.16		1.06		1.39		1.18
Average price condition (USD/KRW)		1,144.74		1,154.78		1,169.72		—		—		—		1,150.30
Average price condition (EUR/KRW)		1,359.59		1,363.95		1,394.84		—		1,458.92		—		1,409.23
Average price condition (AUD/KRW)		859.41		—		—		—		—		—		859.41
Average price condition (GBP/KRW)		1,554.65		—		—		1,620.05		—		—		1,557.47
Cash flow hedge
Nominal amount of the hedging instrument	W	4,150,546	W	1,763,372	W	322,735	W	641,733	W	580,128	W	150,000	W	7,608,514
Average price condition (%)		1.01		1.51		2.06		1.87		1.84		2.12		1.21
Average price condition (USD/KRW)		1,159.92		1,178.13		1,145.05		1,139.40		1,123.13		—		1,152.89
Average price condition (EUR/KRW)		1,312.75		1,321.00		1,364.00		1,374.73		—		—		1,351.76
Average price condition (AUD/KRW)		—		—		856.40		851.50		—		—		853.40
Average price condition (SGD/KRW)		—		866.14		—		—		—		—		866.14
Hedge of net investments in foreign operations
Nominal amount of the hedging instrument	W	91,636	W	—	W	—	W	—	W	—	W	—	W	91,636
Average price condition (USD/KRW)		1,071.00		—		—		—		—		—		1,071.00
Average price condition (GBP/KRW)		1,465.26		—		—		—		—		—		1,465.26

KB Financial Group Inc. and Subsidiaries

Notes to the Consolidated Interim Financial Statements

September 30, 2022 and 2021 (Unaudited), and December 31, 2021

8.3 Fair Value Hedge

8.3.1 Details of fair value hedged items as of September 30, 2022 and December 31, 2021 and changes in fair value for the nine-month periods ended September 30, 2022 and 2021, are as follows:


(In millions of Korean won)		September 30, 2022										2022
		Carrying amount				Accumulated amount of hedge adjustments						Changes in fair value
		Assets		Liabilities		Assets			Liabilities			Changes in fair value
Hedge accounting
Interest rate	Debt securities in Korean won	W	2,313,916	W	—	W	(150,633	)	W	—		W	(129,945	)
	Debt securities in foreign currencies		3,678,559		—		(287,443	)		—			(261,856	)
	Deposits in foreign currencies		—		54,333		—			(11,289	)		9,673
	Debentures in Korean won		—		6,100,372		—			(309,628	)		230,051
	Debentures in foreign currencies		—		1,308,955		—			(111,497	)		139,450

			5,992,475		7,463,660		(438,076	)		(432,414	)		(12,627	)

Currency	Debt securities in foreign currencies		2,254,731		—		311,202			—			312,335
Currency
			2,254,731		—		311,202			—			312,335

		W	8,247,206	W	7,463,660	W	(126,874	)	W	(432,414	)	W	299,708


(In millions of Korean won)		December 31, 2021										2021
		Carrying amount				Accumulated amount of hedge adjustments						Changes in fair value
		Assets		Liabilities		Assets			Liabilities			Changes in fair value
Hedge accounting
Interest rate	Debt securities in Korean won	W	1,627,228	W	—	W	(20,272	)	W	—		W	(28,717	)
	Debt securities in foreign currencies		3,567,662		—		(22,384	)		—			(46,649	)
	Deposits in foreign currencies		—		93,521		—			(1,319	)		2,217
	Debentures in Korean won		—		2,470,123		—			(79,877	)		79,416
	Debentures in foreign currencies		—		1,154,178		—			27,953			39,440

			5,194,890		3,717,822		(42,656	)		(53,243	)		45,707

Currency	Debt securities in foreign currencies		2,443,893		—		133,268			—			173,690
Currency
			2,443,893		—		133,268			—			173,690

		W	7,638,783	W	3,717,822	W	90,612		W	(53,243	)	W	219,397

KB Financial Group Inc. and Subsidiaries

Notes to the Consolidated Interim Financial Statements

September 30, 2022 and 2021 (Unaudited), and December 31, 2021

8.3.2 Details of derivative instruments designated as fair value hedge as of September 30, 2022 and December 31, 2021 and changes in fair value for the nine-month periods ended September 30, 2022 and 2021, are as follows:


(In millions of Korean won)

	September 30, 2022						2022
	Notional amount		Assets		Liabilities		Changes in fair value
Interest rate
Swaps	W	14,343,188	W	209,418	W	123,295	W	15,559
Currency
Forwards		2,065,273		22		220,762		(290,110	)

	W	16,408,461	W	209,440	W	344,057	W	(274,551	)


(In millions of Korean won)

	December 31, 2021						2021
	Notional amount		Assets		Liabilities		Changes in fair value
Interest rate
Swaps	W	8,910,139	W	127,290	W	38,253	W	(59,601	)
Currency
Forwards		1,705,213		2,436		54,855		(182,923	)

	W	10,615,352	W	129,726	W	93,108	W	(242,524	)

8.3.3 Details of hedge ineffectiveness recognized in profit or loss on derivative instruments designated as fair value hedge for the nine-month periods ended September 30, 2022 and 2021, are as follows:


(In millions of Korean won)
	2022		2021
Hedge accounting
Interest rate	W	2,932	W	(13,894	)
Currency		22,225		(9,233	)

	W	25,157	W	(23,127	)

8.3.4 Gains or losses on fair value hedging instruments and hedged items attributable to the hedged risk for the nine-month periods ended September 30, 2022 and 2021, are as follows:


(In millions of Korean won)	2022			2021
Losses on hedging instruments	W	(264,524	)	W	(226,497	)
Gains on hedged items attributable to the hedged risk		278,977			210,687

	W	14,453		W	(15,810	)

KB Financial Group Inc. and Subsidiaries

Notes to the Consolidated Interim Financial Statements

September 30, 2022 and 2021 (Unaudited), and December 31, 2021

8.4 Cash Flow Hedge

8.4.1 Details of cash flow hedged items as of September 30, 2022 and December 31, 2021 and changes in fair value for the nine-month periods ended September 30, 2022 and 2021, are as follows:

(In millions of Korean won)


	Cash flow hedge reserve						Changes in fair value
	September 30, 2022			December 31, 2021			2022			2021
Hedge accounting
Interest rate risk	W	37,593		W	4,864		W	(102,900	)	W	(30,867	)
Currency risk		(60,066	)		(12,597	)		39,557			24,813

	W	(22,473	)	W	(7,733	)	W	(63,343	)	W	(6,054	)

8.4.2 Details of derivative instruments designated as cash flow hedge as of September 30, 2022 and December 31, 2021 and changes in fair value for the nine-month periods ended September 30, 2022 and 2021, are as follows:

(In millions of Korean won)


	September 30, 2022						2022
	Notional amount		Assets		Liabilities		Changes in fair value
Interest rate
Forwards	W	1,021,352	W	6,297	W	76,738	W	(70,443	)
Swaps		4,937,113		126,709		—		112,913
Currency
Swaps		3,346,170		318,842		232,455		95,355

	W	9,304,635	W	451,848	W	309,193	W	137,825


(In millions of Korean won)

	December 31, 2021						2021
	Notional amount		Assets		Liabilities		Changes in fair value
Interest rate
Swaps	W	4,553,250	W	12,575	W	9,532	W	29,487
Currency
Swaps		3,055,264		46,527		61,331		50,666

	W	7,608,514	W	59,102	W	70,863	W	80,153

8.4.3 Gains or losses on cash flow hedging instruments and hedged items attributable to the hedged risk for the nine-month periods ended September 30, 2022 and 2021, are as follows:


(In millions of Korean won)	2022			2021
Gains on hedging instruments:	W	137,825		W	80,153
Effective portion of gains on cash flow hedging instruments (recognized in other comprehensive income or loss)		139,039			78,952
Ineffective portion of gains on cash flow hedging instruments (recognized in profit or loss)		(1,214	)		1,201

KB Financial Group Inc. and Subsidiaries

Notes to the Consolidated Interim Financial Statements

September 30, 2022 and 2021 (Unaudited), and December 31, 2021

8.4.4 Amounts recognized in other comprehensive income and reclassified from equity to profit or loss related to derivative instruments designated as cash allow hedge for the nine-month periods ended September 30, 2022 and 2021, are as follows:


(In millions of Korean won)	2022			2021
Other comprehensive income	W	139,039		W	78,952
Reclassification to profit or loss		(105,177	)		(46,005	)
Income tax effect		(48,602	)		(20,060	)

	W	(14,740	)	W	12,887

8.5 Hedge of Net Investments in Foreign Operations

8.5.1 Details of net investments in foreign operations hedged items as of September 30, 2022 and December 31, 2021 and changes in fair value for the nine-month periods ended September 30, 2022 and 2021, are as follows:

(In millions of Korean won)

Foreign currency
translation reserve

Changes in fair value

September 30,
2022

December 31,
2021

2022

2021

Hedge accounting

Currency risk

(268,995

)

(35,658

)

318,925

82,185

8.5.2 Details of financial instruments designated as hedge of net investments in foreign operations as of September 30, 2022 and December 31, 2021 and changes in fair value for the nine-month periods ended September 30, 2022 and 2021, are as follows:

(In millions of Korean won)


	September 30, 2022						2022
	Notional amount		Assets		Liabilities		Changes in fair value
Currency
Forwards	W	102,376	W	—	W	21,059	W	(51,177	)
Debentures in foreign currencies		1,540,975		—		1,540,975		(267,748	)

	W	1,643,351	W	—	W	1,562,034	W	(318,925	)


(In millions of Korean won)

	December 31, 2021						2021
	Notional amount		Assets		Liabilities		Changes in fair value
Currency
Forwards	W	91,636	W	—	W	8,498	W	(7,184	)
Debentures in foreign currencies		1,273,227		—		1,273,227		(75,001	)

	W	1,364,863	W	—	W	1,281,725	W	(82,185	)

KB Financial Group Inc. and Subsidiaries

Notes to the Consolidated Interim Financial Statements

September 30, 2022 and 2021 (Unaudited), and December 31, 2021

8.5.3 Fair value of non-derivative financial instruments designated as hedge of net investments in foreign operations as of September 30, 2022 and December 31, 2021, are as follows:


(In millions of Korean won)	September 30, 2022		December 31, 2021
Debentures in foreign currencies	W	1,371,302	W	1,275,291

8.5.4 Gains or losses on net investments in foreign operations hedging instruments and hedged items attributable to the hedged risk for the nine-month periods ended September 30, 2022 and 2021, are as follows:


(In millions of Korean won)	2022			2021
Losses on hedging instruments:	W	(318,925	)	W	(82,185	)
Effective portion of losses on hedge of net investments in foreign operations (recognized in other comprehensive income or loss)		(318,925	)		(82,185	)
Ineffective portion of losses on hedge of net investments in foreign operations (recognized in profit or loss)		—			—

8.5.5 Effective portion of gains or losses on net investments in foreign operations hedging instruments recognized in other comprehensive income (loss) for the nine-month periods ended September 30, 2022 and 2021, are as follows:


(In millions of Korean won)	2022			2021
Other comprehensive loss	W	(318,925	)	W	(82,185	)
Reclassification to profit or loss		—			5,195
Income tax effect		85,588			23,838

	W	(233,337	)	W	(53,152	)

8.6 Interest Rate Benchmark Reform

The USD LIBOR interest rate will be replaced by the Secured Overnight Financing Rate (“SOFR”) based on actual transactions. In the case of KRW, the Korean government bond/monetary stabilization bond RP rate has been finally decided as the Risk-Free Reference Rate (“RFR”) and will replace the Certificate of Deposit (“CD”) rate in the mid to long-term. Within the corresponding hedging relationship of related significant interest rate benchmark, the Group assumed that the spread to be changed on the RFR basis including SOFR would be similar to that included in the interest rate swap used as a hedging instrument, and no other changes were assumed.

KB Financial Group Inc. and Subsidiaries

Notes to the Consolidated Interim Financial Statements

September 30, 2022 and 2021 (Unaudited), and December 31, 2021

9. Loans Measured at Amortized Cost

9.1 Details of loans as of September 30, 2022 and December 31, 2021, are as follows:


(In millions of Korean won)	September 30, 2022			December 31, 2021
Loans measured at amortized cost	W	460,009,453		W	420,910,259
Deferred loan origination fees and costs		571,709			674,069
Less: Allowances for credit losses		(3,718,120	)		(3,684,055	)

	W	456,863,042		W	417,900,273

9.2 Details of loans to banks as of September 30, 2022 and December 31, 2021, are as follows:


(In millions of Korean won)	September 30, 2022			December 31, 2021
Loans measured at amortized cost	W	17,867,670		W	8,325,177
Less: Allowances for credit losses		(1,398	)		(443	)

	W	17,866,272		W	8,324,734

9.3 Details of loan types and customer types of loans to customers other than banks as of September 30, 2022 and December 31, 2021, are as follows:


(In millions of Korean won)	September 30, 2022
	Retail			Corporate			Credit card			Total
Loans in Korean won	W	180,286,362		W	177,904,600		W	—		W	358,190,962
Loans in foreign currencies		5,655,389			29,414,075			—			35,069,464
Domestic import usance bills		—			5,514,467			—			5,514,467
Off-shore funding loans		—			1,089,743			—			1,089,743
Call loans		—			277,131			—			277,131
Bills bought in Korean won		—			2,601			—			2,601
Bills bought in foreign currencies		—			2,427,691			—			2,427,691
Guarantee payments under acceptances and guarantees		1			39,004			—			39,005
Credit card receivables in Korean won		—			—			22,328,177			22,328,177
Credit card receivables in foreign currencies		—			—			58,431			58,431
Bonds purchased under repurchase agreements		—			8,968,370			—			8,968,370
Privately placed bonds		—			861,896			—			861,896
Factored receivables		112			2			—			114
Lease receivables		617,244			613,410			—			1,230,654
Loans for installment credit		6,114,317			540,469			—			6,654,786

		192,673,425			227,653,459			22,386,608			442,713,492

Proportion (%)		43.52			51.42			5.06			100.00
Less: Allowances for credit losses		(1,124,744	)		(1,792,738	)		(799,240	)		(3,716,722	)

	W	191,548,681		W	225,860,721		W	21,587,368		W	438,996,770

KB Financial Group Inc. and Subsidiaries

Notes to the Consolidated Interim Financial Statements

September 30, 2022 and 2021 (Unaudited), and December 31, 2021

9.3 Details of loan types and customer types of loans to customers other than banks as of September 30, 2022 and December 31, 2021, are as follows: (cont’d)


(In millions of Korean won)	December 31, 2021
	Retail			Corporate			Credit card			Total
Loans in Korean won	W	184,872,384		W	162,081,901		W	—		W	346,954,285
Loans in foreign currencies		3,990,253			20,865,495			—			24,855,748
Domestic import usance bills		—			3,311,142			—			3,311,142
Off-shore funding loans		—			1,064,623			—			1,064,623
Call loans		—			902,301			—			902,301
Bills bought in Korean won		—			2,209			—			2,209
Bills bought in foreign currencies		—			2,001,046			—			2,001,046
Guarantee payments under acceptances and guarantees		7			20,773			—			20,780
Credit card receivables in Korean won		—			—			20,766,340			20,766,340
Credit card receivables in foreign currencies		—			—			57,980			57,980
Bonds purchased under repurchase agreements		—			4,855,194			—			4,855,194
Privately placed bonds		—			758,557			—			758,557
Factored receivables		113			458			—			571
Lease receivables		778,425			513,714			—			1,292,139
Loans for installment credit		6,265,896			150,340			—			6,416,236

		195,907,078			196,527,753			20,824,320			413,259,151

Proportion (%)		47.40			47.56			5.04			100.00
Less: Allowances for credit losses		(1,004,995	)		(1,886,473	)		(792,144	)		(3,683,612	)

	W	194,902,083		W	194,641,280		W	20,032,176		W	409,575,539

KB Financial Group Inc. and Subsidiaries

Notes to the Consolidated Interim Financial Statements

September 30, 2022 and 2021 (Unaudited), and December 31, 2021

10. Allowances for Credit Losses

10.1 Changes in allowances for credit losses of loans measured at amortized cost for the nine-month periods ended September 30 2022 and 2021, are as follows:


(In millions of Korean won)	2022
	Retail									Corporate									Credit card
	12-month expected credit losses			Lifetime expected credit losses						12-month expected credit losses			Lifetime expected credit losses						12-month expected credit losses			Lifetime expected credit losses
	12-month expected credit losses			Non-impaired			Impaired			12-month expected credit losses			Non-impaired			Impaired			12-month expected credit losses			Non-impaired			Impaired
Beginning	W	473,983		W	241,871		W	289,141		W	447,798		W	478,154		W	960,964		W	175,168		W	322,649		W	294,327
Transfer between stages:
Transfer to 12-month expected credit losses		112,370			(103,804	)		(8,566	)		120,364			(103,252	)		(17,112	)		50,823			(49,950	)		(873	)
Transfer to lifetime expected credit losses		(82,788	)		102,519			(19,731	)		(73,543	)		94,695			(21,152	)		(23,653	)		24,910			(1,257	)
Impairment		(5,428	)		(48,655	)		54,083			(6,070	)		(34,578	)		40,648			(1,894	)		(20,470	)		22,364
Write-offs		—			(1	)		(322,695	)		—			(3	)		(376,370	)		—			—			(326,183	)
Sales		(813	)		(83	)		(8,129	)		(103	)		(87	)		(63,270	)		—			—			—
Provision (reversal) for credit losses ^1,2		36,165			57,211			341,288			33,850			120,721			123,634			(33,722	)		43,763			331,917
Others (exchange differences, etc.)		1,147			1,769			13,890			17,996			(1,882	)		52,734			114			—			(8,793	)

Ending ³	W	534,636		W	250,827		W	339,281		W	540,292		W	553,768		W	700,076		W	166,836		W	320,902		W	311,502

KB Financial Group Inc. and Subsidiaries

Notes to the Consolidated Interim Financial Statements

September 30, 2022 and 2021 (Unaudited), and December 31, 2021

10.1 Changes in allowances for credit losses of loans measured at amortized cost for the nine-month periods ended September 30, 2022 and 2021, are as follows: (cont’d)


(In millions of Korean won)	2021
	Retail									Corporate									Credit card
	12-month expected credit losses			Lifetime expected credit losses						12-month expected credit losses			Lifetime expected credit losses						12-month expected credit losses			Lifetime expected credit losses
	12-month expected credit losses			Non-impaired			Impaired			12-month expected credit losses			Non-impaired			Impaired			12-month expected credit losses			Non-impaired			Impaired
Beginning	W	403,805		W	240,578		W	265,705		W	368,782		W	410,937		W	892,061		W	205,157		W	234,219		W	262,119
Transfer between stages:
Transfer to 12-month expected credit losses		103,477			(97,385	)		(6,092	)		123,515			(63,246	)		(60,269	)		41,356			(39,823	)		(1,533	)
Transfer to lifetime expected credit losses		(76,353	)		92,652			(16,299	)		(57,887	)		83,364			(25,477	)		(25,430	)		26,786			(1,356	)
Impairment		(6,130	)		(49,633	)		55,763			(2,132	)		(33,414	)		35,546			(1,981	)		(14,127	)		16,108
Write-offs		—			13			(300,267	)		—			(2	)		(181,741	)		—			—			(335,205	)
Sales		(1,104	)		(49	)		(1,698	)		(177	)		—			(9,674	)		—			—			—
Provision (reversal) for credit losses ^1,2		2,966			46,082			274,997			(38,629	)		22,102			182,660			(19,275	)		31,222			335,853
Business combination		8,315			2,223			7,194			—			—			1,654			—			—			—
Others (exchange differences, etc.)		1,314			909			3,859			8,411			1,959			50,045			10			—			(10,525	)

Ending ³	W	436,290		W	235,390		W	283,162		W	401,883		W	421,700		W	884,805		W	199,837		W	238,277		W	265,461

Provision for credit losses in the consolidated statements of comprehensive income also includes provision (reversal) for credit losses of due from financial institutions (Note 7.3), provision (reversal) for credit losses of financial investments (Note 11.5), provision (reversal) for credit losses of unused commitments, acceptances and guarantees (Note 18.2), provision (reversal) for credit losses of financial guarantee contracts (Note 18.3), and provision (reversal) for credit losses of other financial assets.

²	Includes W 336,694 million and W 277,504 million of collections from written-off loans for the nine-month periods ended September 30, 2022 and 2021, respectively.

Includes additional allowances of W 36,864 million and W 35,347 million due to expanding the scope of the loans subject to lifetime expected credit losses (non-impaired) as of September 30, 2022 and 2021, respectively, and W 174,730 million reflecting the changed forward-looking information as of September 30, 2022, and W 45,886 million for industries and borrowers which are highly affected by COVID-19 as of September 30, 2021.

The Group manages the written-off loans that their legal extinctive prescriptions have not been completed, and that have not been collected. The balances of those loans are W 9,826,258 million and W 9,945,130 million as of September 30, 2022 and December 31, 2021, respectively.

KB Financial Group Inc. and Subsidiaries

Notes to the Consolidated Interim Financial Statements

September 30, 2022 and 2021 (Unaudited), and December 31, 2021

10.2 Changes in gross carrying amount of loans for the nine-month periods ended September 30, 2022 and 2021, are as follows:


(In millions of Korean won)	2022
	12-month expected credit losses			Lifetime expected credit losses
	12-month expected credit losses			Non-impaired			Impaired
Beginning	W	385,317,491		W	32,778,737		W	3,488,100
Transfer between stages:
Transfer to 12-month expected credit losses		27,717,962			(27,543,840	)		(174,122	)
Transfer to lifetime expected credit losses (non-impaired)		(31,174,704	)		31,528,051			(353,347	)
Transfer to lifetime expected credit losses (impaired)		(698,590	)		(1,074,084	)		1,772,674
Write-offs		—			(4	)		(1,025,248	)
Sales		(3,120,554	)		(15,203	)		(174,115	)
Net increase (decrease) (execution, repayment, and others)		44,530,895			(1,198,120	)		(817	)

Ending	W	422,572,500		W	34,475,537		W	3,533,125


(In millions of Korean won)	2021
	12-month expected credit losses			Lifetime expected credit losses
	12-month expected credit losses			Non-impaired			Impaired
Beginning	W	348,518,780		W	28,504,202		W	3,427,365
Transfer between stages:
Transfer to 12-month expected credit losses		23,542,610			(23,203,465	)		(339,145	)
Transfer to lifetime expected credit losses (non-impaired)		(28,638,247	)		29,071,561			(433,314	)
Transfer to lifetime expected credit losses (impaired)		(510,735	)		(1,173,403	)		1,684,138
Write-offs		—			10			(817,212	)
Sales		(2,771,512	)		(8,379	)		(77,773	)
Business combination		116,067			3,924			12,808
Net increase (decrease) (execution, repayment, and others)		31,609,396			(2,764,723	)		214,258

Ending	W	371,866,359		W	30,429,727		W	3,671,125

KB Financial Group Inc. and Subsidiaries

Notes to the Consolidated Interim Financial Statements

September 30, 2022 and 2021 (Unaudited), and December 31, 2021

11. Financial Assets at Fair Value through Profit or Loss and Financial Investments

11.1 Details of financial assets at fair value through profit or loss and financial investments as of September 30, 2022 and December 31, 2021, are as follows:


(In millions of Korean won)	September 30, 2022			December 31, 2021
Financial assets at fair value through profit or loss
Debt securities:
Government and public bonds	W	6,098,024		W	8,294,084
Financial bonds		11,395,906			16,887,594
Corporate bonds		4,752,843			5,433,010
Asset-backed securities		181,573			197,865
Beneficiary certificates		17,379,479			15,849,129
Derivative-linked securities		1,794,191			1,543,188
Other debt securities		17,437,198			14,797,822
Equity securities:
Stocks		1,770,378			1,804,507
Other equity securities		651,341			614,956
Loans:
Privately placed bonds		195,690			230,006
Other loans		39,916			39,290
Due from financial institutions:
Other due from financial institutions		90,339			200,742
Others		98,404			113,622

	W	61,885,282		W	66,005,815

Financial investments
Financial assets at fair value through other comprehensive income
Debt securities:
Government and public bonds	W	15,683,627		W	14,317,477
Financial bonds		19,660,393			21,928,735
Corporate bonds		18,630,427			18,986,005
Asset-backed securities		599,996			996,428
Other debt securities		28,074			30,866
Equity securities:
Stocks		1,907,180			3,588,415
Equity investments		17,096			27,211
Other equity securities		392,465			187,502
Loans:
Privately placed bonds		448,288			299,634
Other loans		—			13,970

		57,367,546			60,376,243

Financial assets at amortized cost
Debt securities:
Government and public bonds		22,989,364			21,447,622
Financial bonds		8,920,412			3,850,954
Corporate bonds		15,585,076			12,246,441
Asset-backed securities		7,198,779			6,899,675
Other debt securities		31,650			31,105
Less: Allowances for credit losses		(6,654	)		(4,169	)

		54,718,627			44,471,628

	W	112,086,173		W	104,847,871

KB Financial Group Inc. and Subsidiaries

Notes to the Consolidated Interim Financial Statements

September 30, 2022 and 2021 (Unaudited), and December 31, 2021

11.2 Dividend income from equity securities designated at fair value through other comprehensive income for the nine-month periods ended September 30, 2022 and 2021, are as follows:


(In millions of Korean won)		2022				2021
		From the equity securities derecognized		From the equity securities held		From the equity securities derecognized		From the equity securities held
Equity securities measured at fair value through other comprehensive income:
Stocks	Listed	W	—	W	411	W	7,106	W	300
	Unlisted		—		22,140		372		19,034
Other equity securities			—		9,104		—		5,083

		W	—	W	31,655	W	7,478	W	24,417

11.3 Derecognized equity securities measured at fair value through other comprehensive income for the nine-month periods ended September 30, 2022 and 2021, are as follows:


(In millions of Korean won)		2022				2021
		Disposal price		Accumulated other comprehensive income as of disposal date		Disposal price		Accumulated other comprehensive income (loss) as of disposal date
Equity securities measured at fair value through other comprehensive income:
Stocks	Listed	W	424,306		334,069	W	574,932	W	(304,816	)
	Unlisted		—		—		7,533		6,282

		W	424,306		334,069	W	582,465	W	(298,534	)

KB Financial Group Inc. and Subsidiaries

Notes to the Consolidated Interim Financial Statements

September 30, 2022 and 2021 (Unaudited), and December 31, 2021

11.4 Provision (reversal) for credit losses of financial investments for the nine-month periods ended September 30, 2022 and 2021, are as follows:


(In millions of Korean won)	2022
	Provision		Reversal			Total
Securities measured at fair value through other comprehensive income	W	3,412	W	(1,254	)	W	2,158
Loans measured at fair value through other comprehensive income		156		(90	)		66
Securities measured at amortized cost		2,843		(365	)		2,478

	W	6,411	W	(1,709)		W	4,702


(In millions of Korean won)	2021
	Provision		Reversal			Total
Securities measured at fair value through other comprehensive income	W	3,002	W	(363	)	W	2,639
Loans measured at fair value through other comprehensive income		174		(28	)		146
Securities measured at amortized cost		1,112		(492	)		620

	W	4,288	W	(883	)	W	3,405

11.5 Changes in allowances for credit losses of financial investments for the nine-month periods ended September 30, 2022 and 2021, are as follows:


(In millions of Korean won)	2022
	12-month expected credit losses			Lifetime expected credit losses
	12-month expected credit losses			Non-impaired			Impaired
Beginning	W	16,820		W	28		W	76
Transfer between stages:
Transfer to 12-month expected credit losses		—			—			—
Transfer to lifetime expected credit losses		—			—			—
Sales		(512	)		(23	)		—
Provision for credit losses		4,604			98			—
Others		367			—			—

Ending	W	21,279		W	103		W	76


(In millions of Korean won)	2021
	12-month expected credit losses			Lifetime expected credit losses
	12-month expected credit losses			Non-impaired			Impaired
Beginning	W	9,908		W	39		W	73
Transfer between stages:
Transfer to 12-month expected credit losses		—			—			—
Transfer to lifetime expected credit losses		—			—			—
Sales		(1,554	)		(3	)		—
Provision (reversal) for credit losses		3,424			(19	)		—
Others		40			6			—

Ending	W	11,818		W	23		W	73

KB Financial Group Inc. and Subsidiaries

Notes to the Consolidated Interim Financial Statements

September 30, 2022 and 2021 (Unaudited), and December 31, 2021

12. Investments in Associates and Joint Ventures

Details of investments in associates and joint ventures as of September 30, 2022 and December 31, 2021, are as follows:


(In millions of Korean won)	September 30, 2022
	Ownership (%)		Acquisition cost		Share of net asset amount			Carrying amount		Industry	Location
KB-KDBC Pre-IPO New Technology Business Investment Fund ²		66.66	W	7,401	W	9,445		W	9,445	Investment finance	Korea
Balhae Infrastructure Company ¹		12.61		97,091		99,156			99,117	Investment finance	Korea
Aju Good Technology Venture Fund		38.46		9,143		22,919			22,914	Investment finance	Korea
SY Auto Capital Co., Ltd.		49.00		9,800		19,657			18,386	Auto loans	Korea
Incheon Bridge Co., Ltd. ¹		14.99		9,158		(15,614	)		—	Operation of highways and related facilities	Korea
Big Dipper Co., Ltd. ¹		17.86		440		78			78	Research, consulting, and big data	Korea
Paycoms Co., Ltd. ³		12.24		800		201			201	System software publishing	Korea
Food Factory Co., Ltd. ⁴		22.22		1,000		636			1,379	Farm product distribution	Korea
KBSP Private Equity Fund No.4 ¹		14.95		6,100		2,075			2,075	Investment finance	Korea
Korea Credit Bureau Co., Ltd. ¹		9.00		4,500		5,065			5,065	Credit information	Korea
KB Social Impact Investment Fund		30.00		4,500		4,225			4,225	Investment finance	Korea
KB-Solidus Global Healthcare Fund ²		43.33		29,737		22,263			26,770	Investment finance	Korea
POSCO-KB Shipbuilding Fund		31.25		2,776		5,361			5,361	Investment finance	Korea
KB-TS Technology Venture Private Equity Fund ²		56.00		11,312		15,920			15,920	Investment finance	Korea
KB-Brain KOSDAQ Scale-up New Technology Business Investment Fund ²		42.55		22,450		26,041			25,297	Investment finance	Korea
KB-SJ Tourism Venture Fund ¹		18.52		4,600		3,984			3,984	Investment finance	Korea
UNION Media Commerce Fund		28.99		1,000		958			958	Investment finance	Korea
KB-Stonebridge Secondary Private Equity Fund ¹		14.56		23,801		21,959			21,959	Investment finance	Korea
KB SPROTT Renewable Private Equity Fund No.1 ²		37.69		18,041		16,634			16,634	Investment finance	Korea
KB-UTC Inno-Tech Venture Fund ²		44.29		21,375		20,007			20,007	Investment finance	Korea
WJ Private Equity Fund No.1		26.95		10,000		9,585			9,585	Investment finance	Korea

KB Financial Group Inc. and Subsidiaries

Notes to the Consolidated Interim Financial Statements

September 30, 2022 and 2021 (Unaudited), and December 31, 2021

12. Investments in Associates and Joint Ventures (cont’d)


(In millions of Korean won)	September 30, 2022
	Ownership (%)		Acquisition cost		Share of net asset amount		Carrying amount		Industry	Location
All Together Korea Fund No.2 ⁵		99.99	W	10,000	W	10,179	W	10,179	Asset management	Korea
KB-NAU Special Situation Corporate Restructuring Private Equity Fund ¹		12.00		11,460		13,728		13,728	Asset management	Korea
Project Vanilla Co., Ltd.		49.00		2,450		3		3	Investment finance	Korea
December & Company Inc. ¹		16.78		29,931		4,997		17,293	Investment finance	Korea
2020 KB Fintech Renaissance Fund ¹		5.05		550		612		612	Investment finance	Korea
KB Material and Parts No.1 PEF ¹		14.47		3,400		3,334		3,334	Investment finance	Korea
FineKB Private Equity Fund No.1		25.00		12,775		15,731		15,731	Investment finance	Korea
G payment Joint Stock Company		43.84		9,029		3,240		10,375	Investment advisory and securities trading	Vietnam
KB-GeneN Medical Venture Fund No.1		22.52		2,000		1,975		1,975	Investment finance	Korea
KB-BridgePole Venture Investment Fund ¹		6.30		850		839		839	Investment finance	Korea
KB-Kyobo New Mobility Power Fund		28.57		3,000		2,963		2,963	Investment finance	Korea
DA-Friend New Technology Investment Fund No.2		27.06		988		954		954	Investment finance	Korea
Cornerstone Pentastone Fund No.4		21.52		818		797		797	Investment finance	Korea
SKS-VLP New Technology Investment Fund No.2		23.11		1,156		1,044		1,044	Investment finance	Korea
Star-Lord General Investors Private Real Estate Investment Company No.10		26.24		46,700		46,369		—	Real estate investment	Korea
JS Private Equity Fund No.3		20.48		1,700		1,674		1,674	Investment finance	Korea
Mirae Asset Mobility Investment Fund No.1		22.99		2,000		1,988		1,988	Investment finance	Korea
KB-FT 1st Green Growth Investment Fund ¹		10.34		2,000		1,980		1,980	Investment finance	Korea
Glenwood Credit Private Equity Fund No.2		29.89		42,000		42,742		42,742	Investment finance	Korea
SKS IB NEW M&T Fund No.1		31.25		1,000		993		993	Investment finance	Korea
Smart Korea KB Future9-Sejong Venture Fund		38.46		2,000		1,870		1,870	Investment finance	Korea
KB-KTB Technology Venture Fund ²		50.90		11,200		10,773		10,773	Investment finance	Korea

KB Financial Group Inc. and Subsidiaries

Notes to the Consolidated Interim Financial Statements

September 30, 2022 and 2021 (Unaudited), and December 31, 2021

12. Investments in Associates and Joint Ventures (cont’d)


(In millions of Korean won)	September 30, 2022
	Ownership (%)		Acquisition cost		Share of net asset amount			Carrying amount		Industry	Location
KB-SOLIDUS Healthcare Investment Fund ²		88.23	W	15,300	W	14,454		W	14,454	Investment finance	Korea
Paramark KB Fund No.1		20.69		14,310		13,787			13,784	Investment finance	Korea
KB Co-Investment Private Equity Fund No.1 ¹		7.12		7,268		7,269			7,246	Investment finance	Korea
POSITIVE Sobujang Venture Fund No.1		43.96		2,000		1,987			1,987	Investment finance	Korea
History 2022 Fintech Fund		34.78		2,000		1,991			1,991	Investment finance	Korea
PEBBLES-MW M.C.E New Technology Investment Fund 1st		23.26		2,000		1,992			1,992	Investment finance	Korea
KB-NP Green ESG New Technology Venture Capital Fund		29.85		5,000		4,890			4,890	Investment finance	Korea
TMAP Mobility Co., Ltd ¹		8.25		200,000		66,077			200,000	Investment finance	Korea
Others				2,516		(1,157	)		991

			W	742,426	W	570,630		W	698,542

KB Financial Group Inc. and Subsidiaries

Notes to the Consolidated Interim Financial Statements

September 30, 2022 and 2021 (Unaudited), and December 31, 2021

12. Investments in Associates and Joint Ventures (cont’d)


(In millions of Korean won)	December 31, 2021
	Ownership (%)		Acquisition cost		Share of net asset amount			Carrying amount		Industry	Location
KB Pre IPO Secondary Venture Fund No.1 ¹		15.19	W	259	W	1,622		W	1,622	Investment finance	Korea
KB-KDBC Pre-IPO New Technology Business Investment Fund ²		66.66		8,801		11,789			11,789	Investment finance	Korea
KB Star Office Private Real Estate Master Fund No.1		21.05		20,000		26,240			26,240	Investment finance	Korea
Balhae Infrastructure Company ¹		12.61		105,924		99,785			99,785	Investment finance	Korea
Aju Good Technology Venture Fund		38.46		12,343		22,921			22,921	Investment finance	Korea
SY Auto Capital Co., Ltd.		49.00		9,800		19,835			18,222	Auto loans	Korea
Incheon Bridge Co., Ltd. ¹		14.99		9,158		(19,481	)		—	Operation of highways and related facilities	Korea
Big Dipper Co., Ltd.		25.14		440		(147	)		—	Research, consulting, and big data	Korea
Paycoms Co., Ltd. ³		11.05		800		181			525	System software publishing	Korea
Food Factory Co., Ltd. ⁴		22.22		1,000		633			1,320	Farm product distribution	Korea
KBSP Private Equity Fund No.4 ¹		14.95		6,100		5,628			5,628	Investment finance	Korea
Korea Credit Bureau Co., Ltd. ¹		9.00		4,500		4,497			4,497	Credit information	Korea
KB Social Impact Investment Fund		30.00		4,500		4,282			4,282	Investment finance	Korea
KB-Solidus Global Healthcare Fund ²		43.33		45,557		48,201			48,898	Investment finance	Korea
POSCO-KB Shipbuilding Fund		31.25		2,776		5,413			5,413	Investment finance	Korea
KB-TS Technology Venture Private Equity Fund ²		56.00		14,280		16,828			16,828	Investment finance	Korea
KB-Brain KOSDAQ Scale-up New Technology Business Investment Fund ²		42.55		25,250		29,669			28,919	Investment finance	Korea
KB-SJ Tourism Venture Fund ¹		18.52		4,999		4,146			4,146	Investment finance	Korea
UNION Media Commerce Fund		28.99		1,000		959			959	Investment finance	Korea
KB-Stonebridge Secondary Private Equity Fund ¹		14.56		21,641		21,948			21,948	Investment finance	Korea
KB SPROTT Renewable Private Equity Fund No.1 ²		37.69		5,795		4,680			4,680	Investment finance	Korea
KB-UTC Inno-Tech Venture Fund ²		44.29		21,375		20,972			20,972	Investment finance	Korea
WJ Private Equity Fund No.1		26.95		10,000		9,604			9,604	Investment finance	Korea
All Together Korea Fund No.2 ⁵		99.99		10,000		10,070			10,070	Asset management	Korea

KB Financial Group Inc. and Subsidiaries

Notes to the Consolidated Interim Financial Statements

September 30, 2022 and 2021 (Unaudited), and December 31, 2021

12. Investments in Associates and Joint Ventures (cont’d)


(In millions of Korean won)	December 31, 2021
	Ownership (%)		Acquisition cost		Share of net asset amount		Carrying amount		Industry	Location
KB-NAU Special Situation Corporate Restructuring Private Equity Fund ¹		12.00	W	13,392	W	15,254	W	15,254	Asset management	Korea
Project Vanilla Co., Ltd.		49.00		2,450		525		525	Investment finance	Korea
December & Company Inc. ¹		16.78		25,330		9,054		21,388	Investment finance	Korea
2020 KB Fintech Renaissance Fund ¹		5.05		550		618		618	Investment finance	Korea
KB Material and Parts No.1 PEF ¹		14.47		3,400		3,343		3,343	Investment finance	Korea
FineKB Private Equity Fund No.1		25.00		8,375		8,067		8,067	Investment finance	Korea
KB Bio Private Equity No.3 Ltd. ¹		12.20		10,000		9,950		9,950	Investment finance	Korea
G payment Joint Stock Company		43.84		9,029		3,175		9,350	Investment advisory and securities trading	Vietnam
498 Seventh Owners LLC ⁶		49.90		166,851		—		—	Real estate investment	United States
Smart Korea KB Future9-Sejong Venture Fund		38.46		1,000		962		962	Investment finance	Korea
KB-KTB Technology Venture Fund ²		50.50		5,600		5,503		5,554	Investment finance	Korea
KB-SOLIDUS Healthcare Investment Fund ²		88.23		1,800		1,800		1,800	Investment finance	Korea
Paramark KB Fund No.1		20.69		2,040		1,850		1,850	Investment finance	Korea
Others				2,475		81		789

			W	598,590	W	410,457	W	448,718

¹	As of September 30, 2022 and December 31, 2021, the Group can exercise significant influence on the decision-making processes of the associate’s financial and business policies through participation in governing bodies.

²	In order to direct relevant activities, it is necessary to obtain the consent of the two co-operative members; the Group has applied the equity method as the Group cannot control the investee by itself.

³	The ownership of Paycoms Co., Ltd. would be 21.42% and 21.84% as of September 30, 2022 and December 31, 2021, respectively, considering the potential voting rights of convertible bonds.

⁴	The ownership of Food Factory Co., Ltd. would be 30.00% and 30.00% as of September 30, 2022 and December 31, 2021, respectively, considering the potential voting rights of convertible bonds.

⁵	As of September 30, 2022 and December 31, 2021, the Group participates in the investment management committee but cannot exercise control.

⁶	The investment was classified as assets of a disposal group held for sale as of December 31, 2021.

In accordance with Korean IFRS No.1028 Investments in Associates and Joint Ventures, the Group elected an exemption from applying the equity method for 47 companies including Banksalad Co., Ltd., and classified them as financial assets at fair value through profit or loss.

Although the Group holds 20% or more of the ownership, investment trusts with limited influence on related activities according to trust contracts, and companies with limited influence on related activities due to bankruptcy and corporate rehabilitation proceedings are excluded from associates.

KB Financial Group Inc. and Subsidiaries

Notes to the Consolidated Interim Financial Statements

September 30, 2022 and 2021 (Unaudited), and December 31, 2021

13. Deferred Income Tax Assets and Liabilities

Details of deferred income tax assets and liabilities as of September 30, 2022 and December 31, 2021, are as follows:


(In millions of Korean won)	September 30, 2022
	Assets			Liabilities			Net amount
Other provisions	W	185,502		W	—		W	185,502
Allowances for credit losses		8,659			(9,481	)		(822	)
Impairment losses of property and equipment		7,272			(1,793	)		5,479
Share-based payments		18,322			—			18,322
Provisions for acceptances and guarantees		45,680			—			45,680
Gains or losses on valuation of derivatives		517,819			(336,155	)		181,664
Present value discount		18,258			(2,586	)		15,672
Gains or losses on fair value hedge		—			(118,914	)		(118,914	)
Accrued interest		—			(150,250	)		(150,250	)
Deferred loan origination fees and costs		15,649			(201,561	)		(185,912	)
Advanced depreciation provision		—			(1,703	)		(1,703	)
Gains or losses on revaluation		—			(305,202	)		(305,202	)
Investments in subsidiaries and others		44,683			(195,224	)		(150,541	)
Gains or losses on valuation of security investment		1,292,619			(268,709	)		1,023,910
Defined benefit obligation		604,154			—			604,154
Accrued expenses		230,635			—			230,635
Plan assets		—			(498,766	)		(498,766	)
Adjustments to the prepaid contributions		—			(30,020	)		(30,020	)
Derivative-linked securities		13,009			(398,137	)		(385,128	)
Others *		1,197,117			(1,005,087	)		192,030

		4,199,378			(3,523,588	)		675,790

Offsetting of deferred income tax assets and liabilities		(3,505,393	)		3,505,393			—

	W	693,985		W	(18,195	)	W	675,790

*	Includes Purchase Price Allocation (“PPA”) amount arising from the acquisition of Prudential Life Insurance Company of Korea Ltd., KB Insurance Co., Ltd., and others.

KB Financial Group Inc. and Subsidiaries

Notes to the Consolidated Interim Financial Statements

September 30, 2022 and 2021 (Unaudited), and December 31, 2021

13. Deferred Income Tax Assets and Liabilities (cont’d)


(In millions of Korean won)	December 31, 2021
	Assets			Liabilities			Net amount
Other provisions	W	178,027		W	—		W	178,027
Allowances for credit losses		28,770			(3,008	)		25,762
Impairment losses of property and equipment		9,198			(1,833	)		7,365
Share-based payments		24,249			—			24,249
Provisions for acceptances and guarantees		33,091			—			33,091
Gains or losses on valuation of derivatives		41,289			(139,281	)		(97,992	)
Present value discount		14,254			(5,929	)		8,325
Gains or losses on fair value hedge		—			(14,642	)		(14,642	)
Accrued interest		—			(140,852	)		(140,852	)
Deferred loan origination fees and costs		10,473			(223,170	)		(212,697	)
Advanced depreciation provision		—			(1,703	)		(1,703	)
Gains or losses on revaluation		—			(318,539	)		(318,539	)
Investments in subsidiaries and others		42,547			(159,411	)		(116,864	)
Gains or losses on valuation of security investment		104,168			(1,192,004	)		(1,087,836	)
Defined benefit obligation		608,471			—			608,471
Accrued expenses		281,983			—			281,983
Plan assets		—			(573,895	)		(573,895	)
Adjustments to the prepaid contributions		—			(29,273	)		(29,273	)
Derivative-linked securities		2,241			(46,895	)		(44,654	)
Others		1,031,411			(871,625	)		159,786

		2,410,172			(3,722,060	)		(1,311,888	)

Offsetting of deferred income tax assets and liabilities		(2,251,079	)		2,251,079			—

	W	159,093		W	(1,470,981	)	W	(1,311,888	)

KB Financial Group Inc. and Subsidiaries

Notes to the Consolidated Interim Financial Statements

September 30, 2022 and 2021 (Unaudited), and December 31, 2021

14. Financial Liabilities at Fair Value through Profit or Loss

14.1 Details of financial liabilities at fair value through profit or loss and financial liabilities designated at fair value through profit or loss as of September 30, 2022 and December 31, 2021, are as follows:


(In millions of Korean won)	September 30, 2022		December 31, 2021
Financial liabilities at fair value through profit or loss
Borrowed securities sold	W	2,222,369	W	2,826,885
Others		97,350		112,699

		2,319,719		2,939,584

Financial liabilities designated at fair value through profit or loss
Derivative-linked securities		9,942,340		9,149,396

		9,942,340		9,149,396

	W	12,262,059	W	12,088,980

14.2 Difference between the amount contractually required to pay at maturity and carrying amount of financial liabilities designated at fair value through profit or loss as of September 30, 2022 and December 31, 2021, are as follows:


(In millions of Korean won)	September 30, 2022			December 31, 2021
Amount contractually required to pay at maturity	W	9,733,127		W	8,957,602
Carrying amount		9,942,340			9,149,396

Difference	W	(209,213	)	W	(191,794	)

15. Deposits

Details of deposits as of September 30, 2022 and December 31, 2021, are as follows:


(In millions of Korean won)	September 30, 2022			December 31, 2021
Demand deposits
Demand deposits in Korean won	W	165,638,758		W	180,560,022
Demand deposits in foreign currencies		13,728,062			15,955,246

		179,366,820			196,515,268

Time deposits
Time deposits in Korean won		178,951,182			155,799,563

		178,951,182			155,799,563

Time deposits in foreign currencies		23,982,406			15,594,718
Fair value adjustments of fair value hedged time deposits in foreign currencies		(11,289	)		(1,319	)

		23,971,117			15,593,399

		202,922,299			171,392,962

Certificates of deposits		8,057,015			4,115,688

	W	390,346,134		W	372,023,918

KB Financial Group Inc. and Subsidiaries

Notes to the Consolidated Interim Financial Statements

September 30, 2022 and 2021 (Unaudited), and December 31, 2021

16. Borrowings

16.1 Details of borrowings as of September 30, 2022 and December 31, 2021, are as follows:


(In millions of Korean won)	September 30, 2022		December 31, 2021
General borrowings	W	58,508,766	W	40,859,845
Bonds sold under repurchase agreements and others		8,758,110		14,374,863
Call money		2,541,882		1,677,666

	W	69,808,758	W	56,912,374

16.2 Details of general borrowings as of September 30, 2022 and December 31, 2021, are as follows:


(In millions of Korean won)		Lenders	Interest rate (%) as of September 30, 2022		September 30, 2022		December 31, 2021
Borrowings in Korean won	Borrowings from the Bank of Korea	The Bank of Korea		0.25 ~ 1.25	W	8,172,176	W	7,131,019
	Borrowings from the government	SEMAS and others		0.00 ~ 2.85		2,741,749		2,683,056
	Borrowings from banks	Shinhan Bank and others		2.49 ~ 4.89		691,360		171,482
	Borrowings from non-banking financial institutions	Korea Securities Finance Corporation and others		1.15 ~ 4.74		2,138,470		1,935,906
	Other borrowings	The Korea Development Bank and others		0.00 ~ 5.05		18,358,366		13,292,759

						32,102,121		25,214,222

Borrowings in foreign currencies	Due to banks	Standard Chartered Bank and others		—		164,488		2,143
	Borrowings from banks	Central Bank of Uzbekistan and others		0.03 ~ 13.50		18,817,407		13,396,379
	Borrowings from other financial institutions	The Export-Import Bank of Korea and others		4.03 ~ 4.81		44,609		24,867
	Other borrowings	Standard Chartered Bank and others		0.00 ~ 4.99		7,380,141		2,222,234

						26,406,645		15,645,623

					W	58,508,766	W	40,859,845

KB Financial Group Inc. and Subsidiaries

Notes to the Consolidated Interim Financial Statements

September 30, 2022 and 2021 (Unaudited), and December 31, 2021

17. Debentures

Details of debentures as of September 30, 2022 and December 31, 2021, are as follows:


(In millions of Korean won)	Interest rate (%) as of September 30, 2022		September 30, 2022			December 31, 2021
Debentures in Korean won
Structured debentures		5.65 ~ 8.62	W	750		W	910
Exchangeable bonds *		0.00		240,000			240,000
Subordinated fixed rate debentures		2.02 ~ 7.86		5,355,244			6,241,957
Fixed rate debentures		0.80 ~ 13.70		45,578,731			44,124,235
Floating rate debentures		1.99 ~ 3.69		7,338,070			6,893,782

				58,512,795			57,500,884
Fair value adjustments of fair value hedged debentures in Korean won				(309,628	)		(79,877	)
Less: Discount on debentures in Korean won				(31,865	)		(38,976	)
Less: Adjustment for exchange right of exchangeable bonds in Korean won				(9,263	)		(11,719	)

				58,162,039			57,370,312

Debentures in foreign currencies
Floating rate debentures		0.97 ~ 4.37		2,625,294			2,749,174
Fixed rate debentures		0.05 ~ 12.00		11,738,404			7,312,966

				14,363,698			10,062,140
Fair value adjustments of fair value hedged debentures in foreign currencies				(111,497	)		27,953
Less: Discount on debentures in foreign currencies				(50,952	)		(30,217	)

				14,201,249			10,059,876

			W	72,363,288		W	67,430,188

Fair value of the liability component of exchangeable bonds is calculated by using market interest rate of bonds under the same conditions without the exchange right. The residual amount after deducting the liability component from the issuance amount, represents the value of the exchange right and is recorded in equity. Shares to be exchanged are 5 million treasury shares of KB Financial Group Inc. with the exchange price of W 48,000. Exercise period for exchange right is from the 60th day of the issuance date to 10 days before the maturity date.

KB Financial Group Inc. and Subsidiaries

Notes to the Consolidated Interim Financial Statements

September 30, 2022 and 2021 (Unaudited), and December 31, 2021

18. Provisions

18.1 Details of provisions as of September 30, 2022 and December 31, 2021, are as follows:


(In millions of Korean won)	September 30, 2022		December 31, 2021
Provisions for credit losses of unused loan commitments	W	336,503	W	308,640
Provisions for credit losses of acceptances and guarantees		169,900		121,104
Provisions for credit losses of financial guarantee contracts		4,035		5,351
Provisions for restoration costs		149,106		152,186
Others *		226,022		221,323

	W	885,566	W	808,604

*	Includes provisions for redemption-suspended funds.

18.2 Changes in provisions for credit losses of unused loan commitments, and acceptances and guarantees for the nine-month periods ended September 30, 2022 and 2021, are as follows:


(In millions of Korean won)	2022
	Provisions for credit losses of unused loan commitments									Provisions for credit losses of acceptances and guarantees
	12-month expected credit losses			Lifetime expected credit losses						12-month expected credit losses			Lifetime expected credit losses
	12-month expected credit losses			Non- impaired			Impaired			12-month expected credit losses			Non- impaired			Impaired
Beginning	W	153,997		W	146,619		W	8,024		W	27,397		W	82,170		W	11,537
Transfer between stages:
Transfer to 12-month expected credit losses		36,228			(35,281	)		(947	)		1,138			(1,138	)		—
Transfer to lifetime expected credit losses		(14,618	)		15,058			(440	)		(341	)		1,002			(661	)
Impairment		(206	)		(1,407	)		1,613			(9	)		(138	)		147
Provision (reversal) for credit losses		1,869			19,956			1,086			(4,100	)		39,613			(832	)
Others (exchange differences, etc.)		3,402			1,550			—			3,332			10,365			418

Ending*	W	180,672		W	146,495		W	9,336		W	27,417		W	131,874		W	10,609

KB Financial Group Inc. and Subsidiaries

Notes to the Consolidated Interim Financial Statements

September 30, 2022 and 2021 (Unaudited), and December 31, 2021

18.2 Changes in provisions for credit losses of unused loan commitments, and acceptances and guarantees for the nine-month periods ended September 30, 2022 and 2021, are as follows: (cont’d)


(In millions of Korean won)	2021
	Provisions for credit losses of unused loan commitments									Provisions for credit losses of acceptances and guarantees
	12-month expected credit losses			Lifetime expected credit losses						12-month expected credit losses			Lifetime expected credit losses
	12-month expected credit losses			Non- impaired			Impaired			12-month expected credit losses			Non- impaired			Impaired
Beginning	W	162,721		W	127,463		W	8,569		W	33,088		W	14,838		W	14,328
Transfer between stages:
Transfer to 12-month expected credit losses		34,522			(32,989	)		(1,533	)		3,968			(213	)		(3,755	)
Transfer to lifetime expected credit losses		(15,285	)		15,800			(515	)		(217	)		226			(9	)
Impairment		(396	)		(876	)		1,272			(10	)		(84	)		94
Provision (reversal) for credit losses		(27,896	)		(5,261	)		704			(16,056	)		62,364			2,148
Business combination		813			—			—			—			—			—
Others (exchange differences, etc.)		1,295			1,448			—			1,328			174			295

Ending *	W	155,774		W	105,585		W	8,497		W	22,101		W	77,305		W	13,101

Includes additional provisions of W 29,094 million and W 16,346 million due to expanding the scope of the loans subject to lifetime expected credit losses (non-impaired) as of September 30, 2022 and 2021, respectively, and W 43,169 million reflecting the changed forward-looking information as of September 30, 2022, and W 13,374 million for industries and borrowers which are highly affected by COVID-19 as of September 30, 2021.

18.3 Changes in provisions for credit losses of financial guarantee contracts for the nine-month periods ended September 30, 2022 and 2021, are as follows:


(In millions of Korean won)	2022			2021
Beginning	W	5,351		W	6,348
Provision (reversal)		(449	)		659
Others		(867	)		(156	)

Ending	W	4,035		W	6,851

KB Financial Group Inc. and Subsidiaries

Notes to the Consolidated Interim Financial Statements

September 30, 2022 and 2021 (Unaudited), and December 31, 2021

18.4 Changes in provisions for restoration costs for the nine-month periods ended September 30, 2022 and 2021, are as follows:


(In millions of Korean won)	2022			2021
Beginning	W	152,186		W	151,696
Provision		8,507			8,970
Reversal		(1,681	)		(1,152	)
Used		(12,130	)		(11,871	)
Unwinding of discount		2,064			1,196
Effect of changes in discount rate		160			44

Ending	W	149,106		W	148,883

Provisions for restoration costs are the present value of estimated costs to be incurred for the restoration of the leased properties. The expenditure of the restoration cost will be incurred at the end of each lease contract, and the lease period is used to reasonably estimate the time of expenditure. Also, the average restoration expense based on actual three-year historical data and three-year historical average inflation rate are used to estimate the present value of estimated costs.

18.5 Changes in other provisions for the nine-month periods ended September 30, 2022 and 2021, are as follows:


(In millions of Korean won)	2022
	Membership rewards program			Dormant accounts			Litigations			Others			Total
Beginning	W	22,902		W	3,062		W	55,168		W	140,191		W	221,323
Increase		55,590			2,124			2,414			40,817			100,945
Decrease		(56,315	)		(2,315	)		(1,154	)		(36,790	)		(96,574	)
Others		—			—			657			(329	)		328

Ending	W	22,177		W	2,871		W	57,085		W	143,889		W	226,022


(In millions of Korean won)	2021
	Membership rewards program			Dormant accounts			Litigations			Others			Total
Beginning	W	19,501		W	3,007		W	40,517		W	132,827		W	195,852
Increase		57,121			2,396			17,317			51,112			127,946
Decrease		(54,443	)		(2,439	)		(3,924	)		(72,652	)		(133,458	)
Others		—			—			165			4			169

Ending	W	22,179		W	2,964		W	54,075		W	111,291		W	190,509

KB Financial Group Inc. and Subsidiaries

Notes to the Consolidated Interim Financial Statements

September 30, 2022 and 2021 (Unaudited), and December 31, 2021

19. Net Defined Benefit Liabilities

19.1 Defined Benefit Plan

The Group operates defined benefit plans which have the following characteristics:

•

The Group has the obligation to pay the agreed benefits to all its current and former employees.

•

The Group assumes actuarial risk (that benefits will cost more than expected) and investment risk.

The net defined benefit liabilities recognized in the consolidated statement of financial position are calculated by the independent actuary in accordance with actuarial valuation method. The defined benefit obligation is calculated using the projected unit credit method. Assumptions based on market data and historical data such as discount rate, future salary increase rate, mortality, and consumer price index are used which are updated annually.

Actuarial assumptions may differ from actual results, due to changes in the market conditions, economic trends, and mortality trends which may affect net defined benefit liabilities and future payments. Actuarial gains and losses arising from changes in actuarial assumptions are recognized in the period incurred through other comprehensive income.

19.2 Details of net defined benefit liabilities as of September 30, 2022 and December 31, 2021, are as follows:


(In millions of Korean won)	September 30, 2022			December 31, 2021
Present value of defined benefit obligation	W	2,561,434		W	2,572,517
Fair value of plan assets		(2,225,519	)		(2,447,079	)

Net defined benefit liabilities *	W	335,915		W	125,438

The net defined benefit liabilities of W 335,915 million is calculated by subtracting W 78,881 million of net defined benefit assets from W 414,796 million of net defined benefit liabilities as of September 30, 2022. The net defined benefit liabilities of W 125,438 million is calculated by subtracting W 100,083 million of net defined benefit assets from W 225,521 million of net defined benefit liabilities as of December 31, 2021.

19.3 Details of post-employment benefits recognized in profit or loss for the nine-month periods ended September 30, 2022 and 2021, are as follows:


(In millions of Korean won)	2022		2021
Current service cost	W	186,875	W	181,338
Past service cost		—		540
Net interest expense on net defined benefit liabilities		1,461		2,147
Gains on settlement		—		(2,807	)

Post-employment benefits *	W	188,336	W	181,218

*	Includes post-employment benefits amounting to W 2,273 million and W 2,396 million recognized as other operating expenses for the nine-month periods ended September 30, 2022 and 2021, respectively.

KB Financial Group Inc. and Subsidiaries

Notes to the Consolidated Interim Financial Statements

September 30, 2022 and 2021 (Unaudited), and December 31, 2021

20. Equity

20.1 Share Capital

20.1.1 Details of share capital as of September 30, 2022 and December 31, 2021, are as follows:


(In millions of Korean won and in number of shares)	September 30, 2022		December 31, 2021
Type of share	Ordinary share		Ordinary share
Number of authorized shares		1,000,000,000		1,000,000,000
Par value per share (In Korean won)	W	5,000	W	5,000
Number of issued shares		408,897,068		415,807,920
Share capital *	W	2,090,558	W	2,090,558

*	Due to the retirement of shares deducted through retained earnings, it is different from the total par value of the shares issued.

20.1.2 Changes in outstanding shares for the nine-month periods ended September 30, 2022 and 2021, are as follows:


(In number of shares)	2022		2021
Beginning		389,634,335		389,634,335
Increase		—		—
Decrease		—		—

Ending		389,634,335		389,634,335

20.2 Hybrid Securities

Details of hybrid securities classified as equity as of September 30, 2022 and December 31, 2021, are as follows:

(In millions of Korean won)


Hybrid securities	Issuance date	Maturity	Interest rate (%) as of September 30, 2022		September 30, 2022		December 31, 2021
The 1-1^st	May 2, 2019	Perpetual bond		3.23	W	349,309	W	349,309
The 1-2^nd	May 2, 2019	Perpetual bond		3.44		49,896		49,896
The 2-1^st	May 8, 2020	Perpetual bond		3.30		324,099		324,099
The 2-2^nd	May 8, 2020	Perpetual bond		3.43		74,812		74,812
The 3-1^st	Jul. 14, 2020	Perpetual bond		3.17		369,099		369,099
The 3-2^nd	Jul. 14, 2020	Perpetual bond		3.38		29,922		29,922
The 4-1^st	Oct. 20, 2020	Perpetual bond		3.00		433,996		433,996
The 4-2^nd	Oct. 20, 2020	Perpetual bond		3.28		64,855		64,855
The 5-1^st	Feb. 19, 2021	Perpetual bond		2.67		419,071		419,071
The 5-2^nd	Feb. 19, 2021	Perpetual bond		2.87		59,862		59,862
The 5-3^rd	Feb. 19, 2021	Perpetual bond		3.28		119,727		119,727
The 6-1^st	May 28, 2021	Perpetual bond		3.20		165,563		165,563
The 6-2^nd	May 28, 2021	Perpetual bond		3.60		109,708		109,708
The 7-1^st	Oct. 8, 2021	Perpetual bond		3.57		208,468		208,468
The 7-2^nd	Oct. 8, 2021	Perpetual bond		3.80		59,834		59,834
The 8-1^st	Feb. 16, 2022	Perpetual bond		4.00		442,970		—
The 8-2^nd	Feb. 16, 2022	Perpetual bond		4.30		155,626		—
The 9-1^st	May 12, 2022	Perpetual bond		4.68		478,829		—
The 9-2^nd	May 12, 2022	Perpetual bond		4.97		19,906		—

KB Financial Group Inc. and Subsidiaries

Notes to the Consolidated Interim Financial Statements

September 30, 2022 and 2021 (Unaudited), and December 31, 2021

20.2 Hybrid Securities (cont’d)

Hybrid

securities

Issuance date

Maturity

Interest rate (%)
as of
September 30, 2022

September 30,
2022

December 31,
2021

The 10-1^st

Aug. 26, 2022

Perpetual bond

4.90

407,936

—

The 10-2^nd

Aug. 26, 2022

Perpetual bond

5.15

70,819

—

The 10-3^rd

Aug. 26, 2022

Perpetual bond

5.30

19,944

—

4,434,251

2,838,221

The above hybrid securities are early redeemable by the Group after 5 or 7 or 10 years from the issuance date. On the other hand, hybrid securities of W 873,908 million issued by Kookmin Bank, hybrid securities of W 84,963 million issued by KB Securities Co., Ltd., and hybrid securities of W 49,800 million issued by KB Life Insurance Co., Ltd. are recognized as non-controlling interests and are early redeemable after 5 years from the issuance date and each interest payment date thereafter.

20.3 Capital Surplus

Details of capital surplus as of September 30, 2022 and December 31, 2021, are as follows:


(In millions of Korean won)	September 30, 2022			December 31, 2021
Paid-in capital in excess of par value	W	13,190,274		W	13,190,274
Losses on sales of treasury shares		(481,332	)		(481,332	)
Other capital surplus		4,219,856			4,219,356
Consideration for exchange right of exchangeable bonds		11,933			11,933

	W	16,940,731		W	16,940,231

20.4 Accumulated Other Comprehensive Income (Loss)

Details of accumulated other comprehensive income (loss) as of September 30, 2022 and December 31, 2021, are as follows:


(In millions of Korean won)	September 30, 2022			December 31, 2021
Remeasurements of net defined benefit liabilities	W	(369,600	)	W	(328,392	)
Currency translation differences		776,478			96,534
Gains (losses) on financial instruments at fair value through other comprehensive income		(3,163,543	)		918,927
Share of other comprehensive loss of associates and joint ventures		(3,377	)		(2,980	)
Losses on cash flow hedging instruments		(22,473	)		(7,733	)
Losses on hedging instruments of net investments in foreign operations		(268,995	)		(35,658	)
Other comprehensive loss arising from separate account		(274,587	)		(55,116	)
Fair value changes of financial liabilities designated at fair value through profit or loss due to own credit risk		22,931			2,208
Gains on overlay adjustment		125,556			459,484
Assets of a disposal group held for sale		—			7,671

	W	(3,177,610	)	W	1,054,945

KB Financial Group Inc. and Subsidiaries

Notes to the Consolidated Interim Financial Statements

September 30, 2022 and 2021 (Unaudited), and December 31, 2021

20.5 Retained Earnings

20.5.1 Details of retained earnings as of September 30, 2022 and December 31, 2021, are as follows:


(In millions of Korean won)	September 30, 2022		December 31, 2021
Legal reserves *	W	839,234	W	695,347
Voluntary reserves		982,000		982,000
Unappropriated retained earnings		26,493,084		23,995,468

	W	28,314,318	W	25,672,815

With respect to the allocation of net profit earned in a fiscal term, the Parent Company must set aside in its legal reserve an amount equal to at least 10% of its profit after tax as reported in the financial statements, each time it pays dividends on its net profits earned until its legal reserve reaches the aggregate amount of its paid-in capital in accordance with Article 53 of the Financial Holding Company Act. This reserve is not available for the payment of cash dividends, but may be transferred to share capital, or used to reduce accumulated deficit.

20.5.2 Regulatory reserve for credit losses

Measurement and disclosure of regulatory reserve for credit losses are required in accordance with Articles 26 through 28 of Regulations on Supervision of Financial Holding Companies.

20.5.2.1 Details of regulatory reserve for credit losses as of September 30, 2022 and December 31, 2021, are as follows:


(In millions of Korean won)	September 30, 2022		December 31, 2021
Regulatory reserve for credit losses attributable to:
Shareholders of the Parent Company	W	4,490,579	W	4,116,579
Non-controlling interests		164,280		67,042

	W	4,654,859	W	4,183,621

20.5.2.2 Regulatory reserve for credit losses estimated to be appropriated and adjusted profit after provision of regulatory reserve for credit losses for the three-month and nine-month periods ended September 30, 2022 and 2021, are as follows:


(In millions of Korean won, except for per share amounts)	2022				2021
	Three months		Nine months		Three months		Nine months
Provision of regulatory reserve for credit losses	W	164,057	W	374,000	W	199,622	W	489,114
Adjusted profit after provision of regulatory reserve for credit losses^1,2		1,072,754		3,568,237		1,078,706		3,231,861
Adjusted basic earnings per share after provision of regulatory reserve for credit losses¹		2,753		9,158		2,769		8,295
Adjusted diluted earnings per share after provision of regulatory reserve for credit losses¹		2,693		8,948		2,711		8,118

¹	Adjusted profit after provision of regulatory reserve for credit losses is not based on Korean IFRS. It is calculated by reflecting provision of regulatory reserve for credit losses before tax to the net profit attributable to shareholders of the Parent Company.

²	After deducting dividends on hybrid securities

KB Financial Group Inc. and Subsidiaries

Notes to the Consolidated Interim Financial Statements

September 30, 2022 and 2021 (Unaudited), and December 31, 2021

20.6 Treasury Shares

Changes in treasury shares for the nine-month periods ended September 30, 2022 and 2021, are as follows:


(In millions of Korean won and in number of shares)	2022
	Beginning		Acquisition		Retirement			Ending
Number of treasury shares*		26,173,585		—		(6,910,852	)		19,262,733
Carrying amount	W	1,136,188	W	—	W	(300,000	)	W	836,188

(In millions of Korean won and in number of shares)	2021
	Beginning		Acquisition		Retirement			Ending
Number of treasury shares*		26,173,585		—		—			26,173,585
Carrying amount	W	1,136,188	W	—	W	—		W	1,136,188

*	5 million treasury shares are deposited at the Korea Securities Depository for the exchange of exchangeable bonds.

21. Net Interest Income

Details of interest income, interest expense, and net interest income for the three-month and nine-month periods ended September 30, 2022 and 2021, are as follows:


(In millions of Korean won)	2022				2021
	Three months		Nine months		Three months		Nine months
Interest income
Due from financial institutions measured at fair value through profit or loss	W	619	W	2,220	W	504	W	795
Securities measured at fair value through profit or loss		206,487		571,477		143,274		430,668
Loans measured at fair value through profit or loss		4,636		9,879		2,689		6,985
Securities measured at fair value through other comprehensive income		280,628		715,698		195,280		581,866
Loans measured at fair value through other comprehensive income		3,298		6,506		1,111		3,462
Due from financial institutions measured at amortized cost		43,247		87,328		13,107		46,777
Securities measured at amortized cost		287,856		769,622		199,016		555,398
Loans measured at amortized cost		4,464,537		11,971,901		3,206,202		9,331,238
Others		80,912		242,440		62,852		179,499

		5,372,220		14,377,071		3,824,035		11,136,688

Interest expense
Deposits		1,151,836		2,685,300		531,863		1,602,273
Borrowings		358,752		782,725		124,164		363,685
Debentures		436,643		1,112,296		293,005		857,689
Others		59,308		135,250		20,722		57,687

		2,006,539		4,715,571		969,754		2,881,334

Net interest income	W	3,365,681	W	9,661,500	W	2,854,281	W	8,255,354

KB Financial Group Inc. and Subsidiaries

Notes to the Consolidated Interim Financial Statements

September 30, 2022 and 2021 (Unaudited), and December 31, 2021

22. Net Fee and Commission Income

Details of fee and commission income, fee and commission expense, and net fee and commission income for the three-month and nine-month periods ended September 30, 2022 and 2021, are as follows:


(In millions of Korean won)	2022				2021
	Three months		Nine months		Three months		Nine months
Fee and commission income
Banking activity fees	W	45,829	W	135,545	W	43,889	W	133,676
Lending activity fees		21,043		61,561		20,675		63,835
Credit card and debit card related fees		376,076		1,126,490		370,963		1,115,600
Agent activity fees		72,082		162,836		54,216		159,263
Trust and other fiduciary fees		84,351		254,531		98,592		318,614
Fund management related fees		35,008		105,283		44,873		133,254
Acceptances and guarantees fees		15,968		49,283		11,913		35,976
Foreign currency related fees		74,600		211,410		57,135		178,839
Securities agency fees		32,693		99,395		44,363		139,128
Other business account commission on consignment		7,422		28,638		8,623		30,894
Commissions received on securities business		125,084		524,810		224,873		704,816
Lease fees		258,250		740,231		229,265		657,089
Others		119,728		416,273		127,919		320,102

		1,268,134		3,916,286		1,337,299		3,991,086

Fee and commission expense
Trading activity related fees *		10,192		32,749		16,863		41,831
Lending activity fees		11,685		33,419		10,816		32,072
Credit card and debit card related fees		214,871		599,422		208,810		608,467
Outsourcing related fees		59,776		165,827		54,549		154,450
Foreign currency related fees		20,683		54,066		16,974		39,208
Others		137,062		427,060		117,960		371,132

		454,269		1,312,543		425,972		1,247,160

Net fee and commission income	W	813,865	W	2,603,743	W	911,327	W	2,743,926

*	Fees from financial instruments at fair value through profit or loss

KB Financial Group Inc. and Subsidiaries

Notes to the Consolidated Interim Financial Statements

September 30, 2022 and 2021 (Unaudited), and December 31, 2021

23. Net Gains or Losses on Financial Instruments at Fair Value through Profit or Loss

23.1 Net Gains or Losses on Financial Instruments at Fair Value through Profit or Loss

Net gains or losses on financial instruments at fair value through profit or loss include dividend income, gains or losses arising from changes in fair value, and gains or losses arising from sales and redemptions. Details of net gains or losses on financial instruments at fair value through profit or loss for the three-month and nine-month periods ended September 30, 2022 and 2021, are as follows:


(In millions of Korean won)	2022						2021
	Three months			Nine months			Three months			Nine months
Gains on financial instruments at fair value through profit or loss
Financial assets at fair value through profit or loss:
Debt securities	W	433,339		W	1,424,031		W	438,540		W	1,401,864
Equity securities		65,137			343,434			116,858			479,409

		498,476			1,767,465			555,398			1,881,273

Derivatives held for trading:
Interest rate		4,082,999			13,599,284			1,185,873			4,376,242
Currency		11,061,148			19,116,224			3,529,324			6,877,226
Stock or stock index		464,731			1,492,270			235,639			1,133,822
Credit		35,459			88,370			6,056			18,735
Commodity		7,509			24,406			4,907			17,133
Others		19,956			92,155			14,268			123,500

		15,671,802			34,412,709			4,976,067			12,546,658

Financial liabilities at fair value through profit or loss		58,162			201,712			59,027			101,389
Other financial instruments		607			698			—			6,753

		16,229,047			36,382,584			5,590,492			14,536,073

Losses on financial instruments at fair value through profit or loss
Financial assets at fair value through profit or loss:
Debt securities		738,721			2,471,096			275,281			977,130
Equity securities		112,181			461,366			142,884			350,594

		850,902			2,932,462			418,165			1,327,724

Derivatives held for trading:
Interest rate		3,673,918			12,488,158			1,180,854			4,257,082
Currency		11,388,623			19,611,712			3,538,456			6,805,982
Stock or stock index		1,067,265			2,638,364			428,456			1,232,477
Credit		29,226			72,287			5,106			12,721
Commodity		8,364			23,510			4,880			11,647
Others		75,646			312,634			19,336			124,096

		16,243,042			35,146,665			5,177,088			12,444,005

Financial liabilities at fair value through profit or loss		14,605			48,792			(919	)		65,509
Other financial instruments		571			631			50			6,830

		17,109,120			38,128,550			5,594,384			13,844,068

Net gains (losses) on financial instruments at fair value through profit or loss	W	(880,073	)	W	(1,745,966	)	W	(3,892	)	W	692,005

KB Financial Group Inc. and Subsidiaries

Notes to the Consolidated Interim Financial Statements

September 30, 2022 and 2021 (Unaudited), and December 31, 2021

23.2 Net Gains or Losses on Financial Instruments Designated at Fair Value through Profit or Loss

Net gains or losses on financial instruments designated at fair value through profit or loss include gains or losses arising from changes in fair value, and gains or losses arising from sales and redemptions. Details of net gains or losses on financial instruments designated at fair value through profit or loss for the three-month and nine-month periods ended September 30, 2022 and 2021, are as follows:


(In millions of Korean won)	2022				2021
	Three months		Nine months		Three months		Nine months
Gains on financial instruments designated at fair value through profit or loss
Financial liabilities designated at fair value through profit or loss	W	637,788	W	1,485,550	W	212,604	W	535,891

		637,788		1,485,550		212,604		535,891

Losses on financial instruments designated at fair value through profit or loss
Financial liabilities designated at fair value through profit or loss		137,876		265,738		23,632		525,055

		137,876		265,738		23,632		525,055

Net gains (losses) on financial instruments designated at fair value through profit or loss	W	499,912	W	1,219,812	W	188,972	W	10,836

100

KB Financial Group Inc. and Subsidiaries

Notes to the Consolidated Interim Financial Statements

September 30, 2022 and 2021 (Unaudited), and December 31, 2021

24. Net Other Operating Income and Expenses

Details of other operating income and expenses for the three-month and nine-month periods ended September 30, 2022 and 2021, are as follows:


(In millions of Korean won)	2022						2021
	Three months			Nine months			Three months			Nine months
Other operating income
Gains on financial instruments at fair value through other comprehensive income:
Gains on redemption of financial instruments at fair value through other comprehensive income	W	11		W	14		W	—		W	2
Gains on disposal of financial instruments at fair value through other comprehensive income		11,083			19,535			18,527			109,284

		11,094			19,549			18,527			109,286

Gains on financial assets at amortized cost:
Gains on sale of loans measured at amortized cost		19,366			77,691			25,247			116,590
Gains on disposal of securities measured at amortized cost		28			110			2			29

		19,394			77,801			25,249			116,619

Gains on loans measured at fair value through other comprehensive income:
Gains on sale of loans measured at fair value through other comprehensive income		—			—			—			226

		—			—			—			226

Gains on foreign exchange transactions		4,086,787			8,245,160			1,253,983			3,005,612
Dividend income		4,099			31,654			1,722			31,895
Others		507,297			1,480,666			235,091			601,771

		4,628,671			9,854,830			1,534,572			3,865,409

Other operating expenses
Losses on financial instruments at fair value through other comprehensive income:
Losses on redemption of financial instruments at fair value through other comprehensive income		807			2,360			719			850
Losses on disposal of financial instruments at fair value through other comprehensive income		49,482			135,655			27,948			63,780

		50,289			138,015			28,667			64,630

Losses on financial assets at amortized cost:
Losses on sale of loans measured at amortized cost		51,423			57,891			3,150			7,201
Losses on redemption of securities measured at amortized cost		—			—			1			6
Losses on disposal of securities measured at amortized cost		—			—			—			2

		51,423			57,891			3,151			7,209

Losses on foreign exchanges transactions		3,488,787			7,363,761			1,098,486			2,771,578
Deposit insurance fee		151,531			446,024			128,408			416,171
Credit guarantee fund fee		72,488			207,189			66,829			194,990
Depreciation expenses of operating lease assets		172,586			501,774			156,673			441,044
Others		846,780			2,230,834			478,239			1,272,674

		4,833,884			10,945,488			1,960,453			5,168,296

Net other operating expenses	W	(205,213	)	W	(1,090,658	)	W	(425,881	)	W	(1,302,887	)

101

KB Financial Group Inc. and Subsidiaries

Notes to the Consolidated Interim Financial Statements

September 30, 2022 and 2021 (Unaudited), and December 31, 2021

25. General and Administrative Expenses

25.1 Details of general and administrative expenses for the three-month and nine-month periods ended September 30, 2022 and 2021, are as follows:


(In millions of Korean won)	2022				2021
	Three months		Nine months		Three months		Nine months
Expenses related to employee
Employee benefits - salaries	W	744,944	W	2,239,585	W	752,038	W	2,221,001
Employee benefits - others		238,189		726,824		227,129		712,380
Post-employment benefits - defined benefit plans		62,664		186,063		60,792		178,822
Post-employment benefits - defined contribution plans		9,265		29,294		7,996		25,069
Termination benefits		3,080		6,641		628		31,928
Share-based payments		2,447		26,024		15,579		83,373

		1,060,589		3,214,431		1,064,162		3,252,573

Depreciation and amortization		222,105		642,086		213,808		621,071

Other general and administrative expenses
Rental expense		31,254		88,235		28,339		86,921
Tax and dues		63,940		222,384		57,262		202,980
Communication		14,326		44,681		13,415		41,486
Electricity and utilities		10,433		27,089		10,561		27,710
Publication		2,765		8,171		3,180		9,771
Repairs and maintenance		14,216		37,186		12,009		36,511
Vehicle		5,369		14,373		4,290		12,150
Travel		6,275		16,528		2,881		9,342
Training		9,087		23,365		6,872		25,463
Service fees		63,110		181,813		53,834		171,537
Electronic data processing expenses		99,973		277,961		77,392		225,506
Advertising		49,223		142,556		48,197		129,449
Others		81,570		239,280		68,270		205,027

		451,541		1,323,622		386,502		1,183,853

	W	1,734,235	W	5,180,139	W	1,664,472	W	5,057,497

102

KB Financial Group Inc. and Subsidiaries

Notes to the Consolidated Interim Financial Statements

September 30, 2022 and 2021 (Unaudited), and December 31, 2021

25.2 Share-based Payments

25.2.1 Stock grants

The Group changed the scheme of share-based payments awarded to executives and employees from stock options to stock grants in November 2007. The stock grants award program is an incentive plan that sets, on grant date, the maximum number of shares that can be awarded. Actual shares to be granted are determined in accordance with achievement of pre-set performance targets over the vesting period.

25.2.1.1 Details of stock grants linked to long-term performance as of September 30, 2022, are as follows:


(In number of shares)	Grant date	Number of granted shares ¹		Vesting conditions ²
KB Financial Group Inc.
Series 27	Jun. 16, 2020		184	Services fulfillment, market performance ³30%, and non-market performance ⁴70%
Series 28	Nov. 21, 2020		68,135	Services fulfillment, market performance ³ 35%, and non-market performance ⁵ 65%
Series 29	Jan. 1, 2021		79,840	Services fulfillment, market performance ³ 0~30%, and non-market performance ⁴ 70~100%
Series 30	Apr. 1, 2021		3,069	Services fulfillment, market performance ³ 30%, and non-market performance ⁴ 70%
Series 33	Jan. 1, 2022		70,050	Services fulfillment, market performance ³ 0~30%, and non-market performance ⁴ 70~100%
Series 34	Feb. 1, 2022		654	Services fulfillment, market performance ³ 30%, and non-market performance ⁴ 70%
Series 35	May 27, 2022		6,126	Services fulfillment, market performance ³ 30%, and non-market performance ⁴ 70%
Deferred grant in 2015			4,243	Satisfied
Deferred grant in 2016			3,533	Satisfied
Deferred grant in 2017			1,127	Satisfied
Deferred grant in 2018			1,766	Satisfied
Deferred grant in 2019			7,598	Satisfied
Deferred grant in 2020			37,334	Satisfied
Deferred grant in 2021			27,204	Satisfied

			310,863

Kookmin Bank
Series 80	Mar. 1, 2020		7,982	Services fulfillment, market performance ³ 30~50%, and non-market performance ⁴ 50~70%
Series 81	Jan. 1, 2021		140,093	Services fulfillment, market performance ³ 0~30%, and non-market performance ⁴ 70~100%
Series 82	Mar. 1, 2021		18,202	Services fulfillment, market performance ³ 0~30%, and non-market performance ⁴ 70~100%
Series 83	Apr. 1, 2021		15,278	Services fulfillment, market performance ³ 0~30%, and non-market performance ⁴ 70~100%
Series 85	Jan. 1, 2022		341,056	Services fulfillment, market performance ³ 30~50%, and non-market performance ⁴ 50~70% Services fulfillment, market performance ³ 30%, and EPS & Asset Quality ⁶ 70%
Series 86	Feb. 1, 2022		3,813	Services fulfillment, market performance ³ 0~30%, and non-market performance ⁴ 70~100%
Series 87	Mar. 1, 2022		6,199	Services fulfillment, market performance ³ 0~30%, and non-market performance ⁴ 70~100%
Series 88	Mar. 14, 2022		5,891	Services fulfillment, market performance ³ 0~30%, and non-market performance ⁴ 70~100%

103

KB Financial Group Inc. and Subsidiaries

Notes to the Consolidated Interim Financial Statements

September 30, 2022 and 2021 (Unaudited), and December 31, 2021

25.2.1.1 Details of stock grants linked to long-term performance as of September 30, 2022, are as follows: (cont’d)


(In number of shares)	Grant date	Number of granted shares ¹		Vesting conditions ²
Series 89	May 26, 2022		7,849	Services fulfillment, market performance ³ 0~30%, and non-market performance ⁴ 70~100%
Series 90	Jun. 1, 2022		7,079	Services fulfillment, market performance ³ 0~30%, and non-market performance ⁴ 70~100%
Series 91	Jul. 18, 2022		10,334	Services fulfillment, market performance ³ 0~30%, and non-market performance ⁴ 70~100%
Series 92	Aug. 24, 2022		7,281	Services fulfillment, market performance ³ 0~30%, and non-market performance ⁴ 70~100%
Deferred grant in 2016			2,426	Satisfied
Deferred grant in 2017			4,582	Satisfied
Deferred grant in 2018			2,287	Satisfied
Deferred grant in 2019			32,756	Satisfied
Deferred grant in 2020			53,502	Satisfied
Deferred grant in 2021			156,939	Satisfied

			823,549

Other subsidiaries
Stock granted in 2010			106	Services fulfillment, market performance ³ 0~50%, and non-market performance ⁴ 50~100%
Stock granted in 2011			146
Stock granted in 2012			420
Stock granted in 2013			544
Stock granted in 2014			1,028
Stock granted in 2015			2,374
Stock granted in 2016			3,749
Stock granted in 2017			14,006
Stock granted in 2018			26,572
Stock granted in 2019			42,273
Stock granted in 2020			165,810
Stock granted in 2021			505,328
Stock granted in 2022			261,463

			1,023,819

			2,158,231

¹	Granted shares represent the total number of shares initially granted to executives and employees who have residual shares as of September 30, 2022 (Deferred grants are residual shares vested as of September 30, 2022).

Executives and employees were given the right of choice about the timing of the deferred payment (after the date of retirement), payment ratio, and payment period. Accordingly, a certain percentage of the granted shares is deferred for up to five years after the date of retirement after the deferred grant has been confirmed.

³	Relative TSR (Total Shareholders Return): [(Fair value at the end of the contract—Fair value at the beginning of the contract) + (Total amount of dividend per share paid during the contract period)] / Fair value at the beginning of the contract

⁴	Performance results of company and employee

⁵	EPS (Earnings Per Share), Asset Quality, HCROI (Human Capital Return on Investment), Profit from non-banking segments

⁶	EPS, Asset Quality

104

KB Financial Group Inc. and Subsidiaries

Notes to the Consolidated Interim Financial Statements

September 30, 2022 and 2021 (Unaudited), and December 31, 2021

25.2.1.2 Details of stock grants linked to short-term performance as of September 30, 2022, are as follows:


(In number of shares)	Estimated number of vested shares *		Vesting conditions
KB Financial Group Inc.
Stock granted in 2015		3,725		Satisfied
Stock granted in 2016		4,223		Satisfied
Stock granted in 2017		1,401		Satisfied
Stock granted in 2018		760		Satisfied
Stock granted in 2019		9,354		Satisfied
Stock granted in 2020		24,408		Satisfied
Stock granted in 2021		35,497		Satisfied
Stock granted in 2022		41,090		Proportional to service period
Kookmin Bank
Stock granted in 2015		1,292		Satisfied
Stock granted in 2016		4,875		Satisfied
Stock granted in 2017		1,998		Satisfied
Stock granted in 2018		2,109		Satisfied
Stock granted in 2019		43,780		Satisfied
Stock granted in 2020		92,576		Satisfied
Stock granted in 2021		101,308		Satisfied
Stock granted in 2022		151,697		Proportional to service period
Other subsidiaries
Stock granted in 2015		5,762		Satisfied
Stock granted in 2016		25,831		Satisfied
Stock granted in 2017		46,223		Satisfied
Stock granted in 2018		99,594		Satisfied
Stock granted in 2019		243,130		Satisfied
Stock granted in 2020		433,210		Satisfied
Stock granted in 2021		610,167		Satisfied
Stock granted in 2022		293,959		Proportional to service period

		2,277,969

25.2.1.3 The accrued expenses for share-based payments related to stock grants are W 155,555 million and W 193,023 million as of September 30, 2022 and December 31, 2021, respectively, and the compensation costs amounting to W 26,160 million and W 83,349 million were recognized for the nine-month periods ended September 30, 2022 and 2021, respectively.

105

KB Financial Group Inc. and Subsidiaries

Notes to the Consolidated Interim Financial Statements

September 30, 2022 and 2021 (Unaudited), and December 31, 2021

25.2.2 Mileage stock

25.2.2.1 Details of mileage stock as of September 30, 2022, are as follows:


(In number of shares)	Grant date	Number of granted shares¹		Expected exercise period (years)²		Remaining shares
Stock granted in 2019
	Nov. 1, 2019		119		0.00~0.34		48
	Nov. 8, 2019		14		0.00~0.36		6
	Dec. 5, 2019		56		0.00~0.43		41
	Dec. 6, 2019		84		0.00~0.43		57
	Dec. 31, 2019		87		0.00~0.50		43
Stock granted in 2020
	Jan. 18, 2020		28,645		0.00~0.55		15,883
	May 12, 2020		46		0.00~0.87		43
	Jun. 30, 2020		206		0.00~1.00		176
	Aug. 26, 2020		40		0.00~1.16		27
	Oct. 29, 2020		160		0.00~1.33		133
	Nov. 6, 2020		45		0.00~1.35		37
	Nov. 30, 2020		35		0.00~1.42		34
	Dec. 2, 2020		57		0.00~1.42		44
	Dec. 4, 2020		154		0.00~1.43		128
	Dec. 30, 2020		88		0.00~1.50		64
Stock granted in 2021
	Jan. 15, 2021		28,156		0.00~1.55		19,092
	Apr. 5, 2021		89		0.00~1.76		53
	Jul. 1, 2021		54		0.00~2.00		54
	Jul. 2, 2021		11		0.00~2.01		11
	Jul. 27, 2021		70		0.00~2.07		70
	Nov. 1, 2021		71		0.00~2.34		71
	Nov. 16, 2021		53		0.00~2.38		50
	Dec. 3, 2021		91		0.00~2.43		89
	Dec. 6, 2021		87		0.00~2.44		87
	Dec. 30, 2021		76		0.00~2.50		76
Stock granted in 2022
	Jan. 14, 2022		20,909		0.00~2.54		19,886
	Apr. 4, 2022		65		0.00~2.76		65
	Apr. 19, 2022		33		0.00~2.80		33
	Jul. 1, 2022		62		0.00~3.00		62
	Aug. 3, 2022		62		0.00~3.09		62
	Aug. 9, 2022		80		0.00~3.11		76

			79,805				56,601

Mileage stock is exercisable for two years after one year from the grant date at the closing price of the end of the previous month. However, mileage stock can be exercised at the closing price of the end of the previous month on the date of occurrence of retirement or transfer despite a one-year grace period.

²	Assessed based on the stock price as of September 30, 2022. These shares are vested immediately at grant date.

106

KB Financial Group Inc. and Subsidiaries

Notes to the Consolidated Interim Financial Statements

September 30, 2022 and 2021 (Unaudited), and December 31, 2021

25.2.2.2 The accrued expenses for share-based payments related to mileage stock are W 2,473 million and W 3,465 million as of September 30, 2022 and December 31, 2021, respectively. The compensation costs amounting to W 564 million and W 2,115 million were recognized as expenses for the nine-month periods ended September 30, 2022 and 2021, respectively.

25.2.3 Long-term share-based payments

The Group calculates the short-term performance bonus of executives of Prudential Life Insurance Company of Korea Ltd. based on the result of performance evaluation as of the grant date and defers the bonus for three years and pays it in cash reflecting the stock price of KB Financial Group Inc. at that time.

25.2.3.1 Details of long-term share-based payments as of September 30, 2022, are as follows:

(In number of shares)

Grant date

Vested shares

Expected exercise
period (years)

Vesting
condition

Granted in 2020

2020

13,402

1.25

Services
fulfillment

25.2.3.2 The accrued expenses for long-term share-based payments are W 554 million and W 690 million as of September 30, 2022 and December 31, 2021, respectively. The compensation costs amounting to W 136 million were reserved, and W 24 million were recognized as expenses for the nine-month periods ended September 30, 2022 and 2021, respectively.

107

KB Financial Group Inc. and Subsidiaries

Notes to the Consolidated Interim Financial Statements

September 30, 2022 and 2021 (Unaudited), and December 31, 2021

26. Income Tax Expense

Details of income tax expense for the nine-month periods ended September 30, 2022 and 2021, are as follows:


(In millions of Korean won)	2022			2021
Income tax payable
Current income tax expense	W	1,692,462		W	1,367,775
Adjustments of income tax of prior years recognized in current tax		(114,592	)		6,722

		1,577,870			1,374,497

Changes in deferred income tax assets and liabilities		(1,987,678	)		315,845

Income tax recognized directly in equity and others
Remeasurements of net defined benefit liabilities		15,998			3,424
Currency translation differences		(32,987	)		(16,350	)
Net gains or losses on financial assets at fair value through other comprehensive income		1,556,587			(213,509	)
Share of other comprehensive income or loss of associates and joint ventures		100			(108	)
Gains or losses on cash flow hedging instruments		(48,602	)		(20,060	)
Gains or losses on hedging instruments of net investments in foreign operations		85,588			23,838
Other comprehensive income or loss arising from separate account		83,247			18,446
Fair value changes of financial liabilities designated at fair value through profit or loss due to own credit risk		(7,861	)		(1,988	)
Net gains or losses on overlay adjustment		127,897			(40,949	)

		1,779,967			(247,256	)

Others		7,324			(4,915	)

Income tax expense	W	1,377,483		W	1,438,171

27. Dividends

The annual dividends to the shareholders of the Parent Company for the year ended December 31, 2021, amounting to W 853,299 million (W 2,190 per share) were declared at the annual general shareholders’ meeting on March 25, 2022 and paid in April 11, 2022. According to the resolution of the board of directors on April 22, 2022, the quarterly dividend per share of W 500 (total dividend: W 194,817 million) with dividend record date of March 31, 2022 were paid on May 9, 2022, and the resolution of the board of directors on July 21, 2022, the quarterly dividend per share of W 500 (total dividend: W 194,817 million) with dividend record date of June 30, 2022 were paid on August 8, 2022. Meanwhile, the annual dividends and quarterly dividends paid in 2021 were W 689,653 million (W 1,770 per share) and W 292,226 million (W 750 per share), respectively.

108

KB Financial Group Inc. and Subsidiaries

Notes to the Consolidated Interim Financial Statements

September 30, 2022 and 2021 (Unaudited), and December 31, 2021

28. Accumulated Other Comprehensive Income (Loss)

Changes in accumulated other comprehensive income (loss) for the nine-month periods ended September 30, 2022 and 2021, are as follows:


(In millions of Korean won)	2022
	Beginning			Changes except for reclassification			Reclassification to profit or loss			Transfer within equity			Tax effect			Ending
Remeasurements of net defined benefit liabilities	W	(328,392	)	W	(57,206	)	W	—		W	—		W	15,998		W	(369,600	)
Currency translation differences		96,534			712,931			—			—			(32,987	)		776,478
Gains (losses) on financial instruments at fair value through other comprehensive income		918,927			(5,704,500	)		399,512			(334,069	)		1,556,587			(3,163,543	)
Share of other comprehensive loss of associates and joint ventures		(2,980	)		(497	)		—			—			100			(3,377	)
Gains (losses) on cash flow hedging instruments		(7,733	)		139,039			(105,177	)		—			(48,602	)		(22,473	)
Gains (losses) on hedging instruments of net investments in foreign operations		(35,658	)		(318,925	)		—			—			85,588			(268,995	)
Other comprehensive loss arising from separate account		(55,116	)		(302,347	)		(371	)		—			83,247			(274,587	)
Fair value changes of financial liabilities designated at fair value through profit or loss due to own credit risk		2,208			28,584			—			—			(7,861	)		22,931
Gains (losses) on overlay adjustment		459,484			(396,646	)		(65,179	)		—			127,897			125,556
Assets of a disposal group held for sale		7,671			(7,671	)		—			—			—			—

	W	1,054,945		W	(5,907,238	)	W	228,785		W	(334,069	)	W	1,779,967		W	(3,177,610	)

109

KB Financial Group Inc. and Subsidiaries

Notes to the Consolidated Interim Financial Statements

September 30, 2022 and 2021 (Unaudited), and December 31, 2021

28. Accumulated Other Comprehensive Income (Loss) (cont’d)


(In millions of Korean won)	2021
	Beginning			Changes except for reclassification			Reclassification to profit or loss			Transfer within equity		Tax effect			Ending
Remeasurements of net defined benefit liabilities	W	(282,650	)	W	(8,207	)	W	—		W	—	W	3,424		W	(287,433	)
Currency translation differences		(131,113	)		244,984			1,995			—		(16,350	)		99,516
Gains on financial instruments at fair value through other comprehensive income		717,230			504,168			(28,826	)		305,016		(213,509	)		1,284,079
Share of other comprehensive loss of associates and joint ventures		(3,529	)		3,171			(2,681	)		—		(108	)		(3,147	)
Gains (losses) on cash flow hedging instruments		(28,597	)		78,952			(46,005	)		—		(20,060	)		(15,710	)
Gains (losses) on hedging instruments of net investments in foreign operations		22,277			(82,185	)		5,195			—		23,838			(30,875	)
Other comprehensive income (loss) arising from separate account		8,698			(63,451	)		(3,625	)		—		18,446			(39,932	)
Fair value changes of financial liabilities designated at fair value through profit or loss due to own credit risk		(11,507	)		7,229			—			—		(1,988	)		(6,266	)
Gains (losses) on overlay adjustment		339,202			223,764			(72,596	)		—		(40,949	)		449,421

	W	630,011		W	908,425		W	(146,543	)	W	305,016	W	(247,256	)	W	1,449,653

110

KB Financial Group Inc. and Subsidiaries

Notes to the Consolidated Interim Financial Statements

September 30, 2022 and 2021 (Unaudited), and December 31, 2021

29. Earnings per Share

29.1 Basic Earnings per Share

Basic earnings per share is calculated by dividing profit attributable to ordinary equity holders of the Parent Company by the weighted average number of ordinary shares outstanding.

29.1.1 Weighted average number of ordinary shares outstanding


(In number of shares)	2022						2021
	Three months			Nine months			Three months			Nine months
Number of issued ordinary shares (A)		408,897,068			408,897,068			415,807,920			415,807,920
Number of treasury shares (B) *		(19,262,733	)		(19,262,733	)		(26,173,585	)		(26,173,585	)

Weighted average number of ordinary shares outstanding (C=A+B)		389,634,335			389,634,335			389,634,335			389,634,335

*	The number of treasury shares have excluded the initial redemption of treasury shares from February 14, 2022, and the 2nd redemption from August 1, 2022.

29.1.2 Basic earnings per share


(In Korean won and in number of shares)	2022
	Three months			Nine months
Profit attributable to shareholders of the Parent Company	W	1,271,326,523,505		W	4,027,935,105,841
Deduction: Dividends on hybrid securities		(34,514,700,000	)		(85,698,100,000	)

Profit attributable to the ordinary equity holders of the Parent Company (A)		1,236,811,823,505			3,942,237,005,841
Weighted average number of ordinary shares outstanding (B)		389,634,335			389,634,335

Basic earnings per share (A/B)	W	3,174		W	10,118


(In Korean won and in number of shares)	2021
	Three months			Nine months
Profit attributable to shareholders of the Parent Company	W	1,298,425,798,924		W	3,772,414,984,738
Deduction: Dividends on hybrid securities		(20,097,875,000	)		(51,439,625,000	)

Profit attributable to the ordinary equity holders of the Parent Company (A)		1,278,327,923,924			3,720,975,359,738
Weighted average number of ordinary shares outstanding (B)		389,634,335			389,634,335

Basic earnings per share (A/B)	W	3,281		W	9,550

29.2 Diluted Earnings per Share

Diluted earnings per share is calculated through increasing the weighted average number of ordinary shares outstanding by the weighted average number of additional ordinary shares that would have been outstanding assuming the conversion of all dilutive potential ordinary shares. The Group has dilutive potential ordinary shares such as stock grants and ordinary share exchange right of exchangeable bonds.

A calculation is done to determine the number of shares that could have been acquired at fair value (determined as the average market share price during the period) based on the monetary value of stock grants. The number of shares calculated above is compared with the number of shares that would have been issued assuming the settlement of stock grants.

Exchangeable bonds are included in potential ordinary shares from the exercisable date of the exchange right, and interest expense after tax for the period is added to profit for diluted earnings per share.

111

KB Financial Group Inc. and Subsidiaries

Notes to the Consolidated Interim Financial Statements

September 30, 2022 and 2021 (Unaudited), and December 31, 2021

29.2.1 Adjusted profit for diluted earnings per share


(In Korean won)	2022
	Three months			Nine months
Profit attributable to shareholders of the Parent Company	W	1,271,326,523,505		W	4,027,935,105,841
Deduction: Dividends on hybrid securities		(34,514,700,000	)		(85,698,100,000	)

Profit attributable to ordinary equity holders of the Parent Company		1,236,811,823,505			3,942,237,005,841
Adjustments: Interest expense on exchangeable bonds		600,130,825			1,780,822,991

Adjusted profit for diluted earnings per share	W	1,237,411,954,330		W	3,944,017,828,832


(In Korean won)	2021
	Three months			Nine months
Profit attributable to shareholders of the Parent Company	W	1,298,425,798,924		W	3,772,414,984,738
Deduction: Dividends on hybrid securities		(20,097,875,000	)		(51,439,625,000	)

Profit attributable to ordinary equity holders of the Parent Company		1,278,327,923,924			3,720,975,359,738
Adjustments: Interest expense on exchangeable bonds		591,619,704			1,755,567,167

Adjusted profit for diluted earnings per share	W	1,278,919,543,628		W	3,722,730,926,905

29.2.2 Weighted average number of ordinary shares outstanding for diluted earnings per share


(In number of shares)	2022				2021
	Three months		Nine months		Three months		Nine months
Weighted average number of ordinary shares outstanding		389,634,335		389,634,335		389,634,335		389,634,335
Adjustment:
Stock grants		4,008,204		4,328,225		3,495,172		3,697,690
Exchangeable bonds		5,000,000		5,000,000		5,000,000		5,000,000

Adjusted weighted average number of ordinary shares outstanding for diluted earnings per share		398,642,539		398,962,560		398,129,507		398,332,025

29.2.3 Diluted earnings per share


(In Korean won and in number of shares)	2022
	Three months		Nine months
Adjusted profit for diluted earnings per share	W	1,237,411,954,330	W	3,944,017,828,832
Adjusted weighted average number of ordinary shares outstanding for diluted earnings per share		398,642,539		398,962,560

Diluted earnings per share	W	3,104	W	9,886


(In Korean won and in number of shares)	2021
	Three months		Nine months
Adjusted profit for diluted earnings per share	W	1,278,919,543,628	W	3,722,730,926,905
Adjusted weighted average number of ordinary shares outstanding for diluted earnings per share		398,129,507		398,332,025

Diluted earnings per share	W	3,212	W	9,346

112

KB Financial Group Inc. and Subsidiaries

Notes to the Consolidated Interim Financial Statements

September 30, 2022 and 2021 (Unaudited), and December 31, 2021

30. Insurance Contracts

30.1 Insurance Liabilities

Details of insurance liabilities by insurance type as of September 30, 2022 and December 31, 2021, are as follows:


(In millions of Korean won)	September 30, 2022
	Non-life insurance		Life insurance		Others		Total
Premium reserve *	W	26,646,043	W	24,946,240	W	—	W	51,592,283
Reserve for outstanding claims		3,865,625		248,625		1,769		4,116,019
Unearned premium reserve		2,117,880		10,674		800		2,129,354
Reserve for dividend to policyholders		134,918		36,838		—		171,756
Reserve for distribution of earnings to policyholders		63,693		6,516		—		70,209
Reserve for loss compensation on participating insurance		24,790		6,903		—		31,693
Guarantee reserve		—		885,314		—		885,314

	W	32,852,949	W	26,141,110	W	2,569	W	58,996,628


(In millions of Korean won)	December 31, 2021
	Non-life insurance		Life insurance		Others		Total
Premium reserve *	W	26,086,004	W	24,363,509	W	—	W	50,449,513
Reserve for outstanding claims		3,378,427		259,848		2,102		3,640,377
Unearned premium reserve		1,909,327		9,358		622		1,919,307
Reserve for dividend to policyholders		122,025		40,960		—		162,985
Reserve for distribution of earnings to policyholders		63,093		4,857		—		67,950
Reserve for loss compensation on participating insurance		24,790		6,108		—		30,898
Guarantee reserve		—		894,906		—		894,906

	W	31,583,666	W	25,579,546	W	2,724	W	57,165,936

*	Includes negative Value of Business Acquired (“VOBA”) amounting to W 2,179,224 million and W 2,390,985 million as of September 30, 2022 and December 31, 2021, respectively.

113

KB Financial Group Inc. and Subsidiaries

Notes to the Consolidated Interim Financial Statements

September 30, 2022 and 2021 (Unaudited), and December 31, 2021

30.2 Net Insurance Income

Details of insurance income and insurance expenses for the nine-month periods ended September 30, 2022 and 2021, are as follows:


(In millions of Korean won)	2022		2021
Insurance income
Premium income	W	12,014,285	W	11,131,124
Reinsurance income		628,443		699,521
Reversal of policy reserve		153		396
Separate account income		217,667		229,628
Income from changes in reinsurance assets		275,341		164,442
Other insurance income		6,901		9,046

		13,142,790		12,234,157

Insurance expenses
Insurance claims paid		4,567,626		4,142,336
Dividend expenses		10,518		10,518
Refunds of surrender value		3,881,757		3,052,592
Reinsurance expenses		953,873		879,576
Provision for policy reserve		1,762,716		2,324,441
Separate account expenses		117,138		85,208
Administration expenses		548,295		486,592
Amortization of deferred acquisition costs		732,172		618,875
Claim survey expenses paid		52,573		44,534
Other insurance expenses		108,362		126,643

		12,735,030		11,771,315

Net insurance income	W	407,760	W	462,842

114

KB Financial Group Inc. and Subsidiaries

Notes to the Consolidated Interim Financial Statements

September 30, 2022 and 2021 (Unaudited), and December 31, 2021

30.3 Application of the Overlay Approach

Upon initial application of Korean IFRS No.1109, the Group applied the overlay approach in accordance with Korean IFRS No.1104.

30.3.1 Details of financial assets subject to the overlay approach as of September 30, 2022 and December 31, 2021, are as follows:


(In millions of Korean won)	September 30, 2022		December 31, 2021
Financial assets at fair value through profit or loss:
Due from financial institutions	W	70,332	W	80,179
Debt securities		9,059,432		8,023,999
Equity securities		84,072		239,426

	W	9,213,836	W	8,343,604

30.3.2 Changes in net gains on overlay adjustment for the nine-month periods ended September 30, 2022 and 2021, are as follows:


(In millions of Korean won)	2022			2021
Beginning	W	459,484		W	339,202
Recognition of other comprehensive income (loss) due to acquisition and valuation		(280,173	)		162,962
Reclassification to profit or loss due to disposal		(53,755	)		(52,743	)

Ending	W	125,556		W	449,421

115

KB Financial Group Inc. and Subsidiaries

Notes to the Consolidated Interim Financial Statements

September 30, 2022 and 2021 (Unaudited), and December 31, 2021

31. Statement of Cash Flows

31.1 Details of cash and cash equivalents as of September 30, 2022 and December 31, 2021, are as follows:


(In millions of Korean won)	September 30, 2022			December 31, 2021
Cash	W	2,783,537		W	2,496,941
Checks issued by other banks		355,350			150,047
Due from the Bank of Korea		12,568,603			17,579,643
Due from other financial institutions		11,789,280			10,782,743

		27,496,770			31,009,374

Due from financial institutions measured at fair value through profit or loss		90,339			200,743

		27,587,109			31,210,117

Deduction:
Restricted due from financial institutions		(16,516,103	)		(20,754,706	)
Due from financial institutions with original maturities over three months		(1,249,133	)		(1,346,951	)

		(17,765,236	)		(22,101,657	)

	W	9,821,873		W	9,108,460

31.2 Cash inflows and outflows from income tax, interest, and dividends for the nine-month periods ended September 30, 2022 and 2021, are as follows:

(In millions of Korean won)

Activities

2022

2021

Income tax paid

Operating

1,406,931

956,131

Interest received

Operating

13,311,883

11,219,457

Interest paid

Operating

3,613,763

3,056,074

Dividends received

Operating

242,442

220,290

Dividends paid

Financing

1,328,632

1,033,319

116

KB Financial Group Inc. and Subsidiaries

Notes to the Consolidated Interim Financial Statements

September 30, 2022 and 2021 (Unaudited), and December 31, 2021

32. Contingent Liabilities and Commitments

32.1 Details of acceptances and guarantees as of September 30, 2022 and December 31, 2021, are as follows:


(In millions of Korean won)	September 30, 2022		December 31, 2021
Confirmed acceptances and guarantees
Confirmed acceptances and guarantees in Korean won:
Acceptances and guarantees for KB purchasing loan	W	191,904	W	136,914
Others		870,141		817,470

		1,062,045		954,384

Confirmed acceptances and guarantees in foreign currencies:
Acceptances of letter of credit		418,723		523,037
Letter of guarantees		82,627		83,089
Bid bond		32,588		18,874
Performance bond		1,060,600		855,247
Refund guarantees		1,825,707		874,173
Others		3,528,937		2,505,353

		6,949,182		4,859,773

Financial guarantee contracts:
Acceptances and guarantees for issuance of debentures		5,040		5,040
Acceptances and guarantees for mortgage		91,751		51,053
Overseas debt guarantees		664,836		428,109
International financing guarantees in foreign currencies		205,196		132,114
Others		50,950		50,950

		1,017,773		667,266

		9,029,000		6,481,423

Unconfirmed acceptances and guarantees
Guarantees of letter of credit		3,083,348		3,551,767
Refund guarantees		1,654,863		833,765

		4,738,211		4,385,532

	W	13,767,211	W	10,866,955

32.2 Details of commitments as of September 30, 2022 and December 31, 2021, are as follows:


(In millions of Korean won)	September 30, 2022		December 31, 2021
Commitments
Corporate loan commitments	W	53,395,838	W	45,767,502
Retail loan commitments		49,689,997		47,080,416
Credit line of credit cards		77,110,038		70,534,719
Purchase of other securities		7,226,723		6,835,506

		187,422,596		170,218,143

Financial guarantee contracts
Credit line		7,279,626		5,729,798
Purchase of securities		653,801		495,400

		7,933,427		6,225,198

	W	195,356,023	W	176,443,341

117

KB Financial Group Inc. and Subsidiaries

Notes to the Consolidated Interim Financial Statements

September 30, 2022 and 2021 (Unaudited), and December 31, 2021

32.3 Other Matters (including litigation)

a) The Group has 114 pending lawsuits as a plaintiff (excluding simple lawsuits related to the collection or management of loans), with aggregate claims amount of W 1,613,016 million, and 270 pending lawsuits as a defendant (excluding simple lawsuits related to the collection or management of loans) with aggregate claims amount of W 932,870 million, which arose in the normal course of the business, as of September 30, 2022. Details of major pending lawsuits in which the Group is a defendant are as follows:

(In number of cases, in millions of Korean won)

Company

Lawsuits

No. of
cases

Amount

Description of the lawsuits

Status of the lawsuits

Kookmin Bank

Request for a return of redemption amount

W60,276

Kookmin Bank invested the assets entrusted by OO Asset Management and OO Investment Trust Management in the Fairfield Sentry Limited, and Fairfield Sentry Limited reinvested the assets in Bernard L. Madoff Investment Securities LLC managed by Bernard Madoff (Bernard L. Madoff Investment Securities LLC is in the liquidation process due to Ponzi scheme fraud-related losses).

Bankruptcy trustee of Bernard L. Madoff Investment Securities LLC filed a lawsuit against Kookmin Bank seeking to return the amount of redemptions received by Kookmin Bank through Fairfield Sentry Limited.

Application for dismissal by the defendant has been denied, and further proceedings are scheduled. [Related litigation is in progress at the New York Southern District Federal Bankruptcy Court (10-3777) at the written complaint review stage]

Confirm the absence of debt

96,200

Galamat-Art LLP is a joint guarantor of the PF loan for the 'Kazakhstan Almaty City Complex Development Project' in which Kookmin Bank Co., Ltd. participated as a lender. OO Bank, the agent bank of the lending group, filed a provisional seizure and a lawsuit on the merits of the guarantee debt to the local court against Galamat-Art LLP. And Galamat-Art LLP filed a counterclaim against the lenders, including Kookmin Bank, to confirm the absence of debt denying the joint guarantee obligation.

Kookmin Bank won the case in the first and second trials, but the second trial is scheduled to be re-run as the registered shareholders of the Plaintiff filed an objection.

Expropriation of long-term leasehold rights

358,700

Kookmin Bank invested assets entrusted by DAOL Asset Management Co., Ltd. in loans that are directly or indirectly collateralized by the building and land leasehold rights (hereinafter referred to as "the real estate in this case") of Union Station in Washington, D.C., the United States.

The Plaintiff, who is the operator of the railway facility, filed this lawsuit against those concerned with the real estate in this case, including Kookmin Bank, to expropriate the real estate in this case and determine indemnity.

Kookmin Bank submitted the response letter and will proceed with the process in the future.

118

KB Financial Group Inc. and Subsidiaries

Notes to the Consolidated Interim Financial Statements

September 30, 2022 and 2021 (Unaudited), and December 31, 2021

32.3 Other Matters (including litigation) (cont’d)

(In number of cases, in millions of Korean won)

Company

Lawsuits

No. of
cases

Amount

Description of the lawsuits

Status of the lawsuits

KB Securities Co., Ltd.

Request for a return of transaction amount (Australian fund)

100,000

The plaintiffs OOOO Securities and OOOO Life Insurance filed lawsuits, claiming that the KB Securities Co., Ltd. provided false information on major matters in the product description while selling JB Australia NDIS Private Fund No.1 (on April 25, 2019, plaintiffs invested W 50 billion each) (a) (Primary claim) requesting KB Securities Co., Ltd. to return unjust enrichment of W 100 billion for cancelation of sales contracts of beneficiary certificates due to an error or termination of the contract due to default, (b) (Secondary claim) requesting for compensation for damages in investments amounting to W 100 billion due to violation of the investor protection obligation and fraudulent transactions of KB Securities Co., Ltd. and OOO Asset Management.

First trial is in progress (The pleading ended on October 18, 2022, and the rendition of judgement is scheduled for February 27, 2023.).

b) In June 2013, KB Kookmin Card Co., Ltd. had an accident in which cardholders’ personal information was stolen (hereinafter referred to as “accident”) due to illegal activities by employees of personal credit information company in charge of development of the system upgrading to prevent fraudulent use of credit card. As a result, KB Kookmin Card Co., Ltd. was notified by the Financial Services Commission of the suspension of some new business for 3 months as of February 16, 2014. In respect of the accident, the Group faces 2 legal claims filed as a defendant, with an aggregate claim amount of W 106 million and W 108 million as of September 30, 2022 and December 31, 2021, respectively. The Group takes out the personal information protection liability insurance as of September 30, 2022.

c) As of September 30, 2022, KB KOLAO Leasing Co., Ltd. is selling LVMC Holdings (formerly Kolao Holdings) allied receivables that are overdue by three months or more to Lanexang Leasing Co., Ltd. in accordance with the agreement.

d) As of September 30, 2022, KB Capital Co., Ltd. and PT Sunindo Primasura are required to hold the shares of PT Sunindo Kookmin Best Finance for five years after May 18, 2020, when the purchase of shares was completed. If one party is going to sell all or part of the shares, provide them as collateral, trade or dispose of them, it should give the opportunity to exercise preemption to the other party by providing written proposal including transfer price, payment method, and others.

e) KB Securities Co., Ltd., as a sales agency, sold W 326,500 million of private equity funds and trusts, which loans to corporations (borrower) that invest in apartment rental businesses for the disabled in Australia, to individuals and institutional investors. However, management of the fund is impossible due to the breach of contract by local borrowers in Australia, therefore there is a possibility of losses of principal to these funds subscribers. In this regard, there are three lawsuits in which the Group is a defendant as of September 30, 2022. There is a possibility that additional lawsuits will be filed in the future, but the magnitude and final outcome of the lawsuit are unpredictable.

119

KB Financial Group Inc. and Subsidiaries

Notes to the Consolidated Interim Financial Statements

September 30, 2022 and 2021 (Unaudited), and December 31, 2021

32.3 Other Matters (including litigation) (cont’d)

f) In relation to Lime Asset Management, KB Securities Co., Ltd. has a PIS (Portfolio Index Swap) contract, as of September 30, 2022, associated with ‘Lime Thetis Qualified Investor Private Investment Trust No.2’ and ‘Lime Pluto FI Qualified Investor Private Investment Trust No.D-1’ whose redemption were suspended during the fourth quarter of 2019. The notional amount of the underlying assets of the PIS contract is W 170,600 million. Meanwhile, the Group sold W 68,100 million of feeder funds of aforementioned redemption-suspended funds. On October 20, 2020, Lime Asset Management’s license as a fund manager was revoked by the Financial Supervisory Service’s sanctions review committee, and most of its redemption-suspended funds and normal funds have been transferred to Wellbridge Asset Management (the bridge management company) to continue to collect and distribute investments. It is difficult to predict whether and when the aforementioned redemption-suspended funds will be redeemed. In this regard, KB Securities Co., Ltd. faces four claims filed as a defendant as of September 30, 2022. The Group has accounted for the estimated loss due to the possibility of additional lawsuits in the future as a provision for litigations.

g) The proliferation of COVID-19 has had a negative impact on the global economy, which may have an impact on the expected credit losses and potential impairment of assets in a particular portfolio, and it could negatively affect the revenue generation capability of the Group as follows:

•

There is a possibility of uncertainty about the credit risk of a borrower that could be affected by COVID-19.

•

Uncertainty may arise about forward-looking macroeconomic information related to expected credit losses.

•

Korean won may depreciate against major foreign currencies. This may result in an increase in principal and interest payments on liabilities denominated in foreign currencies, and losses on foreign exchange transactions.

•

A significant decrease in the fair value of the Group’s investment in an entity that could be affected by COVID-19 pandemic can occur.

Meanwhile, the impact on expected credit losses related to COVID-19 is described in Note 10.1 Changes in allowances for credit losses of loans and Note 18.2 Changes in provisions for credit losses of unused loan commitments, and acceptances and guarantees.

120

KB Financial Group Inc. and Subsidiaries

Notes to the Consolidated Interim Financial Statements

September 30, 2022 and 2021 (Unaudited), and December 31, 2021

33. Subsidiaries

33.1 Details of major consolidated subsidiaries as of September 30, 2022, are as follows:

Investor

Investee

Ownership
(%)

Location

Date of
financial
statements

Industry

KB Financial Group Inc.

Kookmin Bank

100.00

Korea

Sep. 30

Banking and foreign exchange transaction

KB Securities Co., Ltd.

100.00

Korea

Sep. 30

Financial investment

KB Insurance Co., Ltd.

100.00

Korea

Sep. 30

Non-life insurance

KB Kookmin Card Co., Ltd.

100.00

Korea

Sep. 30

Credit card and installment financing

Prudential Life Insurance Company of Korea Ltd.

100.00

Korea

Sep. 30

Life insurance

KB Asset Management Co., Ltd.

100.00

Korea

Sep. 30

Collective investment and advisory

KB Capital Co., Ltd.

100.00

Korea

Sep. 30

Financial Leasing

KB Life Insurance Co., Ltd.

100.00

Korea

Sep. 30

Life insurance

KB Real Estate Trust Co., Ltd.

100.00

Korea

Sep. 30

Real estate trust management

KB Savings Bank Co., Ltd.

100.00

Korea

Sep. 30

Savings banking

KB Investment Co., Ltd.

100.00

Korea

Sep. 30

Capital investment

KB Data System Co., Ltd.

100.00

Korea

Sep. 30

Software advisory, development, and supply

KB Credit Information Co., Ltd.

100.00

Korea

Sep. 30

Collection of receivables or credit investigation

KB STAR REIT Co., Ltd.

52.60

Korea

Sep. 30

Real estate investment

Kookmin Bank

Kookmin Bank Cambodia Plc.

100.00

Cambodia

Sep. 30

Banking and foreign exchange transaction

Kookmin Bank (China) Ltd.

100.00

China

Sep. 30

Banking and foreign exchange transaction

KB Microfinance Myanmar Co., Ltd.

100.00

Myanmar

Sep. 30

Microfinance services

PRASAC Microfinance Institution Plc.

100.00

Cambodia

Sep. 30

Microfinance services

PT Bank KB Bukopin Tbk

67.00

Indonesia

Sep. 30

Banking and foreign exchange transaction

PT Bank Syariah Bukopin

92.78

Indonesia

Sep. 30

Banking

PT Bukopin Finance

97.03

Indonesia

Sep. 30

Installment financing

KB BANK MYANMAR LTD

100.00

Myanmar

Sep. 30

Banking and foreign exchange transaction

Orient Kwang-yang Co., Ltd.

36.16

Korea

Sep. 30

Building of ships

YoulChon Clean Energy Co., Ltd.

100.00

Korea

Sep. 30

Other power generation

121

KB Financial Group Inc. and Subsidiaries

Notes to the Consolidated Interim Financial Statements

September 30, 2022 and 2021 (Unaudited), and December 31, 2021

33.1 Details of major consolidated subsidiaries as of September 30, 2022, are as follows: (cont’d)

Investor

Investee

Ownership
(%)

Location

Date of
financial
statements

Industry

KB Securities Co., Ltd.

KBFG Securities America Inc.

100.00

United
States

Sep. 30

Investment advisory and securities trading

KB Securities Hong Kong Ltd.

100.00

China

Sep. 30

Investment advisory and securities trading

KB Securities Vietnam Joint Stock Company

99.81

Vietnam

Sep. 30

Investment advisory and securities trading

KB FINA Joint Stock Company

77.82

Vietnam

Sep. 30

Investment advisory and securities trading

PT KB VALBURY SEKURITAS

65.00

Indonesia

Sep. 30

Investment advisory and securities trading

PT.KB Valbury Capital Management

79.00

Indonesia

Sep. 30

Financial investment

KB Insurance Co., Ltd.

Leading Insurance Services, Inc.

100.00

United
States

Sep. 30

Management service

KBFG Insurance(China) Co., Ltd.

100.00

China

Sep. 30

Non-life insurance

PT. KB Insurance Indonesia

70.00

Indonesia

Sep. 30

Non-life insurance

KB Claims Survey & Adjusting

100.00

Korea

Sep. 30

Claim service

KB Sonbo CNS

100.00

Korea

Sep. 30

Management service

KB Golden Life Care Co., Ltd.

100.00

Korea

Sep. 30

Service

KB Healthcare Co., Ltd.

100.00

Korea

Sep. 30

Information and communication

Prudential Life Insurance Company of Korea Ltd.

KB Life Partners Co., Ltd.

100.00

Korea

Sep. 30

Insurance agent

KB Kookmin Card Co., Ltd.

KB Daehan Specialized Bank Plc.

95.71

Cambodia

Sep. 30

Auto Installment finance

PT. KB Finansia Multi Finance

80.00

Indonesia

Sep. 30

Auto Installment finance

KB J Capital Co., Ltd.

50.99

Thailand

Sep. 30

Service

KB Capital Co., Ltd.

PT Sunindo Kookmin Best Finance

85.00

Indonesia

Sep. 30

Auto Installment finance

KB Kookmin Card Co., Ltd., KB Capital Co., Ltd.

KB KOLAO Leasing Co., Ltd.

80.00

Laos

Sep. 30

Auto Installment finance

Kookmin Bank, KB Data System Co., Ltd.

PT KB Data Systems Indonesia

100.00

Indonesia

Sep. 30

Service

KB Asset Management Co., Ltd.

KBAM Shanghai Advisory Services Co., Ltd.

100.00

China

Sep. 30

General advisory

KB Asset Management Singapore PTE. LTD.

100.00

Singapore

Sep. 30

Collective investment

122

KB Financial Group Inc. and Subsidiaries

Notes to the Consolidated Interim Financial Statements

September 30, 2022 and 2021 (Unaudited), and December 31, 2021

33.2 Details of consolidated structured entities as of September 30, 2022, are as follows:


	Consolidated structured entities	Reasons for consolidation
Trusts	Kookmin Bank (development trust) and 10 others	The Group controls the trust because it has power to determine management performance of the trust and is significantly exposed to variable returns that absorb losses through the guarantees of payment of principal, or payment of principal and fixed rate of return.

Asset-backed securitization	Taejon Samho The First Co., Ltd. and 130 others	The Group controls these investees because it has power over relevant activities in the event of default, is significantly exposed to variable returns by providing lines of credit, ABCP purchase commitments or acquisition of subordinated debt and has ability to affect those returns through its power.

Investment funds and others	KB Global Platform Fund and 190 others	Funds are consolidated if the Group, as a collective investor or operating manager (member), etc., can manage fund assets on behalf of other investors, or dismiss the collective investor and operating manager, and is substantially exposed to significant variable returns or has such rights.

If the Group holds more than half of the ownership interests but does not have the power over relevant activities of structured entities in accordance with agreements with trust and other related parties, those structured entities are excluded from the consolidation.

123

KB Financial Group Inc. and Subsidiaries

Notes to the Consolidated Interim Financial Statements

September 30, 2022 and 2021 (Unaudited), and December 31, 2021

33.3 Condensed financial information of major subsidiaries as of September 30, 2022 and December 31, 2021, and for the nine-month periods ended September 30, 2022 and 2021, are as follows:

(In millions of Korean won)


	September 30, 2022						2022
	Assets		Liabilities		Equity		Operating revenue		Profit (loss) attributable to shareholders of the Parent Company			Total compre- hensive income (loss) attributable to shareholders of the Parent Company
Kookmin Bank ¹	W	537,997,107	W	504,660,173	W	33,336,934	W	45,685,185	W	2,550,571		W	1,217,851
KB Securities Co., Ltd. ^1,2		58,461,685		52,407,835		6,053,850		13,942,284		303,737			428,904
KB Insurance Co., Ltd. ^1,2		43,180,571		39,951,179		3,229,392		11,788,348		520,704			(931,645	)
KB Kookmin Card Co., Ltd. ¹		30,144,625		25,433,510		4,711,115		2,735,913		352,265			398,979
Prudential Life Insurance Company of Korea Ltd. ^1,2		25,081,819		23,699,954		1,381,865		1,818,530		207,706			(812,650	)
KB Asset Management Co., Ltd. ¹		388,477		130,697		257,780		187,633		49,893			50,630
KB Capital Co., Ltd. ^1,2		15,581,799		13,484,904		2,096,895		1,420,559		201,997			191,811
KB Life Insurance Co., Ltd.		10,180,357		10,061,405		118,952		2,108,989		(51,919	)		(390,421	)
KB Real Estate Trust Co., Ltd. ¹		519,510		126,910		392,600		111,983		55,777			55,777
KB Savings Bank Co., Ltd.		2,940,778		2,657,251		283,527		140,027		21,478			21,430
KB Investment Co., Ltd. ¹		1,299,460		1,034,780		264,680		90,557		(797	)		(801	)
KB Data System Co., Ltd. ¹		53,057		33,440		19,617		158,221		849			1,063
KB Credit Information Co., Ltd.		29,599		13,405		16,194		26,838		(162	)		(178	)

124

KB Financial Group Inc. and Subsidiaries

Notes to the Consolidated Interim Financial Statements

September 30, 2022 and 2021 (Unaudited), and December 31, 2021

33.3 Condensed financial information of major subsidiaries as of September 30, 2022 and December 31, 2021, and for the nine-month periods ended September 30, 2022 and 2021, are as follows: (cont’d)

(In millions of Korean won)


	December 31, 2021						2021
	Assets		Liabilities		Equity		Operating revenue		Profit (loss) attributable to shareholders of the Parent Company			Total compre- hensive income (loss) attributable to shareholders of the Parent Company
Kookmin Bank ¹	W	483,564,898	W	450,675,985	W	32,888,913	W	21,409,978	W	2,200,320		W	3,257,499
KB Securities Co., Ltd. ^1,2		55,493,985		50,008,422		5,485,563		6,920,421		543,287			575,584
KB Insurance Co., Ltd. ^1,2		41,472,227		37,328,954		4,143,273		10,658,431		269,184			102,308
KB Kookmin Card Co., Ltd.¹		27,349,561		22,793,920		4,555,641		2,612,848		374,116			397,758
Prudential Life Insurance Company of Korea Ltd. ²		26,287,116		23,992,601		2,294,515		1,496,273		255,596			(16,964	)
KB Asset Management Co., Ltd. ¹		375,739		128,589		247,150		190,797		60,760			59,933
KB Capital Co., Ltd. ^1,2		14,529,427		12,707,210		1,822,217		1,204,562		170,659			170,492
KB Life Insurance Co., Ltd.		10,634,562		10,174,282		460,280		1,840,580		(18,076	)		(81,399	)
KB Real Estate Trust Co., Ltd.		496,522		119,700		376,822		129,881		71,206			71,207
KB Savings Bank Co., Ltd.		2,601,134		2,339,037		262,097		108,582		15,591			19,107
KB Investment Co., Ltd. ¹		1,197,720		922,239		275,481		103,132		21,816			21,820
KB Data System Co., Ltd. ¹		44,486		25,911		18,575		128,019		(420	)		(445	)
KB Credit Information Co., Ltd.		28,674		12,303		16,371		29,754		(15	)		(31	)

¹	Financial information is based on its consolidated financial statements.

²	Includes fair value adjustments arising from the acquisition.

125

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Notes to the Consolidated Interim Financial Statements

September 30, 2022 and 2021 (Unaudited), and December 31, 2021

33.4 The Characteristics of Risks Associated with Consolidated Structured Entities

The terms of contractual arrangements to provide financial support to consolidated structured entities are as follows:

33.4.1 The Group has provided payment guarantees of W 5,582,537 million to K plus 1st L.L.C and other consolidated structured entities.

33.4.2 The Group has provided capital commitment to 46 consolidated structured entities including KB Sinansan Line Private Special Asset Fund (SOC). The unexecuted amount of the capital commitment is W 1,751,460 million. Based on the capital commitment, the Group is subject to increase its investment upon the request of the asset management company or the additional agreement among investors.

33.4.3 The Group has provided the guarantees of payment of principal, or principal and fixed rate of return in case the operating results of the trusts are less than the guaranteed principal, or principal and fixed rate of return.

33.5 Changes in Subsidiaries

33.5.1 Subsidiaries newly included in consolidation for the nine-month period ended September 30, 2022, are as follows:


Company		Reasons of obtaining control
PT.KB VALBURY SEKURITAS and 27 others		Holds more than half of the ownership interests

New star Gimpo 4th Co., Ltd. and 51 others		Holds the power in the event of default and is exposed to significant variable returns by providing lines of credit, ABCP purchase commitments or acquisition of subordinated debt

KB Korea Short Term Premium Private Securities Fund No.25(USD)(Bond) and 22 others		Holds the power to determine the operation of the funds and is exposed to variable returns by holding significant amount of ownership interests

KB Tail End Fund and 8 others		Holds the power as a general partner and is exposed to variable returns by holding significant amount of ownership interests

33.5.2 Subsidiaries excluded from consolidation for the nine-month period ended September 30, 2022, are as follows:


Company		Reasons of losing control
Able Pocheon 1st Co., Ltd. and 46 others		Termination of the commitments

KB Pre IPO Secondary Venture Fund No.2 and 15 others		Liquidation

498 Seventh KOR Holdco LP and 3 other		Disposal

KB Global Digital-Chain Economy Securities Fund(Equity) and 8 others		Decrease in ownership interests to less than majority

126

KB Financial Group Inc. and Subsidiaries

Notes to the Consolidated Interim Financial Statements

September 30, 2022 and 2021 (Unaudited), and December 31, 2021

34. Related Party Transactions

According to Korean IFRS No.1024, the Group includes investments in associates, key management personnel (including family members), and post-employment benefit plans of the Group and its related party companies in the scope of related parties. The Group discloses balances (receivables and payables) and other amounts arising from transactions with related parties in the notes to the consolidated financial statements. Refer to Note 12 for details of investments in associates and joint ventures.

34.1 Details of significant profit or loss arising from transactions with related parties for the nine-month periods ended September 30, 2022 and 2021, are as follows:


(In millions of Korean won)		2022		2021
Associates and joint ventures
Balhae Infrastructure Company	Fee and commission income	W	3,888	W	4,262
Korea Credit Bureau Co., Ltd.	Interest expense		1		5
	Fee and commission income		630		686
	Insurance income		3		3
	Fee and commission expense		3,066		3,211
	Other operating expenses		12		4
KB GwS Private Securities Investment Trust *	Fee and commission income		—		146
Incheon Bridge Co., Ltd.	Interest income		6,113		3,165
	Interest expense		350		117
	Fee and commission income		17		16
	Fee and commission expense		4		4
	Insurance income		156		180
	Losses on financial instruments at fair value through profit or loss		2,928		415
	Reversal of credit losses		—		460
	Provision for credit losses		9		1
Kendai Co.,Ltd.	Other non-operating expenses		6		—
Aju Good Technology Venture Fund	Interest expense		62		16
KB Star Office Private Real Estate Master Fund No.1*	Interest income		—		277
	Interest expense		2		4
	Fee and commission income		276		325
Star-Lord General Investors Private Real Estate Investment Company No.10	Insurance income		61		—
	Interest income		1,619		—
	Interest expense		252		—
	Provision for credit losses		1		—
	General and administrative expenses		3,198		—
SY Auto Capital Co., Ltd.	Interest income		666		718
	Fee and commission income		36		65
	Fee and commission expense		8		10
	Insurance income		33		31
	Other operating income		392		543
	Other operating expenses		20		56
	Provision for credit losses		4		11

127

KB Financial Group Inc. and Subsidiaries

Notes to the Consolidated Interim Financial Statements

September 30, 2022 and 2021 (Unaudited), and December 31, 2021

34.1 Details of significant profit or loss arising from transactions with related parties for the nine-month periods ended September 30, 2022 and 2021, are as follows: (cont’d)


(In millions of Korean won)		2022		2021
Associates and joint ventures
Food Factory Co., Ltd.	Interest income	W	60	W	52
	Interest expense		6		4
	Insurance income		7		6
	Fee and commission income		1		—
	Fee and commission expense		—		2
	Gains on financial instruments at fair value through profit or loss		20		—
	Losses on financial instruments at fair value through profit or loss		—		2
	Reversal of credit losses		—		6
KB Pre IPO Secondary Venture Fund No.1 *	Fee and commission income		8		83
Acts Co., Ltd.	Insurance income		2		1
POSCO-KB Shipbuilding Fund	Fee and commission income		137		170
Dae-A Leisure Co., Ltd.	Interest expense		—		1
Paycoms Co., Ltd.	Interest income		7		7
	Gains on financial instruments at fair value through profit or loss		67		48
Big Dipper Co., Ltd.	Interest expense		1		—
	Fee and commission expense		393		496
KB-KDBC Pre-IPO New Technology Business Investment Fund	Interest expense		1		1
	Fee and commission income		92		152
KB-TS Technology Venture Private Equity Fund	Fee and commission income		185		218
KB-SJ Tourism Venture Fund	Fee and commission income		209		213
Banksalad Co., Ltd.	Gains on financial instruments at fair value through profit or loss		—		14
	Losses on financial instruments at fair value through profit or loss		—		1,344
	Fee and commission income		27		27
	Fee and commission expense		15		46
Iwon Alloy Co., Ltd.	Insurance income		1		—
Bioprotect Ltd.	Gains on financial instruments at fair value through profit or loss		—		126
RMGP Bio-Pharma Investment Fund, L.P.	Fee and commission income		48		29
	Gains on financial instruments at fair value through profit or loss		—		188
	Losses on financial instruments at fair value through profit or loss		—		52
KB-MDI Centauri Fund LP	Fee and commission income		358		288
	Gains on financial instruments at fair value through profit or loss		—		174
	Losses on financial instruments at fair value through profit or loss		—		206
Hibiscus Fund LP	Fee and commission income		391		246

128

KB Financial Group Inc. and Subsidiaries

Notes to the Consolidated Interim Financial Statements

September 30, 2022 and 2021 (Unaudited), and December 31, 2021

34.1 Details of significant profit or loss arising from transactions with related parties for the nine-month periods ended September 30, 2022 and 2021, are as follows: (cont’d)


(In millions of Korean won)		2022			2021
Associates and joint ventures
RMG-KB BP Management Ltd.	Gains on financial instruments at fair value through profit or loss	W	—		W	1
	Fee and commission income		—			17
RMG-KB BioAccess Fund L.P.	Fee and commission income		245			—
S&E Bio Co., Ltd.	Interest expense		1			1
Contents First Inc.	Interest income		70			—
	Interest expense		(4	)		59
	Provision for credit losses		2			—
December & Company Inc.	Insurance income		136			81
GENINUS Inc. *	Interest expense		12			23
	Provision for credit losses		—			3
Pin Therapeutics Inc.	Interest expense		110			—
Wyatt Corp.	Gains on financial instruments at fair value through profit or loss		—			5,398
	Insurance income		106			53
KB-Brain KOSDAQ Scale-up New Technology Business Investment Fund	Interest expense		3			13
	Fee and commission income		—			514
Spark Biopharma Inc.	Interest expense		149			3
Skydigital Inc.	Fee and commission income		2			2
Il-Kwang Electronic Materials Co., Ltd.	Other non-operating expenses		1			—
SO-MYUNG Recycling Co., Ltd.	Other non-operating expenses		2			—
KB No.17 Special Purpose Acquisition Company *	Gains on financial instruments at fair value through profit or loss		—			22
	Losses on financial instruments at fair value through profit or loss		—			8
	Interest expense		1			11
KB No.18 Special Purpose Acquisition Company *	Gains on financial instruments at fair value through profit or loss		—			100
	Interest expense		5			16
KB No.19 Special Purpose Acquisition Company *	Gains on financial instruments at fair value through profit or loss		—			97
	Interest expense		5			6
KB No.20 Special Purpose Acquisition Company	Gains on financial instruments at fair value through profit or loss		—			119
	Losses on financial instruments at fair value through profit or loss		10			—
	Interest expense		18			10
KB No.21 Special Purpose Acquisition Company	Fee and commission income		263			—
	Gains on financial instruments at fair value through profit or loss		1,617			—
	Interest expense		15			—

129

KB Financial Group Inc. and Subsidiaries

Notes to the Consolidated Interim Financial Statements

September 30, 2022 and 2021 (Unaudited), and December 31, 2021

34.1 Details of significant profit or loss arising from transactions with related parties for the nine-month periods ended September 30, 2022 and 2021, are as follows: (cont’d)


(In millions of Korean won)		2022		2021
Associates and joint ventures
KB No.22 Special Purpose Acquisition Company	Fee and commission income	W	175	W	—
	Gains on financial instruments at fair value through profit or loss		1,089		—
	Interest expense		1		—
KB No.23 Special Purpose Acquisition Company	Interest expense		5		—
KB SPROTT Renewable Private Equity Fund No.1	Fee and commission income		259		365
KB-Stonebridge Secondary Private Equity Fund	Fee and commission income		512		374
COSES GT Co., Ltd.	Interest income		15		13
	Interest expense		1		1
	Provision for credit losses		3		1
	Reversal of credit losses		—		3
	Insurance income		—		1
Mantisco Co., Ltd.	Interest expense		—		1
Desilo Inc.	Interest income		6		—
Turing Co., Ltd.	Interest expense		1		—
IGGYMOB Co., Ltd.	Interest expense		1		—
Kukka Co., Ltd.	Interest expense		2		—
ZIPDOC Inc.	Interest expense		1		—
	Reversal of credit losses		2		—
TeamSparta Inc.	Interest expense		8		—
Chabot Mobility Co., Ltd.	Interest expense		1		—
	Fee and commission expense		409		—
Wemade Connect Co., Ltd.	Insurance income		2		—
	Interest expense		19		—
	Reversal of credit losses		2		—
WJ Private Equity Fund No.1	Fee and commission income		5		6
UPRISE, Inc.	Interest income		—		5
	Interest expense		3		—
	Reversal of credit losses		—		1
Channel Corporation	Interest expense		16		—
CWhy Inc.	Insurance income		2		—
Bomapp Inc.	Fee and commission expense		—		5
KB Social Impact Investment Fund	Fee and commission income		222		225
KB-UTC Inno-Tech Venture Fund	Fee and commission income		345		381
KBSP Private Equity Fund No.4	Fee and commission income		211		291
KB-NAU Special Situation Corporate Restructuring Private Equity Fund	Fee and commission income		561		898

130

KB Financial Group Inc. and Subsidiaries

Notes to the Consolidated Interim Financial Statements

September 30, 2022 and 2021 (Unaudited), and December 31, 2021

34.1 Details of significant profit or loss arising from transactions with related parties for the nine-month periods ended September 30, 2022 and 2021, are as follows: (cont’d)


(In millions of Korean won)		2022		2021
Associates and joint ventures
2020 KB Fintech Renaissance Fund	Fee and commission income	W	110	W	110
KB Material and Parts No.1 PEF	Fee and commission income		264		264
FineKB Private Equity Fund No.1	Fee and commission income		480		387
Paramark KB Fund No.1	Fee and commission income		318		—
KB-Badgers Future Mobility ESG Fund No.1	Fee and commission income		577		—
KB Bio Private Equity No.3 Ltd. *	Fee and commission income		4,085		270
K The 15th REIT Co., Ltd. *	Fee and commission income		—		500
	Insurance income		—		1
KB-KTB Technology Venture Fund	Fee and commission income		462		—
SKS IB NEW M&T Fund No.1	Fee and commission income		48		—
Bluepointpartners Inc.	Gains on financial instruments at fair value through profit or loss		—		599
KB-Solidus Global Healthcare Fund	Fee and commission income		269		33
SwatchOn Inc. *	Fee and commission income		5		6
	Interest expense		5		9
Gomi corporation Inc.	Interest income		42		5
	Interest expense		2		—
	Fee and commission income		1		—
	Provision for credit losses		3		11
KB Cape No.1 Private Equity Fund	Fee and commission income		72		72
	Losses on financial instruments at fair value through profit or loss		—		103
Keystone-Hyundai Securities No.1 Private Equity Fund *	Fee and commission income		—		67
KB-GeneN Medical Venture Fund No.1	Fee and commission income		54		—
KB-BridgePole Venture Investment Fund	Fee and commission income		84		—
KB-Kyobo New Mobility Power Fund	Fee and commission income		49		—
KB Co-Investment Private Equity Fund No.1	Fee and commission income		294		—
KB-NP Green ESG New Technology Venture Capital Fund	Fee and commission income		142		—
Others
Retirement pension	Fee and commission income		1,015		1,010
	Interest expense		24		2

*	Excluded from the Group’s related party as of September 30, 2022.

Meanwhile, the Group purchased installment financial assets, etc. from SY Auto Capital Co., Ltd. amounting to W 380,500 million and W 666,779 million for the nine-month periods ended September 30, 2022 and 2021, respectively.

131

KB Financial Group Inc. and Subsidiaries

Notes to the Consolidated Interim Financial Statements

September 30, 2022 and 2021 (Unaudited), and December 31, 2021

34.2 Details of significant outstanding balances of receivables and payables arising from transactions with related parties as of September 30, 2022 and December 31, 2021, are as follows:


(In millions of Korean won)		September 30, 2022		December 31, 2021
Associates and joint ventures
Balhae Infrastructure Company	Other assets	W	1,279	W	1,427
Korea Credit Bureau Co., Ltd.	Loans measured at amortized cost (gross amount)		35		36
	Deposits		3,117		10,200
	Provisions		2		—
	Insurance liabilities		2		1
Incheon Bridge Co., Ltd.	Financial assets at fair value through profit or loss		34,453		37,382
	Loans measured at amortized cost (gross amount)		99,940		114,107
	Allowances for credit losses		29		26
	Other assets		645		423
	Deposits		46,074		35,487
	Provisions		29		24
	Insurance liabilities		145		79
	Other liabilities		287		99
Jungdo Co., Ltd.	Deposits		4		4
Dae-A Leisure Co., Ltd.	Deposits		82		17
Aju Good Technology Venture Fund	Deposits		6,646		6,286
	Other liabilities		28		10
KB Star Office Private Real Estate Master Fund No.1 *	Loans measured at amortized cost (gross amount)		—		10,000
	Allowances for credit losses		—		5
	Other assets		—		138
	Deposits		—		2,578
Star-Lord General Investors Private Real Estate Investment Company No.10	Loans measured at amortized cost (gross amount)		149,221		—
	Allowances for credit losses		1		—
	Property and equipment		11,083		—
	Other assets		8,640		—
	Insurance liabilities		82		—
	Other liabilities		15,746		—
KB-Brain KOSDAQ Scale-up New Technology Business Investment Fund	Deposits		355		1,524
WJ Private Equity Fund No.1	Other assets		2		2
	Deposits		200		260
KB Cape No.1 Private Equity Fund	Financial assets at fair value through profit or loss		1,905		1,591
	Other assets		—		73
RAND Bio Science Co., Ltd.	Deposits		4		443
	Loans measured at amortized cost (gross amount)		1		1

132

KB Financial Group Inc. and Subsidiaries

Notes to the Consolidated Interim Financial Statements

September 30, 2022 and 2021 (Unaudited), and December 31, 2021

34.2 Details of significant outstanding balances of receivables and payables arising from transactions with related parties as of September 30, 2022 and December 31, 2021, are as follows: (cont’d)


(In millions of Korean won)		September 30, 2022		December 31, 2021
Associates and joint ventures
SY Auto Capital Co., Ltd.	Loans measured at amortized cost (gross amount)	W	40,038	W	40,074
	Allowances for credit losses		64		68
	Other assets		83		630
	Deposits		6		17
	Insurance liabilities		25		14
	Other liabilities		14		36
Food Factory Co., Ltd.	Financial assets at fair value through profit or loss		683		663
	Loans measured at amortized cost (gross amount)		3,487		3,553
	Allowances for credit losses		5		4
	Other assets		3		2
	Deposits		826		839
	Insurance liabilities		6		8
	Other liabilities		6		6
KB Pre IPO Secondary Venture Fund No.1 *	Deposits		—		103
Wise Asset Management Co., Ltd.	Deposits		6		—
Acts Co., Ltd.	Deposits		—		154
	Insurance liabilities		—		2
	Other liabilities		100		100
POSCO-KB Shipbuilding Fund	Other assets		137		213
Paycoms Co., Ltd.	Other assets		—		1
	Financial assets at fair value through profit or loss		1,199		1,269
	Deposits		1		1
Big Dipper Co., Ltd.	Loans measured at amortized cost (gross amount)		3		17
	Deposits		149		—
KB-KDBC Pre-IPO New Technology Business Investment Fund	Deposits		501		904
Iwon Alloy Co., Ltd.	Insurance liabilities		—		1
Computerlife Co., Ltd.	Deposits		2		—
RMGP Bio-Pharma Investment Fund, L.P.	Financial assets at fair value through profit or loss		6,493		5,423
	Other liabilities		31		79
RMGP Bio-Pharma Investment, L.P.	Financial assets at fair value through profit or loss		18		14
Wyatt Corp.	Financial assets at fair value through profit or loss		6,000		6,000
	Deposits		1		1
	Insurance liabilities		112		94
Skydigital Inc.	Deposits		34		85
Banksalad Co., Ltd.	Financial assets at fair value through profit or loss		9,935		9,090

133

KB Financial Group Inc. and Subsidiaries

Notes to the Consolidated Interim Financial Statements

September 30, 2022 and 2021 (Unaudited), and December 31, 2021

34.2 Details of significant outstanding balances of receivables and payables arising from transactions with related parties as of September 30, 2022 and December 31, 2021, are as follows: (cont’d)


(In millions of Korean won)		September 30, 2022		December 31, 2021
Associates and joint ventures
Spark Biopharma Inc.	Financial assets at fair value through profit or loss	W	7,450	W	4,950
	Loans measured at amortized cost (gross amount)		25		17
	Deposits		19,087		6,015
	Other liabilities		81		3
UPRISE, Inc.	Financial assets at fair value through profit or loss		5,248		1,250
	Deposits		3,022		4,001
	Other liabilities		1		—
Stratio, Inc.	Financial assets at fair value through profit or loss		1,000		1,000
Honest Fund, Inc.	Financial assets at fair value through profit or loss		3,999		3,999
CellinCells Co., Ltd.	Financial assets at fair value through profit or loss		2,000		2,000
	Loans measured at amortized cost (gross amount)		3		6
	Deposits		25		38
Jo Yang Industrial Co., Ltd.	Deposits		1		1
KB No.17 Special Purpose Acquisition Company *	Financial assets at fair value through profit or loss		—		1,301
	Deposits		—		1,687
	Other liabilities		—		12
KB No.18 Special Purpose Acquisition Company *	Financial assets at fair value through profit or loss		—		3,881
	Deposits		—		2,077
	Other liabilities		—		12
KB No.19 Special Purpose Acquisition Company *	Financial assets at fair value through profit or loss		—		2,091
	Deposits		—		1,013
	Other liabilities		—		5
KB No.20 Special Purpose Acquisition Company	Financial assets at fair value through profit or loss		3,125		3,135
	Deposits		1,662		1,681
	Other liabilities		21		3
KB No.21 Special Purpose Acquisition Company	Financial assets at fair value through profit or loss		3,107		—
	Deposits		2,277		—
	Other liabilities		15		—
KB No.22 Special Purpose Acquisition Company	Financial assets at fair value through profit or loss		2,079		—
	Deposits		1,970		—
	Other liabilities		1		—

134

KB Financial Group Inc. and Subsidiaries

Notes to the Consolidated Interim Financial Statements

September 30, 2022 and 2021 (Unaudited), and December 31, 2021

34.2 Details of significant outstanding balances of receivables and payables arising from transactions with related parties as of September 30, 2022 and December 31, 2021, are as follows: (cont’d)


(In millions of Korean won)		September 30, 2022		December 31, 2021
Associates and joint ventures
KB No.23 Special Purpose Acquisition Company	Financial assets at fair value through profit or loss	W	1,495	W	—
	Deposits		2,467		—
	Other liabilities		5		—
COSES GT Co., Ltd.	Financial assets at fair value through profit or loss		4,930		4,930
	Loans measured at amortized cost (gross amount)		505		515
	Allowances for credit losses		4		2
	Other assets		2		1
	Deposits		1,709		1,939
	Other liabilities		1		—
IDTECK Co., Ltd.	Insurance liabilities		—		1
CWhy Inc.	Insurance liabilities		1		—
Bomapp Inc.	Financial assets at fair value through profit or loss		—		19
Channel Corporation	Financial assets at fair value through profit or loss		14,551		14,551
	Deposits		3,000		—
	Other liabilities		16		—
MitoImmune Therapeutics	Financial assets at fair value through profit or loss		7,000		7,000
KB-Solidus Global Healthcare Fund	Other assets		269		620
Bioprotect Ltd.	Financial assets at fair value through profit or loss		3,879		3,557
Gomi corporation Inc.	Financial assets at fair value through profit or loss		4,000		2,500
	Loans measured at amortized cost (gross amount)		2,237		2,233
	Allowances for credit losses		15		12
	Other assets		5		4
	Deposits		724		3,188
	Other liabilities		1		1
Copin Communications, Inc. *	Financial assets at fair value through profit or loss		—		4,801
Go2joy Co., Ltd.	Financial assets at fair value through profit or loss		1,200		1,200
ClavisTherapeutics, Inc.	Financial assets at fair value through profit or loss		2,000		2,000
S&E Bio Co., Ltd.	Financial assets at fair value through profit or loss		2,000		2,000
	Loans measured at amortized cost (gross amount)		5		—
	Deposits		156		263

135

KB Financial Group Inc. and Subsidiaries

Notes to the Consolidated Interim Financial Statements

September 30, 2022 and 2021 (Unaudited), and December 31, 2021

34.2 Details of significant outstanding balances of receivables and payables arising from transactions with related parties as of September 30, 2022 and December 31, 2021, are as follows: (cont’d)


(In millions of Korean won)		September 30, 2022		December 31, 2021
Associates and joint ventures
Bluepointpartners Inc.	Financial assets at fair value through profit or loss	W	2,160	W	2,278
4N Inc.	Financial assets at fair value through profit or loss		200		200
	Deposits		3		39
Xenohelix Co., Ltd.	Financial assets at fair value through profit or loss		2,100		2,100
Contents First Inc.	Financial assets at fair value through profit or loss		7,277		7,277
	Loans measured at amortized cost (gross amount)		10,025		—
	Other assets		1		—
	Allowances for credit losses		2		—
	Deposits		6,817		12,650
	Other liabilities		5		57
KB-MDI Centauri Fund LP	Financial assets at fair value through profit or loss		17,429		9,633
	Other assets		341		104
2020 KB Fintech Renaissance Fund	Other assets		37		—
OKXE Inc.	Financial assets at fair value through profit or loss		800		800
GENINUS Inc. *	Financial assets at fair value through profit or loss		—		5,855
	Loans measured at amortized cost (gross amount)		—		17
	Allowances for credit losses		—		6
	Deposits		—		34,415
	Other liabilities		—		2
Mantisco Co., Ltd.	Loans measured at amortized cost (gross amount)		16		1
	Financial assets at fair value through profit or loss		3,000		3,000
	Deposits		1,275		386
Pin Therapeutics Inc.	Loans measured at amortized cost (gross amount)		25		—
	Financial assets at fair value through profit or loss		5,000		3,000
	Deposits		9,378		—
	Other liabilities		82		—
IMBiologics Corp.	Loans measured at amortized cost (gross amount)		3		4
	Financial assets at fair value through profit or loss		5,000		5,000

136

KB Financial Group Inc. and Subsidiaries

Notes to the Consolidated Interim Financial Statements

September 30, 2022 and 2021 (Unaudited), and December 31, 2021

34.2 Details of significant outstanding balances of receivables and payables arising from transactions with related parties as of September 30, 2022 and December 31, 2021, are as follows: (cont’d)


(In millions of Korean won)		September 30, 2022		December 31, 2021
Associates and joint ventures
SuperNGine Co., Ltd.	Loans measured at amortized cost (gross amount)	W	11	W	2
	Deposits		205		944
	Financial assets at fair value through profit or loss		1,996		1,996
Desilo Inc.	Financial assets at fair value through profit or loss		3,168		3,168
	Loans measured at amortized cost (gross amount)		300		301
	Allowances for credit losses		2		2
	Deposits		5		168
Turing Co., Ltd.	Financial assets at fair value through profit or loss		3,000		3,000
	Deposits		1,358		1,054
IGGYMOB Co., Ltd.	Financial assets at fair value through profit or loss		5,000		5,000
	Loans measured at amortized cost (gross amount)		2		6
	Deposits		721		2,938
Kukka Co., Ltd.	Financial assets at fair value through profit or loss		2,490		—
	Deposits		7		—
ZIPDOC Inc.	Financial assets at fair value through profit or loss		2,000		—
	Provisions		2		—
	Deposits		1,551		—
	Insurance liabilities		31		—
	Other liabilities		1		—
TeamSparta Inc.	Financial assets at fair value through profit or loss		4,001		—
	Deposits		12,688		—
	Other liabilities		1		—
Chabot Mobility Co., Ltd.	Financial assets at fair value through profit or loss		2,000		—
	Deposits		69		—
Wemade Connect Co., Ltd.	Financial assets at fair value through profit or loss		12,000		—
	Loans measured at amortized cost (gross amount)		22		—
	Provisions		3		—
	Deposits		7,141		—
	Insurance liabilities		1		—
	Other liabilities		12		—

137

KB Financial Group Inc. and Subsidiaries

Notes to the Consolidated Interim Financial Statements

September 30, 2022 and 2021 (Unaudited), and December 31, 2021

34.2 Details of significant outstanding balances of receivables and payables arising from transactions with related parties as of September 30, 2022 and December 31, 2021, are as follows: (cont’d)


(In millions of Korean won)		September 30, 2022		December 31, 2021
Associates and joint ventures
FutureConnect Co., Ltd.	Financial assets at fair value through profit or loss	W	1,499	W	—
Gushcloud Talent Agency	Financial assets at fair value through profit or loss		4,249		—
Grinergy	Loans measured at amortized cost (gross amount)		1		—
	Financial assets at fair value through profit or loss		2,500		—
NexThera Co., Ltd.	Financial assets at fair value through profit or loss		2,000		—
FineKB Private Equity Fund No.1	Other assets		165		153
Paramark KB Fund No.1	Other liabilities		7		200
KB-Badgers Future Mobility ESG Fund No.1	Other liabilities		577		—
December & Company Inc.	Deposits		1		1
	Insurance liabilities		44		10
KB Social Impact Investment Fund	Other assets		372		150
Checkmate Therapeutics Inc.	Financial assets at fair value through profit or loss		2,200		2,200
	Insurance liabilities		2		—
G1 Playground Co., Ltd.	Financial assets at fair value through profit or loss		1,000		1,000
	Deposits		25		354
Hibiscus Fund LP	Financial assets at fair value through profit or loss		10,537		4,731
	Other assets		—		251
	Other liabilities		123		—
RMG-KB BioAccess Fund L.P.	Financial assets at fair value through profit or loss		2,912		353
RMG-KB BP Management Ltd.	Financial assets at fair value through profit or loss		74		7
SwatchOn Inc. *	Financial assets at fair value through profit or loss		—		3,345
	Loans measured at amortized cost (gross amount)		—		73
	Deposits		—		686
KB Co-Investment Private Equity Fund No.1	Other assets		193		—

138

KB Financial Group Inc. and Subsidiaries

Notes to the Consolidated Interim Financial Statements

September 30, 2022 and 2021 (Unaudited), and December 31, 2021

34.2 Details of significant outstanding balances of receivables and payables arising from transactions with related parties as of September 30, 2022 and December 31, 2021, are as follows: (cont’d)


(In millions of Korean won)		September 30, 2022		December 31, 2021
Key management personnel	Loans measured at amortized cost (gross amount)	W	6,462	W	4,591
	Allowances for credit losses		3		2
	Other assets		5		4
	Deposits		18,643		16,996
	Provisions		1		1
	Insurance liabilities		2,516		2,471
	Other liabilities		367		345
Others
Retirement pension	Other assets		978		369
	Other liabilities		207		5,014

*	Excluded from the Group’s related party as of September 30, 2022, therefore, the remaining outstanding balances with those entities are not disclosed.

139

KB Financial Group Inc. and Subsidiaries

Notes to the Consolidated Interim Financial Statements

September 30, 2022 and 2021 (Unaudited), and December 31, 2021

34.3 Details of significant lending transactions with related parties for the nine-month periods ended September 30, 2022 and 2021, are as follows:


(In millions of Korean won)	2022
	Beginning		Increase		Decrease			Ending
Associates and joint ventures
Korea Credit Bureau Co., Ltd.	W	36	W	35	W	(36	)	W	35
Incheon Bridge Co., Ltd.		151,489		15		(17,111	)		134,393
Star-Lord General Investors Private Real Estate Investment Company No.10		—		150,000		(779	)		149,221
KB Star Office Private Real Estate Master Fund No.1 *		10,000		—		(10,000	)		—
KB Cape No.1 Private Equity Fund		1,591		314		—			1,905
RAND Bio Science Co., Ltd.		1		1		(1	)		1
SY Auto Capital Co., Ltd.		40,074		38		(74	)		40,038
Food Factory Co., Ltd.		4,216		1,528		(1,574	)		4,170
Paycoms Co., Ltd.		1,269		—		(70	)		1,199
Big Dipper Co., Ltd.		17		3		(17	)		3
RMGP Bio-Pharma Investment Fund, L.P.		5,423		1,070		—			6,493
RMGP Bio-Pharma Investment, L.P.		14		4		—			18
Wyatt Corp.		6,000		—		—			6,000
Banksalad Co., Ltd.		9,090		845		—			9,935
UPRISE, Inc.		1,250		3,998		—			5,248
Stratio, Inc.		1,000		—		—			1,000
Honest Fund, Inc.		3,999		—		—			3,999
CellinCells Co., Ltd.		2,006		3		(6	)		2,003
KB No.17 Special Purpose Acquisition Company *		1,301		—		(1,301	)		—
KB No.18 Special Purpose Acquisition Company *		3,881		—		(3,881	)		—
KB No.19 Special Purpose Acquisition Company *		2,091		—		(2,091	)		—
KB No.20 Special Purpose Acquisition Company		3,135		—		(10	)		3,125
KB No.21 Special Purpose Acquisition Company		—		3,107		—			3,107
KB No.22 Special Purpose Acquisition Company		—		2,079		—			2,079
KB No.23 Special Purpose Acquisition Company		—		1,495		—			1,495
COSES GT Co., Ltd.		5,445		5		(15	)		5,435
Bomapp Inc.		19		—		(19	)		—
Channel Corporation		14,551		—		—			14,551
MitoImmune Therapeutics		7,000		—		—			7,000
Bioprotect Ltd.		3,557		322		—			3,879
Gomi corporation Inc.		4,733		1,537		(33	)		6,237
Copin Communications, Inc. *		4,801		—		(4,801	)		—

140

KB Financial Group Inc. and Subsidiaries

Notes to the Consolidated Interim Financial Statements

September 30, 2022 and 2021 (Unaudited), and December 31, 2021

34.3 Details of significant lending transactions with related parties for the nine-month periods ended September 30, 2022 and 2021, are as follows: (cont’d)


(In millions of Korean won)	2022
	Beginning		Increase		Decrease			Ending
Associates and joint ventures
Go2joy Co., Ltd.	W	1,200	W	—	W	—		W	1,200
ClavisTherapeutics, Inc.		2,000		—		—			2,000
S&E Bio Co., Ltd.		2,000		5		—			2,005
Bluepointpartners Inc.		2,278		—		(118	)		2,160
4N Inc.		200		—		—			200
Xenohelix Co., Ltd.		2,100		—		—			2,100
Contents First Inc.		7,277		10,025		—			17,302
KB-MDI Centauri Fund LP		9,633		7,796		—			17,429
SwatchOn Inc. *		3,418		—		(3,418	)		—
OKXE Inc.		800		—		—			800
GENINUS Inc. *		5,872		—		(5,872	)		—
Checkmate Therapeutics Inc.		2,200		—		—			2,200
Mantisco Co., Ltd.		3,001		16		(1	)		3,016
IMBiologics Corp.		5,004		3		(4	)		5,003
Spark Biopharma Inc.		4,967		2,525		(17	)		7,475
G1 Playground Co., Ltd.		1,000		—		—			1,000
Pin Therapeutics Inc.		3,000		2,025		—			5,025
Hibiscus Fund LP		4,731		5,806		—			10,537
SuperNGine Co., Ltd.		1,998		11		(2	)		2,007
Desilo Inc.		3,469		—		(1	)		3,468
RMG-KB BioAccess Fund L.P.		353		2,559		—			2,912
RMG-KB BP Management Ltd.		7		67		—			74
IGGYMOB Co., Ltd.		5,006		2		(6	)		5,002
Turing Co., Ltd.		3,000		—		—			3,000
Kukka Co., Ltd.		—		2,490		—			2,490
ZIPDOC Inc.		—		2,000		—			2,000
Gushcloud Talent Agency		—		4,249		—			4,249
Grinergy		—		2,501		—			2,501
NexThera Co., Ltd.		—		2,000		—			2,000
Chabot Mobility Co., Ltd.		—		2,000		—			2,000
TeamSparta Inc.		—		4,001		—			4,001
FutureConnect Co., Ltd.		—		1,499		—			1,499
Wemade Connect Co., Ltd.		—		12,022		—			12,022
Key management personnel		4,591		4,134		(2,263	)		6,462

(In millions of Korean won)	2021
	Beginning		Increase		Decrease			Ending
Associates and joint ventures
Korea Credit Bureau Co., Ltd.	W	36	W	38	W	(36	)	W	38
Incheon Bridge Co., Ltd.		171,758		7		(14,592	)		157,173
KB Star Office Private Real Estate Master Fund No.1 *		10,000		—		—			10,000
KB Cape No.1 Private Equity Fund		2,000		—		(103	)		1,897
RAND Bio Science Co., Ltd.		1		2		(1	)		2
SY Auto Capital Co., Ltd.		40,060		50		(60	)		40,050
Food Factory Co., Ltd.		3,872		396		(34	)		4,234

141

KB Financial Group Inc. and Subsidiaries

Notes to the Consolidated Interim Financial Statements

September 30, 2022 and 2021 (Unaudited), and December 31, 2021

34.3 Details of significant lending transactions with related parties for the nine-month periods ended September 30, 2022 and 2021, are as follows: (cont’d)


(In millions of Korean won)	2021
	Beginning		Increase		Decrease			Ending
Associates and joint ventures
Paycoms Co., Ltd.	W	1,226	W	49	W	—		W	1,275
Big Dipper Co., Ltd.		4		18		(4	)		18
RMGP Bio-Pharma Investment Fund, L.P.		4,250		1,966		—			6,216
RMGP Bio-Pharma Investment, L.P.		9		4		—			13
Wyatt Corp.		6,000		5,398		—			11,398
Banksalad Co., Ltd.		9,141		—		(1,330	)		7,811
UPRISE, Inc.		750		1,000		(500	)		1,250
Stratio, Inc.		1,000		—		—			1,000
Honest Fund, Inc.		3,999		—		—			3,999
CellinCells Co., Ltd.		2,024		21		(24	)		2,021
KB No.17 Special Purpose Acquisition Company *		2,687		14		—			2,701
KB No.18 Special Purpose Acquisition Company *		3,873		99		—			3,972
KB No.19 Special Purpose Acquisition Company *		2,055		96		—			2,151
KB No.20 Special Purpose Acquisition Company		3,067		119		—			3,186
COSES GT Co., Ltd.		5,430		1		—			5,431
Bomapp Inc.		1,999		—		—			1,999
Channel Corporation		4,551		10,000		—			14,551
MitoImmune Therapeutics		5,000		2,000		—			7,000
Bioprotect Ltd.		3,264		126		—			3,390
Gomi corporation Inc.		509		4,216		(9	)		4,716
Copin Communications, Inc. *		1,500		3,301		—			4,801
Go2joy Co., Ltd.		1,200		—		—			1,200
ClavisTherapeutics, Inc.		2,000		—		—			2,000
S&E Bio Co., Ltd.		2,000		—		—			2,000
Bluepointpartners Inc.		1,432		599		—			2,031
4N Inc.		200		—		—			200
Xenohelix Co., Ltd.		2,100		—		—			2,100
Contents First Inc.		6,146		1,131		—			7,277
KB-MDI Centauri Fund LP		4,280		4,486		—			8,766
SwatchOn Inc. *		3,404		19		(59	)		3,364
OKXE Inc.		800		—		—			800
GENINUS Inc. *		5,599		7		—			5,606
Checkmate Therapeutics Inc.		—		2,200		—			2,200
Mantisco Co., Ltd.		—		3,001		—			3,001
IMBiologics Corp.		—		5,022		—			5,022
Spark Biopharma Inc.		—		4,962		—			4,962
G1 Playground Co., Ltd.		—		1,000		—			1,000
Pin Therapeutics Inc.		—		3,000		—			3,000
Hibiscus Fund LP		—		4,618		—			4,618

142

KB Financial Group Inc. and Subsidiaries

Notes to the Consolidated Interim Financial Statements

September 30, 2022 and 2021 (Unaudited), and December 31, 2021

34.3 Details of significant lending transactions with related parties for the nine-month periods ended September 30, 2022 and 2021, are as follows: (cont’d)


(In millions of Korean won)	2021
	Beginning		Increase		Decrease			Ending
Associates and joint ventures
SuperNGine Co., Ltd.	W	—	W	1,998	W	—		W	1,998
Desilo Inc.		—		3,168		—			3,168
RMG-KB BioAccess Fund L.P.		—		7		—			7
RMG-KB BP Management Ltd.		—		348		—			348
Key management		5,153		2,900		(3,672	)		4,381

*	Excluded from the Group’s related party as of September 30, 2022.

143

KB Financial Group Inc. and Subsidiaries

Notes to the Consolidated Interim Financial Statements

September 30, 2022 and 2021 (Unaudited), and December 31, 2021

34.4 Details of significant borrowing transactions with related parties for the nine-month periods ended September 30, 2022 and 2021, are as follows:


(In millions of Korean won)	2022
	Beginning		Borrowing		Repayment			Others¹			Ending
Associates and joint ventures
Korea Credit Bureau Co., Ltd.	W	10,200		—		—			(7,083	)		3,117
Incheon Bridge Co., Ltd.		35,487		28,000		(15,000	)		(2,413	)		46,074
Jungdo Co., Ltd.		4		—		—			—			4
Dae-A Leisure Co., Ltd.		17		—		—			65			82
Computerlife Co., Ltd.		—		—		—			2			2
Skydigital Inc.		85		—		—			(51	)		34
Jo Yang Industrial Co., Ltd.		1		—		—			—			1
Aju Good Technology Venture Fund		6,286		6,077		(3,840	)		(1,877	)		6,646
KB-KDBC Pre-IPO New Technology Business Investment Fund		904		—		—			(403	)		501
KB-Brain KOSDAQ Scale-up New Technology Business Investment Fund		1,524		—		—			(1,169	)		355
WJ Private Equity Fund No.1		260		—		—			(60	)		200
KB Star Office Private Real Estate Master Fund No.1 ²		2,578		—		(2,578	)		—			—
SY Auto Capital Co., Ltd.		17		—		—			(11	)		6
KB No.17 Special Purpose Acquisition Company ²		1,687		—		(1,546	)		(141	)		—
KB No.18 Special Purpose Acquisition Company ²		2,077		—		(2,016	)		(61	)		—
KB No.19 Special Purpose Acquisition Company ²		1,013		—		(1,000	)		(13	)		—
KB No.20 Special Purpose Acquisition Company		1,681		—		—			(19	)		1,662
KB No.21 Special Purpose Acquisition Company		—		2,000		—			277			2,277
KB No.22 Special Purpose Acquisition Company		—		—		—			1,970			1,970
KB No.23 Special Purpose Acquisition Company		—		2,133		—			334			2,467
RAND Bio Science Co., Ltd.		443		—		—			(439	)		4
Food Factory Co., Ltd.		839		511		(507	)		(17	)		826
Acts Co., Ltd.		154		—		—			(154	)		—
Paycoms Co., Ltd.		1		—		—			—			1
Big Dipper Co., Ltd.		—		300		(200	)		49			149
Wyatt Corp.		1		—		—			—			1
UPRISE, Inc.		4,001		—		—			(979	)		3,022
CellinCells Co., Ltd.		38		—		—			(13	)		25
COSES GT Co., Ltd.		1,939		—		—			(230	)		1,709

144

KB Financial Group Inc. and Subsidiaries

Notes to the Consolidated Interim Financial Statements

September 30, 2022 and 2021 (Unaudited), and December 31, 2021

34.4 Details of significant borrowing transactions with related parties for the nine-month periods ended September 30, 2022 and 2021, are as follows: (cont’d)


(In millions of Korean won)	2022
	Beginning		Borrowing		Repayment			Others¹			Ending
Associates and joint ventures
SwatchOn Inc. ²	W	686		—		—			(686	)		—
Gomi corporation Inc.		3,188		—		—			(2,464	)		724
S&E Bio Co., Ltd.		263		50		—			(157	)		156
KB Pre IPO Secondary Venture Fund No.1 ²		103		—		—			(103	)		—
4N Inc.		39		—		—			(36	)		3
Contents First Inc.		12,650		—		(10,000	)		4,167			6,817
December & Company Inc.		1		—		—			—			1
GENINUS Inc. ²		34,415		—		—			(34,415	)		—
Mantisco Co., Ltd.		386		—		—			889			1,275
Pin Therapeutics Inc.		—		15,000		(6,000	)		378			9,378
Spark Biopharma Inc.		6,015		30,463		(15,510	)		(1,881	)		19,087
G1 Playground Co., Ltd.		354		—		—			(329	)		25
SuperNGine Co., Ltd.		944		—		—			(739	)		205
Desilo Inc.		168		—		—			(163	)		5
Turing Co., Ltd.		1,054		—		—			304			1,358
IGGYMOB Co., Ltd.		2,938		—		—			(2,217	)		721
Kukka Co., Ltd.		—		—		—			7			7
ZIPDOC Inc.		—		—		—			1,551			1,551
TeamSparta Inc.		—		—		—			12,688			12,688
Chabot Mobility Co., Ltd.		—		—		—			69			69
Wemade Connect Co., Ltd.		—		3,294		—			3,847			7,141
Wise Asset Management Co., Ltd.		—		6		—			—			6
Channel Corporation		—		3,000		—			—			3,000
Key management personnel		16,996		15,272		(12,004	)		(1,621	)		18,643

(In millions of Korean won)	2021
	Beginning		Borrowing		Repayment			Others ¹			Ending
Associates and joint ventures
Korea Credit Bureau Co., Ltd.	W	19,982	W	—	W	(1,000	)	W	(13,468	)	W	5,514
Incheon Bridge Co., Ltd.		39,520		15,000		(20,000	)		2,965			37,485
Jungdo Co., Ltd.		4		—		—			—			4
Dae-A Leisure Co., Ltd.		636		—		(479	)		179			336
Skydigital Inc.		15		—		—			(14	)		1
Jo Yang Industrial Co., Ltd.		2		—		—			(1	)		1
Aju Good Technology Venture Fund		3,093		1,785		—			764			5,642
KB-KDBC Pre-IPO New Technology Business Investment Fund		923		—		—			(91	)		832
KB-Brain KOSDAQ Scale-up New Technology Business Investment Fund		8,097		—		—			4,731			12,828
Neomio Corp. ²		535		—		—			(535	)		—

145

KB Financial Group Inc. and Subsidiaries

Notes to the Consolidated Interim Financial Statements

September 30, 2022 and 2021 (Unaudited), and December 31, 2021

34.4 Details of significant borrowing transactions with related parties for the nine-month periods ended September 30, 2022 and 2021, are as follows: (cont’d)


(In millions of Korean won)	2021
	Beginning		Borrowing		Repayment			Others ¹			Ending
Associates and joint ventures
WJ Private Equity Fund No.1	W	349	W	—	W	—		W	(119	)	W	230
KB Star Office Private Real Estate Master Fund No.1 ²		4,255		—		(1,770	)		134			2,619
SY Auto Capital Co., Ltd.		6		—		—			9			15
KB No.17 Special Purpose Acquisition Company ²		1,711		1,546		(1,525	)		(31	)		1,701
KB No.18 Special Purpose Acquisition Company ²		2,101		2,016		(2,063	)		40			2,094
KB No.19 Special Purpose Acquisition Company ²		1,053		1,000		(1,000	)		(27	)		1,026
KB No.20 Special Purpose Acquisition Company		1,716		—		—			(34	)		1,682
RAND Bio Science Co., Ltd.		693		—		(400	)		518			811
Food Factory Co., Ltd.		1,555		507		(500	)		(827	)		735
Acts Co., Ltd.		18		—		—			44			62
Paycoms Co., Ltd.		1		—		—			—			1
Big Dipper Co., Ltd.		1		—		—			(1	)		—
Wyatt Corp.		1		—		—			—			1
Stratio, Inc.		13		—		—			(13	)		—
UPRISE, Inc.		11		—		—			584			595
CellinCells Co., Ltd.		260		—		—			(203	)		57
COSES GT Co., Ltd.		292		—		—			712			1,004
SwatchOn Inc. ²		3,947		—		(3,000	)		(79	)		868
Gomi corporation Inc.		37		—		—			354			391
S&E Bio Co., Ltd.		1,142		—		—			(653	)		489
KB Pre IPO Secondary Venture Fund No.1 ²		629		—		—			(482	)		147
4N Inc.		76		—		—			(65	)		11
Contents First Inc.		1,823		20,000		(6,000	)		(499	)		15,324
December & Company Inc.		1		—		—			—			1
GENINUS Inc. ²		13,630		—		(5,000	)		(5,017	)		3,613
Mantisco Co., Ltd.		—		—		—			394			394
Spark Biopharma Inc.		—		1,000		(3,000	)		3,492			1,492
G1 Playground Co., Ltd.		—		—		—			637			637
SuperNGine Co., Ltd.		—		—		—			1,273			1,273
Key management		17,167		13,441		(12,913	)		784			18,479

¹	Transactions between related parties, such as settlements arising from operating activities and deposits, are expressed in net amount.

²	Excluded from the Group’s related party as of September 30, 2022.

146

KB Financial Group Inc. and Subsidiaries

Notes to the Consolidated Interim Financial Statements

September 30, 2022 and 2021 (Unaudited), and December 31, 2021

34.5 Details of significant investment and withdrawal transactions with related parties for the nine-month periods ended September 30, 2022 and 2021, are as follows:


(In millions of Korean won)	2022				2021
	Equity investment and others		Withdrawal and others		Equity investment and others		Withdrawal and others
Balhae Infrastructure Company	W	—	W	21,177	W	279	W	3,620
KB GwS Private Securities Investment Trust *		—		—		—		188,836
KoFC POSCO Hanwha KB Shared Growth Private Equity Fund No.2 *		—		5		—		1,950
POSCO-KB Shipbuilding Fund		—		—		—		5,925
KB Pre IPO Secondary Venture Fund No.1 *		—		2,625		—		292
KB-KDBC Pre-IPO New Technology Business Investment Fund		—		1,400		—		3,000
KB-SJ Tourism Venture Fund		—		400		500		—
Korea Credit Bureau Co., Ltd.		—		—		—		90
KB-UTC Inno-Tech Venture Fund		—		—		5,085		—
KB-Solidus Global Healthcare Fund		—		19,630		—		—
KB-Stonebridge Secondary Private Equity Fund		4,369		3,356		10,734		10,992
KB Star Office Private Real Estate Master Fund No.1 *		—		42,118		—		601
KB SPROTT Renewable Private Equity Fund No.1		12,247		—		—		—
KB-NAU Special Situation Corporate Restructuring Private Equity Fund		1,320		3,628		6,968		—
JR Global REIT *		—		—		—		65,025
KB Bio Private Equity No.3 Ltd. *		—		10,000		10,000		—
K The 15th REIT Co., Ltd. *		—		—		8,600		8,600
Project Vanilla Co., Ltd.		—		180		—		—
KB Social Impact Investment Fund		—		—		1,500		—
KB-TS Technology Venture Private Equity Fund		—		2,968		1,510		2,976
Keystone-Hyundai Securities No.1 Private Equity Fund *		—		—		—		1,925
KB-Brain KOSDAQ Scale-up New Technology Business Investment Fund		—		2,800		8,000		8,200
Aju Good Technology Venture Fund		—		4,400		—		769
G payment Joint Stock Company		—		—		9,029		—
498/7 Owners LLC *		—		166,851		—		—
KB-KTB Technology Venture Fund		5,600		—		—		—
KB-SOLIDUS Healthcare Investment Fund		13,500		—		—		—
Paramark KB Fund No.1		12,270		—		—		—
FineKB Private Equity Fund No.1		7,500		3,100		8,375		—
KB-GeneN Medical Venture Fund No.1		2,000		—		—		—
KB-BridgePole Venture Investment Fund		850		—		—		—
KB-Kyobo New Mobility Power Fund		3,000		—		—		—
DA-Friend New Technology Investment Fund No.2		988		—		—		—
Cornerstone Pentastone Fund No.4		818		—		—		—
SKS-VLP New Technology Investment Fund No.2		1,156		—		—		—
JS Private Equity Fund No.3		1,700		—		—		—
Mirae Asset Mobility Investment Fund No.1		2,000		—		—		—
KB-FT 1st Green Growth Investment Fund		2,000		—		—		—
SKS IB NEW M&T Fund No.1		1,000		—		—		—

147

KB Financial Group Inc. and Subsidiaries

Notes to the Consolidated Interim Financial Statements

September 30, 2022 and 2021 (Unaudited), and December 31, 2021

34.5 Details of significant investment and withdrawal transactions with related parties for the nine-month periods ended September 30, 2022 and 2021, are as follows: (cont’d)


(In millions of Korean won)	2022				2021
	Equity investment and others		Withdrawal and others		Equity investment and others		Withdrawal and others
Star-Lord General Investors Private Real Estate Investment Company No.10	W	46,700	W	10	W	—	W	—
KB Co-Investment Private Equity Fund No.1		7,268		—		—		—
Glenwood Credit Private Equity Fund No.2		42,000		—		—		—
Apollo REIT PropCo LLC *		19,968		19,968		—		—
TMAP Mobility Co., Ltd.		200,000		—		—		—
POSITIVE Sobujang Venture Fund No.1		2,000		—		—		—
History 2022 Fintech Fund		2,000		—		—		—
PEBBLES-MW M.C.E New Technology Investment Fund 1st		2,000		—		—		—
KB-NP Green ESG New Technology Venture Capital Fund		5,000		—		—		—

*	Excluded from the Group’s related party as of September 30, 2022.

148

KB Financial Group Inc. and Subsidiaries

Notes to the Consolidated Interim Financial Statements

September 30, 2022 and 2021 (Unaudited), and December 31, 2021

34.6 Unused commitments provided to related parties as of September 30, 2022 and December 31, 2021, are as follows:


(In millions of Korean won or in a US Dollar or Malaysian ringgit)		September 30, 2022		December 31, 2021
Associates and joint ventures
Balhae Infrastructure Company	Purchase of securities	W	6,154	W	6,154
Korea Credit Bureau Co., Ltd.	Unused lines of credit for credit card		565		565
Incheon Bridge Co., Ltd.	Loan commitments in Korean won		20,000		20,000
	Unused lines of credit for credit card		85		93
KoFC POSCO Hanwha KB Shared Growth Private Equity Fund No.2 *	Commitments on loss absorption priority		—		10,000
SY Auto Capital Co., Ltd.	Unused lines of credit for credit card		112		98
Food Factory Co., Ltd.	Unused lines of credit for credit card		51		82
KB No.18 Special Purpose Acquisition Company *	Unused lines of credit for credit card		—		15
KB No.19 Special Purpose Acquisition Company *	Unused lines of credit for credit card		—		1
KB No.23 Special Purpose Acquisition Company	Unused lines of credit for credit card		12		—
CellinCells Co., Ltd.	Unused lines of credit for credit card		21		18
RAND Bio Science Co., Ltd.	Unused lines of credit for credit card		24		24
Big Dipper Co., Ltd.	Unused lines of credit for credit card		57		43
SwatchOn Inc. *	Unused lines of credit for credit card		—		127
Gomi corporation Inc.	Unused lines of credit for credit card		13		2
COSES GT Co., Ltd.	Unused lines of credit for credit card		25		15
GENINUS Inc. *	Unused lines of credit for credit card		—		43
Spark Biopharma Inc.	Unused lines of credit for credit card		25		33
Mantisco Co., Ltd.	Unused lines of credit for credit card		14		29
IMBiologics Corp.	Unused lines of credit for credit card		19		18
SuperNGine Co., Ltd.	Unused lines of credit for credit card		9		18
IGGYMOB Co., Ltd.	Unused lines of credit for credit card		23		14
Pin Therapeutics Inc.	Unused lines of credit for credit card		25		—

149

KB Financial Group Inc. and Subsidiaries

Notes to the Consolidated Interim Financial Statements

September 30, 2022 and 2021 (Unaudited), and December 31, 2021

34.6 Unused commitments provided to related parties as of September 30, 2022 and December 31, 2021, are as follows: (cont’d)


(In millions of Korean won or in a US Dollar or Malaysian ringgit)		September 30, 2022		December 31, 2021
Associates and joint ventures
Grinergy	Unused lines of credit for credit card	W	9	W	—
S&E Bio Co., Ltd.	Unused lines of credit for credit card		45		—
Desilo Inc.	Unused lines of credit for credit card		3		—
ZIPDOC Inc.	Unused lines of credit for credit card		45		—
Wemade Connect Co., Ltd.	Unused lines of credit for credit card		178		—
KB Pre IPO Secondary Venture Fund No.1 *	Commitments on loss absorption priority		—		1,671
KB-TS Technology Venture Private Equity Fund	Purchase of securities		440		616
KB SPROTT Renewable Private Equity Fund No.1	Purchase of securities		5,140		18,704
KB-Stonebridge Secondary Private Equity Fund	Purchase of securities		1,210		5,579
KB-NAU Special Situation Corporate Restructuring Private Equity Fund	Purchase of securities		15,288		16,608
KB-KTB Technology Venture Fund	Purchase of securities		16,800		22,400
KB-SOLIDUS Healthcare Investment Fund	Purchase of securities		74,700		88,200
KB Co-Investment Private Equity Fund No.1	Purchase of securities		15,732		20,000
KB-Badgers Future Mobility ESG Fund No.1	Purchase of securities		35,000		—
KB-NP Green ESG New Technology Venture Capital Fund	Purchase of securities		45,000		—
FineKB Private Equity Fund No.1	Purchase of securities		9,125		16,625
KB-Solidus Global Healthcare Fund	Purchase of securities		2,120		2,120
	Commitments on loss absorption priority		4,500		4,500
Paramark KB Fund No.1	Purchase of securities		15,690		27,960
RMGP Bio-Pharma Investment Fund, L.P.	Purchase of securities		USD 4,348,750		USD 5,169,932
RMGP Bio-Pharma Investment, L.P.	Purchase of securities		USD 11,159		USD 12,615
KB-MDI Centauri Fund LP	Purchase of securities		USD 1,744,518		USD 6,622,923
Hibiscus Fund LP	Purchase of securities		MYR 16,666,666		MYR 33,333,333
RMG-KB BP Management Ltd.	Purchase of securities		USD 674,062		USD 616,170
RMG-KB BioAccess Fund L.P.	Purchase of securities		USD 26,422,614		USD 29,702,324
Key management personnel	Loan commitments in Korean won		2,563		2,018

*	Excluded from the Group’s related party as of September 30, 2022.

150

KB Financial Group Inc. and Subsidiaries

Notes to the Consolidated Interim Financial Statements

September 30, 2022 and 2021 (Unaudited), and December 31, 2021

34.7 Details of compensation to key management personnel for the nine-month periods ended September 30, 2022 and 2021, are as follows:


(In millions of Korean won)	2022
	Short-term employee benefits		Post- employment benefits		Share-based payments		Total
Registered directors (executive)	W	5,647	W	650	W	3,254	W	9,551
Registered directors (non-executive)		794		—		—		794
Non-registered directors		12,229		401		6,957		19,587

	W	18,670	W	1,051	W	10,211	W	29,932


(In millions of Korean won)	2021
	Short-term employee benefits		Post- employment benefits		Share-based payments		Total
Registered directors (executive)	W	6,013	W	728	W	8,947	W	15,688
Registered directors (non-executive)		746		—		—		746
Non-registered directors		9,671		286		11,062		21,019

	W	16,430	W	1,014	W	20,009	W	37,453

34.8 Details of collateral provided by related parties as of September 30, 2022 and December 31, 2021, are as follows:


(In millions of Korean won)	Assets held as collateral	September 30, 2022		December 31, 2021
Associates
KB Star Office Private Real Estate Master Fund No.1 *	Real estate	W	—	W	13,000
Key management personnel	Time deposits and others		347		745
	Real estate		9,763		5,176

*	Excluded from the Group’s related party as of September 30, 2022.

As of September 30, 2022, Incheon Bridge Co., Ltd., a related party, provides fund management account, civil engineering works insurance, and management and operations rights as senior collateral amounting to W 611,000 million to the project financing group consisting of the Group and 5 other institutions, and as subordinated collateral amounting to W 384,800 million to subordinated debt holders consisting of the Group and 2 other institutions. Also, it provides certificate of credit guarantee amounting to W 400,000 million as collateral to the project financing group consisting of the Group and 5 other institutions.

151

KB Financial Group Inc. and Subsidiaries

Notes to the Consolidated Interim Financial Statements

September 30, 2022 and 2021 (Unaudited), and December 31, 2021

35. Events after the Reporting Period

According to the resolution of the board of directors on October 25, 2022, the quarterly dividend per share of W 500 (total dividend: W 194,817 million) with dividend record date of September 30, 2022 were paid on November 10, 2022. The Company’s financial statements as of September 30, 2022, do not reflect this dividend payable.

152

EX-99.2

Exhibit 99.2

KB Financial Group Inc.

Separate Interim Financial Statements

September 30, 2022 and 2021

(Unaudited)

(With Independent Auditors’ Review Report Thereon)

Contents


	Page
Independent Auditors’ Review Report		1

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

Independent Auditors’ Review Report

Based on a report originally issued in Korean

The Board of Directors and Stockholders

KB Financial Group Inc.:

Reviewed financial statements

We have reviewed the accompanying condensed separate interim financial statements of KB Financial Group Inc. (the “Company”), which comprise the separate interim statement of financial position as of September 30, 2022, the separate interim statements of comprehensive income for the three-month and nine-month periods ended September 30, 2022 and 2021, the separate interim statements of changes in equity and cash flows for the nine-month periods ended September 30, 2022 and 2021 and notes, comprising a summary of significant accounting policies and other explanatory information.

Management’s responsibility

Management is responsible for the preparation and fair presentation of these condensed separate interim financial statements in accordance with Korean International Financial Reporting Standards (“K-IFRS”) No.1034 Interim Financial Reporting, and for such internal control as management determines is necessary to enable the preparation of the condensed separate interim financial statements that are free from material misstatement, whether due to fraud or error.

Auditors’ review responsibility

Our responsibility is to issue a report on these condensed separate interim financial statements based on our reviews.

Conclusion

Based on our reviews, nothing has come to our attention that causes us to believe that the accompanying condensed separate interim financial statements referred to above are not prepared, in all material respects, in accordance with K-IFRS No.1034 Interim Financial Reporting.

Emphasis of matter

The following matter may be helpful to the readers in their understanding of the condensed separate interim financial statements. Our review conclusion is not affected by this matter.

As described in note 23.2.b) to the condensed separate interim financial statements, the proliferation of COVID-19 has had a negative influence on the global economy, which may have an impact on expected credit losses and potential impairment of assets in a particular portfolio, and it could negatively affect the revenue generation capability of the Company.

Other matters

The procedures and practices utilized in the Republic of Korea to review such condensed separate interim financial statements may differ from those generally accepted and applied in other countries.

The separate statement of financial position of the Company as of December 31, 2021, and the related separate statements of comprehensive income, changes in equity and cash flows for the year then ended, which are not accompanying this report, were audited by us in accordance with Korean Standards on Auditing and our report thereon, dated March 17, 2022, expressed an unqualified opinion. The accompanying separate statement of financial position of the Company as of December 31, 2021, presented for comparative purposes, is consistent, in all material respects, with the audited separate statement of financial position from which it has been derived.

</s/>KPMG Samjong Accounting Corp.

Seoul, Korea

November 14, 2022

This report is effective as of November 14, 2022, 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 the above review report has not been updated to reflect the impact of such subsequent events or circumstances, if any.

KB Financial Group Inc.

Separate Interim Statements of Financial Position

September 30, 2022 and December 31, 2021

(In millions of Korean won)


	Notes		September 30, 2022 (Unaudited)			December 31, 2021
Assets
Cash and due from financial institutions		4,5,6,22	W	1,032,895		W	608,076
Financial assets at fair value through profit or loss		4,5,7		1,230,069			440,760
Loans measured at amortized cost		4,5,8		308,918			249,128
Investments in subsidiaries		9		26,741,438			26,741,438
Property and equipment				4,279			4,444
Intangible assets				17,119			16,673
Net defined benefit assets		12		—			221
Deferred income tax assets		10		18,577			5,583
Other assets		4,5		1,289,285			805,056

Total assets			W	30,642,580		W	28,871,379

Liabilities
Debentures		4,5,11	W	5,035,606		W	5,552,791
Net defined benefit liabilities		12		1,745			—
Current income tax liabilities				870,272			570,519
Other liabilities		4,5		227,350			235,095

Total liabilities				6,134,973			6,358,405

Equity		13
Share capital				2,090,558			2,090,558
Hybrid securities				4,433,981			2,837,981
Capital surplus				14,754,747			14,754,747
Accumulated other comprehensive income				(8,685	)		(8,330	)
Retained earnings				4,073,194			3,974,206
Treasury shares				(836,188	)		(1,136,188	)

Total equity				24,507,607			22,512,974

Total liabilities and equity			W	30,642,580		W	28,871,379

The above separate interim statements of financial position should be read in conjunction with the accompanying notes.

KB Financial Group Inc.

Separate Interim Statements of Comprehensive Income

Three-Month and Nine-Month Periods Ended September 30, 2022 and 2021

(In millions of Korean won, except per share amounts)


	Notes		2022 (Unaudited)						2021 (Unaudited)
			Three months			Nine months			Three months			Nine months
Interest income			W	4,921		W	12,406		W	3,064		W	6,371
Interest income from financial instruments at amortized cost				4,249			10,414			1,544			4,192
Interest income from financial instruments at fair value through profit or loss				672			1,992			1,520			2,179
Interest expense				(29,359	)		(83,951	)		(29,103	)		(91,573	)

Net interest expense		15		(24,438)			(71,545)			(26,039)			(85,202)

Fee and commission income				417			1,576			232			694
Fee and commission expense				(1,380	)		(6,674	)		(1,176	)		(6,409	)

Net fee and commission expense		16		(963	)		(5,098	)		(944	)		(5,715	)

Net gains (losses) on financial instruments at fair value through profit or loss		17		(230	)		(17,090	)		4,540			15,893

Net other operating income		18		200,000			1,871,224			170,000			1,617,949

General and administrative expenses		19		(21,428)			(63,074)			(21,063)			(65,124)

Operating income (loss) before provision for credit losses				152,941			1,714,417			126,494			1,477,801
Provision (Reversal) for credit losses				(209	)		(211	)		2			(3	)

Net operating income (loss)				152,732			1,714,206			126,496			1,477,798
Net non-operating income (expenses)				988			553			1,454			1,306

Profit (loss) before income tax benefit				153,720			1,714,759			127,950			1,479,104
Income tax benefit		20		4,216			12,860			1,443			2,352

Profit (loss) for the period				157,936			1,727,619			129,393			1,481,456

Items that will not be reclassified to profit or loss:
Remeasurements of net defined benefit liabilities				(74	)		(355	)		(42	)		(86	)

Other comprehensive loss for the period, net of tax				(74	)		(355	)		(42	)		(86	)

Total comprehensive income (loss) for the period			W	157,862		W	1,727,264		W	129,351		W	1,481,370

Earnings (loss) per share		21
Basic earnings (loss) per share			W	317		W	4,214		W	281		W	3,670
Diluted earnings (loss) per share				311			4,120			276			3,594

The above separate interim statements of comprehensive income should be read in conjunction with the accompanying notes.

KB Financial Group Inc.

Separate Interim Statements of Changes in Equity

Nine-Month Periods Ended September 30, 2022 and 2021


(In millions of Korean won)	Share capital		Hybrid securities		Capital surplus		Accumulated other comprehensive income			Retained earnings			Treasury shares			Total equity
Balance as of January 1, 2021	W	2,090,558	W	1,695,778	W	14,754,747	W	(8,032	)	W	3,588,757		W	(1,136,188	)	W	20,985,620

Comprehensive income for the period
Profit for the period		—		—		—		—			1,481,456			—			1,481,456
Remeasurements of net defined benefit liabilities		—		—		—		(86	)		—			—			(86	)

Total comprehensive income for the period		—		—		—		(86	)		1,481,456			—			1,481,370

Transactions with shareholders
Annual dividends		—		—		—		—			(689,653	)		—			(689,653	)
Quarterly dividends		—		—		—		—			(292,226	)		—			(292,226	)
Issuance of hybrid securities		—		873,916		—		—			—			—			873,916
Dividends on hybrid securities		—		—		—		—			(51,439	)		—			(51,439	)

Total transactions with shareholders		—		873,916		—		—			(1,033,318	)		—			(159,402	)

Balance as of September 30, 2021 (Unaudited)	W	2,090,558	W	2,569,694	W	14,754,747	W	(8,118	)	W	4,036,895		W	(1,136,188	)	W	22,307,588

Balance as of January 1, 2022	W	2,090,558	W	2,837,981	W	14,754,747	W	(8,330	)	W	3,974,206		W	(1,136,188	)	W	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)	W	2,090,558	W	4,433,981	W	14,754,747	W	(8,685	)	W	4,073,194		W	(836,188	)	W	24,507,607

The above separate interim statements of changes in equity should be read in conjunction with the accompanying notes.

KB Financial Group Inc.

Separate Interim Statements of Cash Flows

Nine-Month Periods Ended September 30, 2022 and 2021

(In millions of Korean won)


	Notes		2022 (Unaudited)			2021 (Unaudited)
Cash flows from operating activities
Profit for the period			W	1,727,619		W	1,481,456

Adjustments for non-cash items
Depreciation and amortization expense				4,486			4,719
Provision for credit losses				211			3
Share-based payments				2,282			7,193
Net interest expense				2,477			3,477
Valuation losses (gains) on financial assets at fair value through profit or loss				41,846			(1,311	)
Other expenses				1,633			280

				52,935			14,361

Changes in operating assets and liabilities
Due from financial institutions				(30,000	)		(90,000	)
Deferred income tax assets				(12,860	)		(2,384	)
Other assets				385,648			9,141
Other liabilities				(578,875	)		(9,028	)

				(236,087	)		(92,271	)

Net cash inflow from operating activities				1,544,467			1,403,546

Cash flows from investing activities
Acquisition of financial assets at fair value through profit or loss				(830,000	)		(3,061,906	)
Disposal of financial assets at fair value through profit of loss				—			3,096,540
Acquisition of subsidiaries				—			(19,269	)
Acquisition of loans measured at amortized cost				(60,000	)		—
Acquisition of property and equipment				(1,425	)		(521	)
Disposal of property and equipment				—			194
Acquisition of intangible assets				(965	)		(2,394	)
Disposal of intangible assets				20			3,482
Net increase in guarantee deposits paid				(2,325	)		(2,358	)
Other investing activities				(824	)		(1,083	)

Net cash outflow from investing activities				(895,519	)		12,685

Cash flows from financing activities
Decrease in borrowings				—			(100,000	)
Increase in debentures				498,898			389,405
Decrease in debentures				(1,020,000	)		(920,000	)
Dividends paid to shareholders				(1,242,933	)		(981,879	)
Redemption of principal elements of lease payments				(396	)		(367	)
Issuance of hybrid securities				1,596,000			873,916
Dividends paid on hybrid securities				(85,698	)		(51,439	)

Net cash outflow from financing activities				(254,129	)		(790,364	)

Net increase in cash and cash equivalents				394,819			625,867
Cash and cash equivalents at the beginning of the period		22		518,073			23,081

Cash and cash equivalents at the end of the period		22	W	912,892		W	648,948

The above separate interim statements of cash flows should be read in conjunction with the accompanying notes.

KB Financial Group Inc.

Notes to the Separate Interim Financial Statements

September 30, 2022 and 2021 (Unaudited), and December 31, 2021

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, 2022, is W2,090,558 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 Company acquired Prudential Life Insurance Company of Korea Ltd., which was classified as a subsidiary.

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.

KB Financial Group Inc.

Notes to the Separate Interim Financial Statements

September 30, 2022 and 2021 (Unaudited), and December 31, 2021

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 separate interim financial statements for the nine-month period ended September 30, 2022, 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 separate interim financial statements have been prepared in accordance with Korean IFRS which is effective or early adopted as of September 30, 2022.

KB Financial Group Inc.

Notes to the Separate Interim Financial Statements

September 30, 2022 and 2021 (Unaudited), and December 31, 2021

2.1.1 The Company has applied the following amended standards for the first time for its annual reporting period commencing January 1, 2022.

•

Amendments to Korean IFRS No.1116 Leases - COVID-19-Related Rent Concessions, etc. beyond June 30, 2021

•

Amendments to Korean IFRS No.1103 Business Combination – Reference to the Conceptual Framework

•

Amendments to Korean IFRS No.1016 Property, Plant and Equipment – Proceeds Before Intended Use

•

Amendments to Korean IFRS No.1037 Provisions, Contingent Liabilities and Contingent Assets – Onerous Contracts: Cost of Fulfilling a Contract

•

Annual improvements to Korean IFRS 2018-2020

These amendments do not have a significant impact on the financial statements.

•

Korean IFRS No.1101 First-time Adoption of Korean International Financial Reporting Standards – Subsidiaries that are first-time adopters

•

Korean IFRS No.1109 Financial Instruments – Fees related to the 10% test for derecognition of financial liabilities

•

Korean IFRS No.1116 Leases – Lease incentives

•

Korean IFRS No.1041 Agriculture – Measuring fair value

KB Financial Group Inc.

Notes to the Separate Interim Financial Statements

September 30, 2022 and 2021 (Unaudited), and December 31, 2021

2.1.2 The following amended standards have been published that are not mandatory for December 31, 2022 reporting period and have not been adopted by the Company.

•

Amendments to Korean IFRS No.1001 Presentation of Financial Statements – Classification of Liabilities as Current or Non-current

The amendments clarify that liabilities are classified as either current or non-current, depending on the substantive rights that exist at the end of the reporting period. Classification is unaffected by the likelihood that an entity will exercise the right to defer settlement of the liability or the management’s expectations thereof. Also, the settlement of liability includes the transfer of the entity’s own equity instruments; however, it would be excluded if an option to settle the liability by the transfer of the entity’s own equity instruments is recognized separately from the liability as an equity component of a compound financial instrument. The amendments should be applied for annual reporting periods beginning on or after January 1, 2023, and earlier application is permitted. The Company does not expect that these amendments 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. The amendments should be applied for annual reporting periods beginning on or after January 1, 2023, and earlier application is permitted. The Company does not expect that these amendments have a significant impact on the financial statements.

•

Amendments to Korean IFRS No.1008 Accounting Policies, Changes in Accounting Estimates and Errors – Definition of Accounting Estimates

The amendments introduce the definition of accounting estimates and clarify how to distinguish changes in accounting estimates from changes in accounting policies. The amendments should be applied for annual reporting periods beginning on or after January 1, 2023, and earlier application is permitted. The Company does not expect that these amendments have a significant impact on the financial statements.

•

Amendments to Korean IFRS No.1012 Income Taxes – Deferred Tax Related to Assets and Liabilities Arising from a Single Transaction

The amendments narrow the scope of the deferred tax recognition exemption so that it no longer applies to transactions that, on initial recognition, give rise to equal taxable and deductible temporary differences. The amendments should be applied for annual reporting periods beginning on or after January 1, 2023, and earlier application is permitted. The Company does not expect that these amendments have a significant impact on the financial statements.

KB Financial Group Inc.

Notes to the Separate Interim Financial Statements

September 30, 2022 and 2021 (Unaudited), and December 31, 2021

2.2 Measurement Basis

The separate financial statements have been prepared under the historical cost convention unless otherwise specified.

2.3 Functional and Presentation Currency

Items included in the separate financial statements of the Company are measured using the currency of the primary economic environment in which the Company operates (“functional currency”). The separate financial statements are presented in Korean won, which is the Company’s functional and presentation currency.

2.4 Critical Accounting Estimates

The Company applies accounting policies and uses judgements, accounting estimates, and assumptions that may have a significant impact on the assets (liabilities) and incomes (expenses) in preparing the separate financial statements. Management’s estimates of outcomes may differ from actual outcomes if management’s estimates and assumptions based on management’s best judgment are different from the actual environment.

Estimates and underlying assumptions are continually evaluated, and changes in accounting estimates are recognized in the period in which the estimates are changed and in any future periods affected.

Significant accounting estimates and assumptions applied in the preparation of these separate interim financial statements are the same as those applied to the separate financial statements for the year ended December 31, 2021, except for the estimates used to determine income tax expense.

3. Significant Accounting Policies

The significant accounting policies and calculation methods applied in the preparation of these separate interim financial statements are the same as those applied to the separate financial statements for the year ended December 31, 2021, except for the impact of changes due to adopting new and amended standards and interpretations described in Note 2.1 and below paragraph.

Income tax expense for the interim period is measured applying the expected average annual income tax rate applicable on expected total annual income.

KB Financial Group Inc.

Notes to the Separate Interim Financial Statements

September 30, 2022 and 2021 (Unaudited), and December 31, 2021

4. Financial Risk Management

4.1 Summary

4.1.1 Overview of financial risk management policy

The financial risks that the Company is exposed to are credit risk, market risk, liquidity risk, and others.

This note regarding financial risk management provides information about the risks that the Company is exposed to and about its objectives, policies, risk assessment and management procedures, and capital management. Additional quantitative information is disclosed throughout the separate financial statements.

The Company’s risk management system focuses on efficiently supporting long-term strategy and management decisions of the Company by increasing risk transparency, preventing risk transfer between subsidiaries and preemptive response to rapidly changing financial environments. Credit risk, market risk, operational risk, interest rate risk, insurance risk, credit concentration risk, strategy risk, and reputation risk are recognized as significant risks and measured and managed by quantifying them in the form of internal capital or Value at Risk (“VaR”) using statistical methods.

4.1.2 Risk management organization

4.1.2.1 Risk Management Committee

4.1.2.2 Risk Management Council

The Risk Management Council is responsible for consulting on matters delegated by the Risk Management Committee and requests for review by the Group Management Executive Committee, consulting on details of each subsidiary’s risk management policies and procedures, monitoring the Group’s risk management status, and establishing and implementing necessary measures.

4.1.2.3 Risk Management Department

The Risk Management Department performs the Company’s risk management detailed policies, procedures, and business processes, and is responsible for calculating the Group’s risk-weighted assets, monitoring and managing internal capital limits.

4.2 Credit Risk

4.2.1 Overview of credit risk

Credit risk is the risk of loss from the portfolio of assets held due to the counterparty’s default, breach of contract, and deterioration of credit quality. For risk management purposes, the Company considers default risk of individual borrowers.

KB Financial Group Inc.

Notes to the Separate Interim Financial Statements

September 30, 2022 and 2021 (Unaudited), and December 31, 2021

4.2.2 Credit risk management

The Company measures the expected losses of assets subject to credit risk management and uses them as a management indicator.

4.2.3 Maximum exposure to credit risk

The Company’s maximum exposures to credit risk without consideration of collateral values in relation to financial instruments other than equity securities as of September 30, 2022 and December 31, 2021, are as follows:


(In millions of Korean won)	September 30, 2022		December 31, 2021
Due from financial institutions	W	1,032,895	W	608,076
Loans measured at amortized cost *		308,918		249,128
Loans measured at fair value through profit or loss		43,367		51,154
Other financial assets *		245,144		36,078

	W	1,630,324	W	944,436

*	After netting of allowance

4.2.4 Credit risk of loans

The Company maintains allowances for loan losses associated with credit risk of loans to manage its credit risk.

The Company assesses expected credit losses and recognizes loss allowances of financial assets at amortized cost and financial asset at fair value through other comprehensive income. Financial assets at fair value through profit or loss are excluded. Expected credit losses are a probability-weighted estimate of possible credit losses occurring in a certain range by reflecting reasonable and supportable information that is reasonably available at the end of the reporting period without undue cost or effort, including information about past events, current conditions, and forecasts of future economic conditions. The Company measures the expected credit losses on loans classified as financial assets at amortized cost, by deducting allowances for credit losses. The expected credit losses of loans classified as financial assets at fair value through other comprehensive income are presented in other comprehensive income in the financial statements.

Credit qualities of loans measured at amortized cost as of September 30, 2022 and December 31, 2021, are classified as follows:


(In millions of Korean won)	September 30, 2022
	12-month expected credit losses		Lifetime expected credit losses				Not applying expected credit losses		Total
	12-month expected credit losses		Non-impaired		Impaired		Not applying expected credit losses		Total
Loans measured at amortized cost *
Corporate
Grade 1	W	310,000	W	—	W	—	W	—	W	310,000
Grade 2		—		—		—		—		—
Grade 3		—		—		—		—		—
Grade 4		—		—		—		—		—
Grade 5		—		—		—		—		—

	W	310,000	W	—	W	—	W	—	W	310,000

KB Financial Group Inc.

Notes to the Separate Interim Financial Statements

September 30, 2022 and 2021 (Unaudited), and December 31, 2021

4.2.4 Credit risk of loans (cont’d)

(In millions of Korean won)


	December 31, 2021
	12-month expected credit losses		Lifetime expected credit losses				Not applying expected credit losses		Total
	12-month expected credit losses		Non-impaired		Impaired		Not applying expected credit losses		Total
Loans measured at amortized cost *
Corporate
Grade 1	W	250,000	W	—	W	—	W	—	W	250,000
Grade 2		—		—		—		—		—
Grade 3		—		—		—		—		—
Grade 4		—		—		—		—		—
Grade 5		—		—		—		—		—

	W	250,000	W	—	W	—	W	—	W	250,000

*	Before netting of allowance

Credit qualities of loans graded according to the probability of default as of September 30, 2022 and December 31, 2021, are as follows:


		Range of probability of default (%)
Grade 1		0.0 ~ 1.0
Grade 2		1.0 ~ 5.0
Grade 3		5.0 ~ 15.0
Grade 4		15.0 ~ 30.0
Grade 5		30.0 ~

4.2.5 Credit risk of due from financial institutions

Credit qualities of due from financial institutions as of September 30, 2022 and December 31, 2021, are as follows:

(In millions of Korean won)


	September 30, 2022
	12-month expected credit losses		Lifetime expected credit losses				Not applying expected credit losses		Total
	12-month expected credit losses		Non-impaired		Impaired		Not applying expected credit losses		Total
Due from financial institutions measured at amortized cost
Grade 1	W	1,032,895	W	—	W	—	W	—	W	1,032,895
Grade 2		—		—		—		—		—
Grade 3		—		—		—		—		—
Grade 4		—		—		—		—		—
Grade 5		—		—		—		—		—

	W	1,032,895	W	—	W	—	W	—	W	1,032,895

KB Financial Group Inc.

Notes to the Separate Interim Financial Statements

September 30, 2022 and 2021 (Unaudited), and December 31, 2021

4.2.5 Credit risk of due from financial institutions (cont’d)


(In millions of Korean won)	December 31, 2021
	12-month expected credit losses		Lifetime expected credit losses				Not applying expected credit losses		Total
	12-month expected credit losses		Non-impaired		Impaired		Not applying expected credit losses		Total
Due from financial institutions measured at amortized cost
Grade 1	W	608,076	W	—	W	—	W	—	W	608,076
Grade 2		—		—		—		—		—
Grade 3		—		—		—		—		—
Grade 4		—		—		—		—		—
Grade 5		—		—		—		—		—

	W	608,076	W	—	W	—	W	—	W	608,076

4.2.6 Credit risk concentration analysis

4.2.6.1 Classifications of corporate loans by industry as of September 30, 2022 and December 31, 2021, are as follows:


(In millions of Korean won)	September 30, 2022
	Corporate loans*		%		Allowances			Carrying amount
Financial institutions	W	353,367		100.00	W	(1,082	)	W	352,285

(In millions of Korean won)	December 31, 2021
	Corporate loans*		%		Allowances			Carrying amount
Financial institutions	W	301,154		100.00	W	(872	)	W	300,282

*	Amount includes loans measured at fair value through profit or loss and amortized cost.

4.2.6.2 Classifications of due from financial institutions by industry as of September 30, 2022 and December 31, 2021, are as follows:

(In millions of Korean won)

September 30, 2022

Amount

Allowances

Carrying amount

Due from financial institutions measured at amortized cost

Financial institutions

1,032,895

100.00

—

1,032,895

(In millions of Korean won)

December 31, 2021

Amount

Allowances

Carrying amount

Due from financial institutions measured at amortized cost

Financial institutions

608,076

100.00

—

608,076

KB Financial Group Inc.

Notes to the Separate Interim Financial Statements

September 30, 2022 and 2021 (Unaudited), and December 31, 2021

4.3 Liquidity Risk

4.3.1 Overview of liquidity risk

Liquidity risk is a risk that the Company becomes insolvent due to the mismatch between the inflow and outflow of funds, unexpected cash outflows, or a risk of loss due to financing funds at a high interest rate or disposing of securities at an unfavorable price due to lack of available funds. The Company manages its liquidity risk through analysis of the contractual maturity of all financial assets and liabilities and discloses in six categories such as on demand, less than one month, between one month to three months, between three months to one year, between one year to five years, and over five years.

4.3.2. Liquidity risk management

4.3.3. Analysis of remaining contractual maturity of financial liabilities

The cash flows disclosed in the maturity analysis are undiscounted contractual amounts including principal and future interest payments; as such, amounts in the table below do not match with those in the statements of financial position which are based on discounted cash flows. The future interest payments for floating-rate liabilities are calculated on the assumption that the current interest rate is the same until maturity.

Remaining contractual maturity of financial liabilities as of September 30, 2022 and December 31, 2021, are as follows:


(In millions of Korean won)	September 30, 2022
	On Demand		Up to 1 month		1-3 months		3-12 months		1-5 years		Over 5 years		Total
Financial liabilities
Debentures	W	—	W	5,723	W	101,188	W	990,562	W	3,058,986	W	1,337,711	W	5,494,170
Lease liabilities		—		48		90		390		454		—		982
Other financial liabilities		—		5,487		15,486		—		—		—		20,973

	W	—	W	11,258	W	116,764	W	990,952	W	3,059,440	W	1,337,711	W	5,516,125


(In millions of Korean won)	December 31, 2021
	On Demand		Up to 1 month		1-3 months		3-12 months		1-5 years		Over 5 years		Total
Financial liabilities
Debentures	W	—	W	5,723	W	281,461	W	910,178	W	3,398,017	W	1,403,061	W	5,998,440
Lease liabilities		—		40		63		263		333		—		699
Other financial liabilities		—		1,491		—		—		—		—		1,491

	W	—	W	7,254	W	281,524	W	910,441	W	3,398,350	W	1,403,061	W	6,000,630

KB Financial Group Inc.

Notes to the Separate Interim Financial Statements

September 30, 2022 and 2021 (Unaudited), and December 31, 2021

4.4 Market Risk

4.4.1 Concept

Market risk refers to risks that can result in losses due to changes in market factors such as interest rate, stock price, and foreign exchange rate, etc. The Company manages the market risks by dividing them into those arising from the trading position and those arising from the non-trading position.

4.4.2 Trading position

In accordance with Financial Holding Companies Act, the Company’s main business is to control financial companies or companies closely related to the financial service. And the Company cannot perform any other business other than managing activities as a holding company, therefore there is no risk of trading position.

4.4.3 Non-trading position

Non-trading position refers to the part except trading position, and the main risk the Company is managing is interest rate risk.

4.4.3.1 Interest rate risk

(a) Definition of interest rate risk

Interest rate risk refers to the risk of changes in the value (fair value) of the items in the statement of financial position due to changes in interest rate and the risk of changes in cash flows related to interest income and interest expense arising from investment and financing activities.

(b) Observation method and management indicator on interest rate risk

The main objective of interest rate risk management is to protect the value changes from interest rate fluctuations. In addition to the Interest Rate Risk in the Banking Book (“IRRBB”) standard methodology required for disclosure, the Company applies the IRRBB methodology to measure and manage interest rate risk in a historical-simulation method including interest rate volatility during the past financial crisis (FY2008-FY2009).

KB Financial Group Inc.

Notes to the Separate Interim Financial Statements

September 30, 2022 and 2021 (Unaudited), and December 31, 2021

5. Financial Assets and Financial Liabilities

5.1 Classification and Fair Value of Financial Instruments

5.1.1 Carrying amount and fair value of financial assets and liabilities by category as of September 30, 2022 and December 31, 2021, are as follows:


(In millions of Korean won)	September 30, 2022
	Carrying amount		Fair value
Financial assets
Financial assets at fair value through profit or loss
Hybrid securities	W	884,569	W	884,569
Beneficiary certificates		302,133		302,133
Loans		43,367		43,367
Financial assets at amortized cost
Due from financial institutions		1,032,895		1,032,895
Loans		308,918		308,918
Other financial assets		245,144		245,144

	W	2,817,026	W	2,817,026

Financial liabilities
Financial liabilities at amortized cost
Debentures	W	5,035,606	W	4,663,198
Other financial liabilities		32,669		32,669

	W	5,068,275	W	4,695,867


(In millions of Korean won)	December 31, 2021
	Carrying amount		Fair value
Financial assets
Financial assets at fair value through profit or loss
Hybrid securities	W	389,606	W	389,606
Loans		51,154		51,154
Financial assets at amortized cost
Due from financial institutions		608,076		608,076
Loans		249,128		249,128
Other financial assets		36,078		36,078

	W	1,334,042	W	1,334,042

Financial liabilities
Financial liabilities at amortized cost
Debentures	W	5,552,791	W	5,509,648
Other financial liabilities		13,913		13,913

	W	5,566,704	W	5,523,561

Fair value is defined as the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants. The Company discloses the fair value of each class of assets and liabilities in a way that permits it to be compared with its carrying amount at the end of each reporting period. The best evidence of fair value of financial instruments is quoted price in an active market.

KB Financial Group Inc.

Notes to the Separate Interim Financial Statements

September 30, 2022 and 2021 (Unaudited), and December 31, 2021

5.1.1 Carrying amount and fair value of financial assets and liabilities by category as of September 30, 2022 and December 31, 2021, are as follows: (cont’d)

Methods of determining fair value of financial instruments are as follows:


Cash and due from financial institutions		Fair value of cash is same as carrying amount. Carrying amount of demand deposit and settlement deposit is a reasonable approximation of fair value because these financial instruments do not have a fixed maturity and are receivable on demand. Fair value of general deposit is measured using Discounted Cash Flow (“DCF”) Model.

Securities		Fair value of financial instruments that are quoted in an active market is determined using the quoted prices. If there is no quoted price, fair value is determined using external professional valuation institutions. The institutions use one or more valuation techniques that are deemed appropriate considering the characteristics of the financial instruments among DCF Model, Imputed Market Value Model, Free Cash Flow to Equity Model, Dividend Discount Model, Risk Adjusted Discount Rate Method, and Net Asset Value Method.

Derivatives		Fair value of exchange traded derivatives is determined using quoted price in an active market, and fair value of OTC derivatives is determined using valuation techniques. The Company uses internally developed valuation models that are widely used by market participants to determine fair value of plain vanilla OTC derivatives including options, interest rate swaps, and currency swaps, based on observable market parameters. However, some complex financial instruments are valued using appropriate models developed from generally accepted market valuation models including the Finite Difference Method (“FDM”), and the MonteCarlo Simulation or valuation results from independent external professional valuation institution.

Loans measured at amortized cost		Fair value of loans is determined using DCF model discounting the expected cash flows, which are contractual cash flows adjusted by the expected prepayment rate, at an appropriate discount rate.

Borrowings		DCF model is used to determine the fair value of borrowings, but in the case of short-term maturity, carrying amount is a reasonable approximation of fair value.

Debentures		Fair value is determined by using valuation results of external professional valuation institutions, which are calculated using market inputs.

Other financial assets and other financial liabilities		Carrying amount is a reasonable approximation of fair value because other financial assets and other financial liabilities are temporary accounts used for other various transactions and their maturities are relatively short or not defined.

KB Financial Group Inc.

Notes to the Separate Interim Financial Statements

September 30, 2022 and 2021 (Unaudited), and December 31, 2021

5.1.2 Fair value hierarchy

The Company believes that valuation techniques used for measuring the fair value of financial instruments are reasonable and that the fair value recognized in the statements of financial position is appropriate. However, the fair value of the financial instruments recognized in the statements of financial position may be different if other valuation techniques or assumptions are used. Additionally, as there are a variety of valuation techniques and assumptions used in measuring fair value, it may be difficult to reasonably compare the fair value with that of other financial institutions.

The Company classifies and discloses fair value of the financial instruments into the three fair value levels as follows:


Level 1 :		The fair values are based on quoted prices (unadjusted) in active markets for identical assets or liabilities that the entity can access at the measurement date.

Level 2 :		The fair values are based on inputs other than quoted prices included within Level 1 that are observable for the asset or liability, either directly or indirectly.

Level 3 :		The fair values are based on unobservable inputs for the asset or liability.

5.1.2.1 Fair value hierarchy of financial assets and liabilities at fair value in the statements of financial position

Fair value hierarchy of financial assets at fair value in the statements of financial position as of September 30, 2022 and December 31, 2021, are as follows:


(In millions of Korean won)	September 30, 2022
	Fair value hierarchy						Total
	Level 1		Level 2		Level 3		Total
Financial assets
Financial assets at fair value through profit or loss:
Hybrid securities	W	—	W	—	W	884,569	W	884,569
Beneficiary certificates		—		302,133		—		302,133
Loans		—		43,367		—		43,367

	W	—	W	345,500	W	884,569	W	1,230,069

(In millions of Korean won)

December 31, 2021

Fair value hierarchy

Total

Level 1

Level 2

Level 3

Financial assets

Financial assets at fair value through profit or loss:

Hybrid securities

—

389,606

Loans

—

51,154

—

51,154

—

51,154

389,606

440,760

KB Financial Group Inc.

Notes to the Separate Interim Financial Statements

September 30, 2022 and 2021 (Unaudited), and December 31, 2021

5.1.2.1 Fair value hierarchy of financial assets and liabilities at fair value in the statements of financial position (cont’d)

Valuation techniques and inputs of financial assets and liabilities classified as Level 2 and measured at fair value in the statements of financial position as of September 30, 2022 and December 31, 2021, are as follows:

(In millions of Korean won)

September 30, 2022

Fair value

Valuation
techniques

Inputs

Financial assets

Financial assets at fair value through profit or loss:

Beneficiary certificates

302,133

DCF model

Interest rate,

Discount
rate, etc.

Loans

43,367

DCF model

Interest rate,

Discount
rate, etc.

345,500

(In millions of Korean won)

December 31, 2021

Fair value

Valuation
techniques

Inputs

Financial assets

Financial assets at fair value through profit or loss:

Loans

51,154

DCF model

Interest rate,

Discount
rate, etc.

5.1.2.2 Fair value hierarchy of financial assets and liabilities whose fair value is disclosed

Fair value hierarchy of financial assets and liabilities whose fair value is disclosed as of September 30, 2022 and December 31, 2021, are as follows:


(In millions of Korean won)	September 30, 2022
	Fair value hierarchy
	Level 1		Level 2		Level 3		Total
Financial assets
Cash and due from financial institutions¹	W	—	W	1,032,895	W	—	W	1,032,895
Loans measured at amortized cost²		—		—		308,918		308,918
Other financial assets³		—		—		245,144		245,144

	W	—	W	1,032,895	W	554,062	W	1,586,957

Financial liabilities
Debentures	W	—	W	4,663,198	W	—	W	4,663,198
Other financial liabilities³		—		—		32,669		32,669

	W	—	W	4,663,198	W	32,669	W	4,695,867

KB Financial Group Inc.

Notes to the Separate Interim Financial Statements

September 30, 2022 and 2021 (Unaudited), and December 31, 2021

5.1.2.2 Fair value hierarchy of financial assets and liabilities whose fair value is disclosed (cont’d)


(In millions of Korean won)	December 31, 2021
	Fair value hierarchy
	Level 1		Level 2		Level 3		Total
Financial assets
Cash and due from financial institutions¹	W	—	W	608,076	W	—	W	608,076
Loans measured at amortized cost²		—		—		249,128		249,128
Other financial assets³		—		—		36,078		36,078

	W	—	W	608,076	W	285,206	W	893,282

Financial liabilities
Debentures	W	—	W	5,509,648	W	—	W	5,509,648
Other financial liabilities³		—		—		13,913		13,913

	W	—	W	5,509,648	W	13,913	W	5,523,561

¹	Because due from financial institutions classified as level 2 are deposits on demand and with remaining maturities of less than one year, carrying amounts are reasonable approximations of fair values.

²	Because loans measured at amortized cost classified as level 3 are loans with residual maturity of less than one year, carrying amounts are reasonable approximations of fair values.

³	For other financial assets and other financial liabilities classified as level 3, carrying amounts are reasonable approximations of fair values.

Financial assets and liabilities whose carrying amount is a reasonable approximation of fair value, valuation techniques and inputs are not disclosed.

Valuation techniques and inputs of financial assets and liabilities classified as Level 2, and whose fair value is disclosed as of September 30, 2022 and December 31, 2021, are as follows:

(In millions of Korean won)

Fair value

Valuation
techniques

Inputs

September 30,
2022

December 31,
2021

Financial liabilities

Debentures

4,663,198

5,509,648

DCF model

Discount rate

5.2 Disclosure of Fair Value Hierarchy Level 3

5.2.1 Valuation policy and process of Level 3 fair value

The Company uses external, independent and qualified valuation service to determine the fair value of financial instruments at the end of every reporting period.

KB Financial Group Inc.

Notes to the Separate Interim Financial Statements

September 30, 2022 and 2021 (Unaudited), and December 31, 2021

5.2.2 Changes in fair value (Level 3) measured using valuation technique based on unobservable inputs in the market

5.2.2.1 Changes in financial instruments classified as Level 3 of the fair value hierarchy for the nine-month periods ended September 30, 2022 and 2021, are as follows:


(In millions of Korean won)	2022			2021
	Financial assetsat fair value through profit or loss			Financial assets at fair value through profit or loss
Beginning	W	389,606		W	388,895
Total gains or losses:
- Profit or loss		(35,037	)		1,703
- Other comprehensive income		—			—
Purchases		530,000			—
Sales		—			—
Issues		—			—
Settlements		—			—
Transfers into Level 3		—			—
Transfers out of Level 3		—			—

Ending	W	884,569		W	390,598

5.2.2.2 In relation to changes in financial instruments classified as Level 3 of the fair value hierarchy, total gains or losses recognized in profit or loss for the period, and total gains or losses recognized in profit or loss from financial instruments held at the end of the reporting period for the nine-month periods ended September 30, 2022 and 2021, are as follows:


(In millions of Korean won)	2022							2021
	Losses on financial instruments at fair value through profit or loss			Other operating income		Net interest income		Gains on financial instruments at fair value through profit or loss		Other operating income		Net interest income
Total gains (losses) included in profit or loss for the period	W	(35,037	)	W	—	W	—	W	1,703	W	—	W	—
Total gains (losses) for the period included in profit or loss for financial instruments held at the end of the reporting period		(35,037	)		—		—		1,703		—		—

KB Financial Group Inc.

Notes to the Separate Interim Financial Statements

September 30, 2022 and 2021 (Unaudited), and December 31, 2021

5.2.3 Sensitivity analysis of changes in unobservable inputs

5.2.3.1 Information about fair value measurements using unobservable inputs as of September 30, 2022 and December 31, 2021, are as follows:

(In millions of Korean won)

September 30, 2022

Fair value

Valuation

techniques

Inputs

Unobservable

inputs

Range of
unobservable
inputs (%)

Relationship

unobservable

inputs to fair

value

Financial assets

Financial assets at fair value through profit or loss:

Hybrid securities

884,569

Hull and White Model,
MonteCarlo Simulation

Matrix YTM, Additional spread by grade, Risk spread of company, Valid credit rating, Disclosed information of securities, Estimated volatility of Interest rate

Discount rate

4.16 ~ 6.64

The lower the discount rate, the higher the fair value

Volatility of interest rate

0.82

The higher the volatility, the higher the fair value fluctuation

(In millions of Korean won)

December 31, 2021

Fair value

Valuation

techniques

Inputs

Unobservable

inputs

Range of
unobservable
inputs (%)

Relationship

unobservable

inputs to fair

value

Financial assets

Financial assets at fair value through profit or loss:

Hybrid securities

389,606

Hull and White Model,
MonteCarlo Simulation

Matrix YTM, Additional spread by grade, Risk spread of company, Valid credit rating, Disclosed information of securities, Estimated volatility of Interest rate

Discount rate

2.30 ~ 5.05

The lower the discount rate, the higher the fair value

Volatility of interest rate

0.46

The higher the volatility, the higher the fair value fluctuation

KB Financial Group Inc.

Notes to the Separate Interim Financial Statements

September 30, 2022 and 2021 (Unaudited), and December 31, 2021

5.2.3.2 Sensitivity analysis of changes in unobservable inputs

Results of the sensitivity analysis of changes in unobservable inputs as of September 30, 2022 and December 31, 2021, are as follows:

(In millions of Korean won)

September 30, 2022

Profit or loss

Other comprehensive
income or loss

Favorable
changes

Unfavorable
changes

Favorable
changes

Unfavorable
changes

Financial assets

Financial assets at fair value through profit or loss:

Hybrid securities *

11,906

(11,543

)

—

*	The changes in fair value are calculated by increasing or decreasing discount rates (4.16% ~ 6.64%) by 1%p, which are principal unobservable input parameters.

(In millions of Korean won)

December 31, 2021

Profit or loss

Other comprehensive
income or loss

Favorable
changes

Unfavorable
changes

Favorable
changes

Unfavorable
changes

Financial assets

Financial assets at fair value through profit or loss:

Hybrid securities *

8,316

(8,072

)

—

*	The changes in fair value are calculated by increasing or decreasing discount rates (2.30% ~ 5.05%) by 1%p, which are principal unobservable input parameters.

KB Financial Group Inc.

Notes to the Separate Interim Financial Statements

September 30, 2022 and 2021 (Unaudited), and December 31, 2021

6. Due from Financial Institutions

6.1 Details of due from financial institutions as of September 30, 2022 and December 31, 2021, are as follows:

(In millions of Korean won)

Financial Institution

Interest rate
(%)
as of
September 30,
2022

September 30,
2022

December 31,
2021

Due from financial institutions in Korean won

Due from banks

Kookmin Bank

0.00 ~ 2.10

412,895

518,076

KB Savings Bank Co., Ltd.

2.50 ~ 2.90

120,000

90,000

Korea Securities Finance Corp.

2.7

500,000

—

1,032,895

608,076

6.2 Details of restricted due from financial institution as of September 30, 2022 and December 31, 2021, are as follows:

(In millions of Korean won)

Financial
Institution

September 30,
2022

December 31,
2021

Reasons of

restriction

Due from financial institutions in Korean won

Kookmin Bank

Pledged as collateral for the overdraft account

7. Financial Assets at Fair Value through Profit or Loss

Details of financial assets at fair value through profit or loss as of September 30, 2022 and December 31, 2021, are as follows:


(In millions of Korean won)	September 30, 2022		December 31, 2021
Financial assets at fair value through profit or loss:
Hybrid securities	W	884,569	W	389,606
Beneficiary certificates		302,133		—
Loans		43,367		51,154

	W	1,230,069	W	440,760

8. Loans Measured at Amortized Cost

Details of loans measured at amortized cost as of September 30, 2022 and December 31, 2021, are as follows:


(In millions of Korean won)	September 30, 2022			December 31, 2021
Loans measured at amortized cost	W	310,000		W	250,000
Less: Allowances for loan losses		(1,082	)		(872	)

	W	308,918		W	249,128

KB Financial Group Inc.

Notes to the Separate Interim Financial Statements

September 30, 2022 and 2021 (Unaudited), and December 31, 2021

9. Investments in Subsidiaries

9.1 Details of subsidiaries as of September 30, 2022, are as follows:


Name of subsidiaries	Industry	Location
Kookmin Bank	Banking and foreign exchange transaction	Korea
KB Securities Co., Ltd.	Financial investment	Korea
KB Insurance Co., Ltd.	Non-life insurance	Korea
KB Kookmin Card Co., Ltd.	Credit card and installment financial business	Korea
Prudential Life Insurance Company of Korea Ltd.	Life insurance	Korea
KB Asset Management Co., Ltd.	Investment advisory and investment trust	Korea
KB Capital Co., Ltd.	Financial leasing	Korea
KB Life Insurance Co., Ltd.	Life insurance	Korea
KB Real Estate Trust Co., Ltd.	Real estate trust management	Korea
KB Savings Bank Co., Ltd.	Savings banking	Korea
KB Investment Co., Ltd.	Capital investment	Korea
KB Data System Co., Ltd.	System software, development and supply	Korea
KB Credit Information Co., Ltd.	Collection of receivables and credit investigation	Korea

9.2 Details of investments in subsidiaries as of September 30, 2022 and December 31, 2021, are as follows:


(In millions of Korean won, except for shares)	As of September 30, 2022				Carrying amount
Name of subsidiaries	Number of issued shares		Ownership (%)		September 30, 2022		December 31, 2021
Kookmin Bank		404,379,116		100.00	W	14,821,721	W	14,821,721
KB Securities Co., Ltd.		298,620,424		100.00		3,342,391		3,342,391
KB Insurance Co., Ltd.		66,500,000		100.00		2,375,430		2,375,430
KB Kookmin Card Co., Ltd.		92,000,000		100.00		1,953,175		1,953,175
Prudential Life Insurance Company of Korea Ltd.		15,000,000		100.00		2,310,054		2,310,054
KB Asset Management Co., Ltd.		7,667,550		100.00		96,312		96,312
KB Capital Co., Ltd. ¹		32,175,147		100.00		873,811		873,811
KB Life Insurance Co., Ltd.		91,200,000		100.00		485,314		485,314
KB Real Estate Trust Co., Ltd.		16,000,000		100.00		121,553		121,553
KB Savings Bank Co., Ltd. ²		8,001,912		100.00		176,813		176,813
KB Investment Co., Ltd.		22,525,328		100.00		154,910		154,910
KB Data System Co., Ltd.		800,000		100.00		6,334		6,334
KB Credit Information Co., Ltd. ³		1,252,400		100.00		23,620		23,620

					W	26,741,438	W	26,741,438

¹	Carrying amount has increased by W200,000 million due to the capital increase of KB Capital Co., Ltd. for the year ended December 31, 2021.

²	Difference between par value (W70,000 million) and fair value (W50,731 million) of subordinated bond issued by KB Savings Bank Co., Ltd. was accounted for as investments in subsidiaries for the year ended December 31, 2021.

³	Reversal of impairment losses of KB Credit Information Co., Ltd. amounting to W2,289 million was recognized for the year ended December 31, 2021.

KB Financial Group Inc.

Notes to the Separate Interim Financial Statements

September 30, 2022 and 2021 (Unaudited), and December 31, 2021

10. Deferred Income Tax Assets and Liabilities

Details of deferred income tax assets and liabilities as of September 30, 2022 and December 31, 2021, are as follows:


(In millions of Korean won)	September 30, 2022
	Assets			Liabilities			Net amount
Share-based payments	W	3,852		W	—		W	3,852
Membership rights		218			—			218
Defined benefit obligation		3,173			—			3,173
Plan assets		—			(3,173	)		(3,173	)
Short-term employee benefits		1,710			—			1,710
Losses on valuation of financial assets at fair value through profit or loss		12,494			—			12,494
Others		3,361			(3,058	)		303

		24,808			(6,231	)		18,577

Offsetting of deferred tax assets and liabilities		(6,231	)		6,231			—

	W	18,577		W	—		W	18,577


(In millions of Korean won)	December 31, 2021
	Assets			Liabilities			Net amount
Share-based payments	W	4,486		W	—		W	4,486
Membership rights		218			—			218
Defined benefit obligation		3,189			—			3,189
Plan assets		—			(3,189	)		(3,189	)
Short-term employee benefits		808			—			808
Losses on valuation of financial assets at fair value through profit or loss		2,858			—			2,858
Others		761			(3,548	)		(2,787	)

		12,320			(6,737	)		5,583

Offsetting of deferred tax assets and liabilities		(6,737	)		6,737			—

	W	5,583		W	—		W	5,583

KB Financial Group Inc.

Notes to the Separate Interim Financial Statements

September 30, 2022 and 2021 (Unaudited), and December 31, 2021

11. Debentures

11.1 Details of debentures as of September 30, 2022 and December 31, 2021, are as follows:


(In millions of Korean won)
	Issuance date		Maturity date		Interest rate (%) as of September 30, 2022		September 30, 2022		December 31, 2021
Unguaranteed debentures No.6		Feb. 26, 2015		Feb. 26, 2022		—	W	—	W	30,000
Unguaranteed debentures No.9		Jun. 23, 2015		Jun. 23, 2022		—		—		150,000
Unguaranteed debentures No.12-3		Nov. 27, 2015		Nov. 27, 2022		2.38		50,000		50,000
Unguaranteed debentures No.14-2		Dec. 9, 2015		Dec. 9, 2022		2.38		30,000		30,000
Unguaranteed debentures No.15-3		May 12, 2016		May 12, 2026		2.01		200,000		200,000
Unguaranteed debentures No.16-3		May 27, 2016		May 27, 2023		1.91		150,000		150,000
Unguaranteed debentures No.18-3		Jul. 25, 2016		Jul. 25, 2026		1.69		80,000		80,000
Unguaranteed debentures No.19-3		Aug. 25, 2016		Aug. 25, 2026		1.69		120,000		120,000
Unguaranteed debentures No.22-2		Feb. 28, 2017		Feb. 28, 2022		—		—		110,000
Unguaranteed debentures No.25-3		May 24, 2017		May 24, 2022		—		—		270,000
Unguaranteed debentures No.25-4		May 24, 2017		May 24, 2027		2.62		80,000		80,000
Unguaranteed debentures No.26-1		Jun. 27, 2017		Jun. 27, 2022		—		—		50,000
Unguaranteed debentures No.26-2		Jun. 27, 2017		Jun. 27, 2024		2.34		200,000		200,000
Unguaranteed debentures No.27		Jul. 19, 2017		Jul. 19, 2024		2.41		100,000		100,000
Unguaranteed debentures No.28-1		Aug. 30, 2017		Aug. 30, 2022		—		—		60,000
Unguaranteed debentures No.28-2		Aug. 30, 2017		Aug. 30, 2024		2.43		30,000		30,000
Unguaranteed debentures No.28-3		Aug. 30, 2017		Aug. 30, 2027		2.60		60,000		60,000
Unguaranteed debentures No.29-1		Sep. 19, 2017		Sep. 19, 2022		—		—		150,000
Unguaranteed debentures No.29-2		Sep. 19, 2017		Sep. 19, 2024		2.44		110,000		110,000
Unguaranteed debentures No.31-2		Feb. 28, 2018		Feb. 28, 2023		2.81		50,000		50,000
Unguaranteed debentures No.31-3		Feb. 28, 2018		Feb. 28, 2028		3.02		60,000		60,000
Unguaranteed debentures No.32-2		Apr. 6, 2018		Apr. 6, 2023		2.71		80,000		80,000
Unguaranteed debentures No.32-3		Apr. 6, 2018		Apr. 6, 2028		2.86		20,000		20,000
Unguaranteed debentures No.33-1		Jun. 12, 2018		Jun. 12, 2023		2.81		100,000		100,000
Unguaranteed debentures No.33-2		Jun. 12, 2018		Jun. 12, 2028		2.92		30,000		30,000
Unguaranteed debentures No.34-2		Jul. 25, 2018		Jul. 25, 2023		2.65		70,000		70,000
Unguaranteed debentures No.34-3		Jul. 25, 2018		Jul. 25, 2025		2.71		20,000		20,000
Unguaranteed debentures No.34-4		Jul. 25, 2018		Jul. 25, 2028		2.76		20,000		20,000
Unguaranteed debentures No.35		Oct. 5, 2018		Oct. 5, 2023		2.52		120,000		120,000
Unguaranteed debentures No.36-1		Feb. 22, 2019		Feb. 22, 2022		—		—		120,000
Unguaranteed debentures No.36-2		Feb. 22, 2019		Feb. 22, 2024		2.11		230,000		230,000
Unguaranteed debentures No.36-3		Feb. 22, 2019		Feb. 22, 2029		2.22		60,000		60,000
Unguaranteed debentures No.37-1		Mar. 15, 2019		Mar. 15, 2024		2.06		140,000		140,000
Unguaranteed debentures No.37-2		Mar. 15, 2019		Mar. 15, 2029		2.16		70,000		70,000
Unguaranteed debentures No.38-1		Jun. 19, 2019		Jun. 19, 2026		1.73		80,000		80,000
Unguaranteed debentures No.38-2		Jun. 19, 2019		Jun. 19, 2029		1.77		120,000		120,000
Unguaranteed debentures No.39-1		Oct. 15, 2019		Oct. 15, 2024		1.60		80,000		80,000
Unguaranteed debentures No.39-2		Oct. 15, 2019		Oct. 15, 2029		1.67		40,000		40,000
Unguaranteed debentures No.40-1		Dec. 4, 2019		Dec. 4, 2024		1.76		70,000		70,000
Unguaranteed debentures No.40-2		Dec. 4, 2019		Dec. 4, 2029		1.87		30,000		30,000
Unguaranteed debentures No.41-1		Jan. 16, 2020		Jan. 16, 2023		1.64		110,000		110,000
Unguaranteed debentures No.41-2		Jan. 16, 2020		Jan. 16, 2025		1.74		100,000		100,000
Unguaranteed debentures No.41-3		Jan. 16, 2020		Jan. 16, 2030		1.88		40,000		40,000

KB Financial Group Inc.

Notes to the Separate Interim Financial Statements

September 30, 2022 and 2021 (Unaudited), and December 31, 2021

11.1 Details of debentures as of September 30, 2022 and December 31, 2021, are as follows: (cont’d)


(In millions of Korean won)
	Issuance date		Maturity date		Interest rate (%) as of September 30, 2022		September 30, 2022			December 31, 2021
Subordinated debentures No.1-1		Feb. 18, 2020		Feb. 18, 2030		2.21	W	370,000		W	370,000
Subordinated debentures No.1-2		Feb. 18, 2020		Feb. 18, 2035		2.26		30,000			30,000
Unguaranteed debentures No.42-1		May 13, 2020		May 13, 2025		1.59		130,000			130,000
Unguaranteed debentures No.42-2		May 13, 2020		May 13, 2030		1.78		70,000			70,000
Unguaranteed debentures No.43-1		Jun. 16, 2020		Jun. 16, 2023		1.18		50,000			50,000
Unguaranteed debentures No.43-2		Jun. 16, 2020		Jun. 16, 2025		1.44		110,000			110,000
Unguaranteed debentures No.43-3		Jun. 16, 2020		Jun. 16, 2030		1.63		50,000			50,000
Exchangeable bonds No.1 *		Jun. 30, 2020		Jun. 30, 2025		—		240,000			240,000
Unguaranteed debentures No.44-1		Aug. 11, 2020		Aug. 11, 2022		—		—			80,000
Unguaranteed debentures No.44-2		Aug. 11, 2020		Aug. 11, 2023		1.07		50,000			50,000
Unguaranteed debentures No.44-3		Aug. 11, 2020		Aug. 9, 2024		1.18		30,000			30,000
Unguaranteed debentures No.44-4		Aug. 11, 2020		Aug. 11, 2027		1.39		20,000			20,000
Unguaranteed debentures No.45		Nov. 23, 2020		Nov. 23, 2023		1.19		60,000			60,000
Unguaranteed debentures No.46-1		Jan. 14, 2021		Jan. 13, 2023		1.09		160,000			160,000
Unguaranteed debentures No.46-2		Jan. 14, 2021		Jan. 14, 2026		1.43		30,000			30,000
Unguaranteed debentures No.46-3		Jan. 14, 2021		Jan. 14, 2028		1.62		10,000			10,000
Unguaranteed debentures No.46-4		Jan. 14, 2021		Jan. 14, 2031		1.84		100,000			100,000
Unguaranteed debentures No.47		Feb. 24, 2021		Feb. 24, 2023		1.07		90,000			90,000
Unguaranteed debentures No.48-1		Jun. 16, 2022		Jun. 17, 2024		4.15		85,000			—
Unguaranteed debentures No.48-2		Jun. 16, 2022		Jun. 16, 2025		4.27		240,000			—
Unguaranteed debentures No.48-3		Jun. 16, 2022		Jun. 16, 2027		4.34		80,000			—
Unguaranteed debentures No.48-4		Jun. 16, 2022		Jun. 16, 2032		4.40		95,000			—

								5,050,000			5,570,000
				Less: Bond Discounts				(5,131	)		(5,490	)
				Less: adjustment on exchange right				(9,263	)		(11,719	)

							W	5,035,606		W	5,552,791

Fair value of the liability component of exchangeable bonds is calculated by using market interest rate of bonds under the same conditions without the exchange right. The residual amount, after deducting liability component from the issuance amount, represents the value of exchange right and is recorded in equity. Shares to be exchanged are 5 million treasury shares of KB Financial Group Inc. with the exchange price of W48,000. Exercise period for exchange right is from the 60th day of the issuance date to 10 days before the maturity date.

KB Financial Group Inc.

Notes to the Separate Interim Financial Statements

September 30, 2022 and 2021 (Unaudited), and December 31, 2021

11.2 Maturities of debentures as of September 30, 2022 and December 31, 2021, are as follows:

(In millions of Korean won)

September 30, 2022

Up to
3 months

3~6
months

6~12
months

1~3
years

Over
3 years

Total

Debentures in Korean won

80,000

410,000

500,000

2,095,000

1,965,000

5,050,000

(In millions of Korean won)

December 31, 2021

Up to
3 months

3~6
months

6~12
months

1~3
years

Over
3 years

Total

Debentures in Korean won

260,000

470,000

370,000

2,080,000

2,390,000

5,570,000

11.3 Changes in debentures based on par value for the nine-month periods ended September 30, 2022 and 2021, are as follows:

(In millions of Korean won)

2022

Beginning

Issue

Repayment

Ending

Debentures in Korean won

5,570,000

500,000

(1,020,000

)

5,050,000

(In millions of Korean won)

2021

Beginning

Issue

Repayment

Ending

Debentures in Korean won

6,150,000

390,000

(920,000

)

5,620,000

KB Financial Group Inc.

Notes to the Separate Interim Financial Statements

September 30, 2022 and 2021 (Unaudited), and December 31, 2021

12. Net Defined Benefit Liabilities

12.1 Defined Benefit Plan

The Company operates defined benefit plans which have the following characteristics:

•

The Company has the obligation to pay the agreed benefits to all its current and former employees.

•

The Company assumes actuarial risk (that benefits will cost more than expected) and investment risk.

The net defined benefit liabilities recognized in the statements of financial position are calculated in accordance with actuarial valuation method using assumptions based on market data and historical data such as discount rate, future salary increase rate, and mortality. Actuarial assumptions may differ from actual results, due to changes in the market conditions, economic trends, and mortality trends.

12.2 Details of the net defined benefit liabilities as of September 30, 2022 and December 31, 2021, are as follows:


(In millions of Korean won)	September 30, 2022			December 31, 2021
Present value of defined benefit obligation	W	21,436		W	22,557
Fair value of plan assets		(19,691	)		(22,778	)

Net defined benefit liabilities (assets)	W	1,745		W	(221	)

12.3 Details of post-employment benefits recognized in profit or loss for the nine-month periods ended September 30, 2022 and 2021, are as follows:


(In millions of Korean won)	2022			2021
Current service cost	W	1,688		W	1,599
Net interest expense on net defined benefit liabilities		(4	)		1

Post-employment benefits	W	1,684		W	1,600

13. Equity

13.1 Share Capital

13.1.1 Details of share capital as of September 30, 2022 and December 31, 2021, are as follows:


(In millions of Korean won)	September 30, 2022		December 31, 2021
Type of share		Ordinary share		Ordinary share
Number of authorized shares		1,000,000,000		1,000,000,000
Par value per share (In Korean won)	W	5,000	W	5,000
Number of issued shares		408,897,068		415,807,920
Share capital *	W	2,090,558	W	2,090,558

*	Due to the retirement of shares deducted through retained earnings, it is different from the total par value of the shares issued.

KB Financial Group Inc.

Notes to the Separate Interim Financial Statements

September 30, 2022 and 2021 (Unaudited), and December 31, 2021

13.1.2 Changes in shares for the nine-month periods ended September 30, 2022 and 2021, are as follows:


(In number of shares)	2022		2021
Beginning		389,634,335		389,634,335
Increase		—		—
Decrease		—		—

Ending		389,634,335		389,634,335

13.2 Hybrid Securities

Details of hybrid securities classified as equity as of September 30, 2022 and December 31, 2021, are as follows:


(In millions of Korean won)
Hybrid securities	Issuance date		Maturity		Interest rate (%) as of September 30, 2022		September 30, 2022		December 31, 2021
The 1-1^st		May 2, 2019		Perpetual bond		3.23	W	349,204	W	349,204
The 1-2^nd		May 2, 2019		Perpetual bond		3.44		49,881		49,881
The 2-1^st		May 8, 2020		Perpetual bond		3.30		324,099		324,099
The 2-2^nd		May 8, 2020		Perpetual bond		3.43		74,812		74,812
The 3-1^st		Jul. 14, 2020		Perpetual bond		3.17		369,099		369,099
The 3-2^nd		Jul. 14, 2020		Perpetual bond		3.38		29,922		29,922
The 4-1^st		Oct. 20, 2020		Perpetual bond		3.00		433,918		433,918
The 4-2^nd		Oct. 20, 2020		Perpetual bond		3.28		64,843		64,843
The 5-1^st		Feb. 19, 2021		Perpetual bond		2.67		419,056		419,056
The 5-2^nd		Feb. 19, 2021		Perpetual bond		2.87		59,862		59,862
The 5-3^rd		Feb. 19, 2021		Perpetual bond		3.28		119,727		119,727
The 6-1^st		May 28, 2021		Perpetual bond		3.20		165,563		165,563
The 6-2^nd		May 28, 2021		Perpetual bond		3.60		109,708		109,708
The 7-1^st		Oct. 8, 2021		Perpetual bond		3.57		208,453		208,453
The 7-2^nd		Oct. 8, 2021		Perpetual bond		3.80		59,834		59,834
The 8-1^st		Feb. 16, 2022		Perpetual bond		4.00		442,955		—
The 8-2^nd		Feb. 16, 2022		Perpetual bond		4.30		155,626		—
The 9-1^st		May 12, 2022		Perpetual bond		4.68		478,814		—
The 9-2^nd		May 12, 2022		Perpetual bond		4.97		19,906		—
The 10-1^st		Aug. 26, 2022		Perpetual bond		4.90		407,936		—
The 10-2^nd		Aug. 26, 2022		Perpetual bond		5.15		70,819		—
The 10-3^rd		Aug. 26, 2022		Perpetual bond		5.30		19,944		—

							W	4,433,981	W	2,837,981

The above hybrid securities are early redeemable by the Company after 5 or 7or 10 years from the issuance date.

KB Financial Group Inc.

Notes to the Separate Interim Financial Statements

September 30, 2022 and 2021 (Unaudited), and December 31, 2021

13.3 Capital Surplus

Details of capital surplus as of September 30, 2022 and December 31, 2021, are as follows:


(In millions of Korean won)	September 30, 2022		December 31, 2021
Paid-in capital in excess of par value	W	13,190,275	W	13,190,275
Other capital surplus		1,465,893		1,465,893
Gains on sales of treasury shares		86,646		86,646
Consideration for exchange right of exchangeable bonds		11,933		11,933

	W	14,754,747	W	14,754,747

13.4 Accumulated Other Comprehensive Income (Loss)

Details of accumulated other comprehensive income (loss) as of September 30, 2022 and December 31, 2021, are as follows:


(In millions of Korean won)	September 30, 2022			December 31, 2021
Remeasurements of net defined benefit liabilities	W	(8,685	)	W	(8,330	)

13.5 Retained Earnings

13.5.1 Details of retained earnings as of September 30, 2022 and December 31, 2021, are as follows:


(In millions of Korean won)	September 30, 2022		December 31, 2021
Legal reserves	W	839,234	W	695,348
Voluntary reserves		982,000		982,000
Regulatory reserve for credit losses		4,490		5,154
Unappropriated retained earnings		2,247,470		2,291,704

	W	4,073,194	W	3,974,206

With respect to the allocation of net profit earned in a fiscal term, the Company must set aside in its legal reserve an amount equal to at least 10% of its profit after tax as reported in the financial statements, each time it pays dividends on its net profits earned until its legal reserve reaches the aggregate amount of its paid-in capital in accordance with Article 53 of the Financial Holding Company Act. The reserve is not available for the payment of cash dividends, but may be transferred to share capital, or used to reduce accumulated deficit.

13.5.2 Regulatory reserve for credit losses

Measurement and disclosure of regulatory reserve for credit losses are required in accordance with Articles 26 through 28 of the Regulations on Supervision of Financial Holding Companies.

13.5.2.1 Details of regulatory reserve for credit losses as of September 30, 2022 and December 31, 2021, are as follows:


(In millions of Korean won)	September 30, 2022		December 31, 2021
Amounts before appropriation	W	4,490	W	5,154
Amounts estimated to be appropriated (reversed)		2,458		(664	)

	W	6,948	W	4,490

KB Financial Group Inc.

Notes to the Separate Interim Financial Statements

September 30, 2022 and 2021 (Unaudited), and December 31, 2021

13.5.2.2 Regulatory reserve for credit losses estimated to be appropriated (reversed) and adjusted profit (loss) after provision (reversal) of regulatory reserve for credit losses for the three-month and nine-month periods ended September 30, 2022 and 2021, are as follows:


(In millions of Korean won, except for per share amounts)	2022				2021
	Three months		Nine months		Three months			Nine months
Regulatory reserve for credit losses estimated to be appropriated (reversed)	W	1,260	W	2,458	W	(5,388	)	W	(1,251	)
Adjusted profit (loss) after provision (reversal) of regulatory reserve for credit losses^1,2		122,162		1,639,463		114,683			1,431,267
Adjusted basic earnings (loss) per share after provision (reversal) of regulatory reserve for credit losses¹		314		4,208		294			3,673
Adjusted diluted earnings (loss) per share after provision (reversal) of regulatory reserve for credit losses¹		308		4,114		290			3,598

¹	Adjusted profit (loss) after provision (reversal) of regulatory reserve for credit losses is not based on Korean IFRS. It is calculated by reflecting provision (reversal) of regulatory reserve for credit losses before tax to the net profit for the period.

²	After deducting dividends on hybrid securities

13.6 Treasury Shares

Changes in treasury shares for the nine-month periods ended September 30, 2022 and 2021, are as follows:

(In millions of Korean won and in number of shares)


	2022
	Beginning		Acquisition		Retirement			Ending
Number of treasury shares *		26,173,585		—		(6,910,852	)		19,262,733

Carrying amount	W	1,136,188	W	—	W	(300,000	)	W	836,188

(In millions of Korean won and in number of shares)


	2021
	Beginning		Acquisition		Retirement		Ending
Number of treasury shares *		26,173,585		—		—		26,173,585

Carrying amount	W	1,136,188	W	—	W	—	W	1,136,188

*	5 million treasury shares are deposited at the Korea Securities Depository for the exchange of exchangeable bonds.

14. Dividends

The annual dividends to the shareholders of the Company for the year ended December 31, 2021, amounting to W853,299 million (W2,190 per share) were declared at the annual general shareholders’ meeting on March 25, 2022 and paid in April 11, 2022. According to the resolution of the board of directors on April 22, 2022, the quarterly dividend per share of W500 (total dividend: W194,817 million) with dividend record date of March 31, 2022 were paid on May 9, 2022, and the resolution of the board of directors on July 21, 2022, the quarterly dividend per share of W500 (total dividend: W194,817 million) with dividend record date of June 30, 2022 were paid on August 8, 2022. Meanwhile, the annual dividends and quarterly dividends paid in 2021 were W689,653 million (W1,770 per share) and W292,226 million (W750 per share), respectively.

KB Financial Group Inc.

Notes to the Separate Interim Financial Statements

September 30, 2022 and 2021 (Unaudited), and December 31, 2021

15. Net Interest Expense

Details of interest income, interest expense, and net interest expense for the three-month and nine-month periods ended September 30, 2022 and 2021, are as follows:


(In millions of Korean won)	2022						2021
	Three months			Nine months			Three months			Nine months
Interest income
Due from financial institutions	W	2,319		W	5,479		W	442		W	966
Loans measured at amortized cost		1,828			4,637			1,017			2,976
Loans measured at fair value through profit or loss		672			1,992			1,520			2,179
Others		102			298			85			250

		4,921			12,406			3,064			6,371

Interest expense
Borrowings		—			—			—			141
Debentures		29,354			83,938			29,100			91,423
Others		5			13			3			9

		29,359			83,951			29,103			91,573

Net interest expense	W	(24,438	)	W	(71,545	)	W	(26,039	)	W	(85,202	)

16. Net Fee and Commission Expense

Details of fee and commission income, fee and commission expense, and net fee and commission expense for the three-month and nine-month periods ended September 30, 2022 and 2021, are as follows:


(In millions of Korean won)	2022						2021
	Three months			Nine months			Three months			Nine months
Fee and commission income
Fees earned in Korean won	W	417		W	1,576		W	232		W	694

Fee and commission expense
Fees paid in Korean won		1,172			6,326			1,062			6,180
Fees paid in foreign currency		208			348			114			229

		1,380			6,674			1,176			6,409

Net fee and commission expense	W	(963	)	W	(5,098	)	W	(944	)	W	(5,715	)

KB Financial Group Inc.

Notes to the Separate Interim Financial Statements

September 30, 2022 and 2021 (Unaudited), and December 31, 2021

17. Net Gains or Losses on Financial Instruments at Fair value through Profit or Loss

Net gains or losses on financial instruments at fair value through profit or loss include dividend income, gains or losses arising from changes in fair value, and gains or losses arising from sales and redemptions. Details of net gains or losses on financial assets at fair value through profit or loss for the three-month and nine-month periods ended September 30, 2022 and 2021, are as follows:


(In millions of Korean won)	2022						2021
	Three months			Nine months			Three months		Nine months
Gains on financial instruments at fair value through profit or loss
Dividend income from financial assets at fair value through profit or loss	W	9,108		W	24,002		W	5,155	W	14,582
Gains on valuation of financial assets at fair value through profit or loss		2,221			4,587			755		3,269
Gains on disposal of financial assets at fair value through profit or loss		754			754			—		—

		12,083			29,343			5,910		17,851

Losses on financial instruments at fair value through profit or loss
Losses on valuation of financial assets at fair value through profit or loss		12,313			46,433			1,370		1,958

		12,313			46,433			1,370		1,958

Net gains (losses) on financial instruments at fair value through profit or loss	W	(230	)	W	(17,090	)	W	4,540	W	15,893

18. Net Other Operating Income and Expenses

Details of other operating income and expenses for the three-month and nine-month periods ended September 30, 2022 and 2021, are as follows:


(In millions of Korean won)	2022				2021
	Three months		Nine months		Three months		Nine months
Other operating income
Dividend income from subsidiaries	W	200,000	W	1,871,223	W	170,000	W	1,617,949
Others		—		1		—		—

		200,000		1,871,224		170,000		1,617,949

Net other operating income	W	200,000	W	1,871,224	W	170,000	W	1,617,949

KB Financial Group Inc.

Notes to the Separate Interim Financial Statements

September 30, 2022 and 2021 (Unaudited), and December 31, 2021

19. General and Administrative Expenses

19.1 Details of general and administrative expenses for the three-month and nine-month periods ended September 30, 2022 and 2021, are as follows:


(In millions of Korean won)	2022					2021
	Three months		Nine months			Three months		Nine months
Expenses related to employee
Employee benefits—salaries	W	10,056	W	29,897		W	9,547	W	27,902
Employee benefits—others		1,225		3,379			1,171		3,387
Post-employment benefits—defined benefit plans		535		1,684			534		1,600
Post-employment benefits—defined contribution plans		—		(2	)		—		—
Share-based payments		593		2,282			1,663		7,193

		12,409		37,240			12,915		40,082

Depreciation and amortization		1,648		4,486			1,623		4,719

Other general and administrative expenses
Travel		316		512			—		10
Communications		218		772			623		1,283
Tax and dues		49		363			46		338
Publication		70		245			63		246
Rental expense		473		1,336			413		1,211
Vehicle		54		120			35		93
Service fees		3,362		10,433			3,189		10,605
Advertising		154		607			96		573
Training		368		701			235		504
Others		2,307		6,259			1,825		5,460

		7,371		21,348			6,525		20,323

	W	21,428	W	63,074		W	21,063	W	65,124

KB Financial Group Inc.

Notes to the Separate Interim Financial Statements

September 30, 2022 and 2021 (Unaudited), and December 31, 2021

19.2 Share-based Payments

Share-based payments plan for executives and employees of the Company and its subsidiaries as of September 30, 2022, are as follows:

19.2.1 Stock grants linked to long-term performance


(In number of shares)	Grant date	Number of granted shares¹		Vesting conditions²
KB Financial Group Inc.
Series 27	Jun. 16, 2020		184	Services fulfillment, market performance³30%, and non-market performance⁴70%
Series 28	Nov. 21, 2020		68,135	Services fulfillment, market performance³ 35%, and non-market performance⁵ 65%
Series 29	Jan. 1, 2021		79,840	Services fulfillment, market performance³ 0~30%, and non-market performance⁴ 70~100%
Series 30	Apr. 1, 2021		3,069	Services fulfillment, market performance³ 30%, and non-market performance⁴ 70%
Series 33	Jan. 1, 2022		70,050	Services fulfillment, market performance³ 0~30%, and non-market performance⁴ 70~100%
Series 34	Feb. 1, 2022		654	Services fulfillment, market performance³ 30%, and non-market performance⁴ 70%
Series 35	May 27, 2022		6,126	Services fulfillment, market performance³ 30%, and non-market performance⁴ 70%
Deferred grant in 2015			4,243	Satisfied
Deferred grant in 2016			3,533	Satisfied
Deferred grant in 2017			1,127	Satisfied
Deferred grant in 2018			1,766	Satisfied
Deferred grant in 2019			7,598	Satisfied
Deferred grant in 2020			37,334	Satisfied
Deferred grant in 2021			27,204	Satisfied

			310,863

Kookmin Bank
Series 80	Mar. 1, 2020		7,982	Services fulfillment, market performance³ 30~50%, and non-market performance⁴ 50~70%
Series 81	Jan. 1, 2021		140,093	Services fulfillment, market performance³ 0~30%, and non-market performance⁴ 70~100%
Series 82	Mar. 1, 2021		18,202	Services fulfillment, market performance³ 0~30%, and non-market performance⁴ 70~100%
Series 83	Apr. 1, 2021		15,278	Services fulfillment, market performance³ 0~30%, and non-market performance⁴ 70~100%
Series 85	Jan. 1, 2022		341,056	Services fulfillment, market performance³ 30~50%, and non-market performance⁴ 50~70%
				Services fulfillment, market performance³ 30%, and EPS & Asset Quality⁶ 70%
Series 86	Feb. 1, 2022		3,813	Services fulfillment, market performance³ 0~30%, and non-market performance⁴ 70~100%
Series 87	Mar. 1, 2022		6,199	Services fulfillment, market performance³ 0~30%, and non-market performance⁴ 70~100%
Series 88	Mar. 14, 2022		5,891	Services fulfillment, market performance³ 0~30%, and non-market performance⁴ 70~100%
Series 89	May 26, 2022		7,849	Services fulfillment, market performance³ 0~30%, and non-market performance⁴ 70~100%
Series 90	Jun. 1, 2022		7,079	Services fulfillment, market performance³ 0~30%, and non-market performance⁴ 70~100%

KB Financial Group Inc.

Notes to the Separate Interim Financial Statements

September 30, 2022 and 2021 (Unaudited), and December 31, 2021

19.2.1 Stock grants linked to long-term performance (cont’d)


(In number of shares)	Grant date	Number of granted shares¹		Vesting conditions²
Series 91	Jul. 18, 2022		10,334	Services fulfillment, market performance³ 0~30%, and non-market performance⁴ 70~100%
Series 92	Aug. 24, 2022		7,281	Services fulfillment, market performance³ 0~30%, and non-market performance⁴ 70~100%
Deferred grant in 2016			2,426	Satisfied
Deferred grant in 2017			4,582	Satisfied
Deferred grant in 2018			2,287	Satisfied
Deferred grant in 2019			32,756	Satisfied
Deferred grant in 2020			53,502	Satisfied
Deferred grant in 2021			156,939	Satisfied

			823,549

Other subsidiaries
Stock granted in 2010			106
Stock granted in 2011			146
Stock granted in 2012			420
Stock granted in 2013			544
Stock granted in 2014			1,028
Stock granted in 2015			2,374
Stock granted in 2016			3,749
Stock granted in 2017			14,006	Services fulfillment, market performance³ 0~50%,
Stock granted in 2018			26,572	and non-market performance⁴ 50~100%
Stock granted in 2019			42,273
Stock granted in 2020			165,810
Stock granted in 2021			505,328
Stock granted in 2022			261,463

			1,023,819

			2,158,231

¹	Granted shares represent the total number of shares initially granted to executives and employees who have residual shares as of September 30, 2022 (Deferred grants are residual shares vested as of September 30, 2022).

³	Relative TSR (Total Shareholders Return): [(Fair value at the end of the contract—Fair value at the beginning of the contract) + (Total amount of dividend per share paid during the contract period)] / Fair value at the beginning of the contract

⁴	Performance results of company and employee

⁵	EPS (Earnings Per Share), Asset Quality, HCROI (Human Capital Return on Investment), Profit from non-banking segments

⁶	EPS, Asset Quality

The stock grant linked to long-term performance is an incentive plan that sets, on grant date, the maximum number of shares that can be awarded. Actual shares to be granted is determined in accordance with achievement of pre-set performance targets over the vesting period.

KB Financial Group Inc.

Notes to the Separate Interim Financial Statements

September 30, 2022 and 2021 (Unaudited), and December 31, 2021

19.2.2 Stock grants linked to short-term performance


(In number of shares)	Estimated number of vested shares*		Vesting conditions
KB Financial Group Inc.
Stock granted in 2015		3,725	Satisfied
Stock granted in 2016		4,223	Satisfied
Stock granted in 2017		1,401	Satisfied
Stock granted in 2018		760	Satisfied
Stock granted in 2019		9,354	Satisfied
Stock granted in 2020		24,408	Satisfied
Stock granted in 2021		35,497	Satisfied
Stock granted in 2022		41,090	Proportional to service period
Kookmin Bank
Stock granted in 2015		1,292	Satisfied
Stock granted in 2016		4,875	Satisfied
Stock granted in 2017		1,998	Satisfied
Stock granted in 2018		2,109	Satisfied
Stock granted in 2019		43,780	Satisfied
Stock granted in 2020		92,576	Satisfied
Stock granted in 2021		101,308	Satisfied
Stock granted in 2022		151,697	Proportional to service period
Other subsidiaries
Stock granted in 2015		5,762	Satisfied
Stock granted in 2016		25,831	Satisfied
Stock granted in 2017		46,223	Satisfied
Stock granted in 2018		99,594	Satisfied
Stock granted in 2019		243,130	Satisfied
Stock granted in 2020		433,210	Satisfied
Stock granted in 2021		610,167	Satisfied
Stock granted in 2022		293,959	Proportional to service period

		2,277,969

Share-based payments arrangement for subsidiaries was transferred to the Company in 2010, and the related compensation cost paid to the executives and employees of subsidiaries is reimbursed by subsidiaries. The accrued expenses for share-based payments as of September 30, 2022 and December 31, 2021, are W155,555 million and W193,023 million, respectively, and the receivables to be reimbursed by subsidiaries for the compensation costs as of September 30, 2022 and December 31, 2021, are W141,546 million and W176,709 million, respectively. And compensation costs from share-based payments amounting to W2,282 million and W7,193 million were recognized for the nine-month periods ended September 30, 2022 and 2021, respectively.

KB Financial Group Inc.

Notes to the Separate Interim Financial Statements

September 30, 2022 and 2021 (Unaudited), and December 31, 2021

20. Income Tax Benefit

Details of income tax benefit for the nine-month periods ended September 30, 2022 and 2021, are as follows:


(In millions of Korean won)	2022			2021
Income tax payable	W	—		W	—
Changes in deferred tax assets and liabilities		12,994			2,384
Origination and reversal of temporary differences		12,994			2,384
Income tax recognized directly in equity		(134	)		(32	)
Remeasurements of net defined benefit liabilities		(134	)		(32	)

Income tax benefit	W	12,860		W	2,352

21. Earnings per Share

21.1 Basic Earnings per Share

Basic earnings per share is calculated from the earnings attributable to ordinary shares.

21.1.1 Weighted average number of ordinary shares outstanding


(In number of shares)	2022						2021
	Three months			Nine months			Three months			Nine months
Number of issued ordinary shares (A)		408,897,068			408,897,068			415,807,920			415,807,920
Number of treasury shares (B) *		(19,262,733	)		(19,262,733	)		(26,173,585	)		(26,173,585	)

Weighted average number of ordinary shares outstanding (C=A+B)		389,634,335			389,634,335			389,634,335			389,634,335

*	The number of treasury shares have excluded the initial redemption of treasury shares from February 14, 2022, and the 2nd redemption from August 1, 2022.

21.1.2 Basic earnings per share


(In Korean won and in number of shares)	2022
	Three months			Nine months
Profit (loss) for the period	W	157,936,518,702		W	1,727,619,367,508
Deduction: Dividends on hybrid securities		(34,514,700,000	)		(85,698,100,000	)

Profit (loss) attributable to the ordinary equity holders (A)		123,421,818,702			1,641,921,267,508
Weighted average number of ordinary shares outstanding (B)		389,634,335			389,634,335

Basic earnings (loss) per share (A/B)	W	317		W	4,214


(In Korean won and in number of shares)	2021
	Three months			Nine months
Profit (loss) for the period	W	129,393,700,894		W	1,481,456,285,286
Deduction: Dividends on hybrid securities		(20,097,875,000	)		(51,439,625,000	)

Profit (loss) attributable to the ordinary equity holders (A)		109,295,825,894			1,430,016,660,286
Weighted average number of ordinary shares outstanding (B)		389,634,335			389,634,335

Basic earnings (loss) per share (A/B)	W	281		W	3,670

KB Financial Group Inc.

Notes to the Separate Interim Financial Statements

September 30, 2022 and 2021 (Unaudited), and December 31, 2021

21.2 Diluted Earnings per Share

Diluted earnings per share is calculated through increasing the weighted average number of ordinary shares outstanding by the weighted average number of additional ordinary shares that would have been outstanding assuming the conversion of all dilutive potential ordinary shares. The Company has dilutive potential ordinary shares such as stock grants and ordinary share exchange right of exchangeable bonds.

21.2.1 Adjusted profit for diluted earnings per share


(In Korean won)	2022
	Three months		Nine months
Profit (loss) attributable to the ordinary equity holders *	W	123,421,818,702	W	1,641,921,267,508
Adjustment:
Interest expense on exchangeable bonds		600,130,825		1,780,822,991

Adjusted profit (loss) for diluted earnings (loss) per share	W	124,021,949,527	W	1,643,702,090,499


(In Korean won)	2021
	Three months		Nine months
Profit (loss) attributable to the ordinary equity holders *	W	109,295,825,894	W	1,430,016,660,286
Adjustment:
Interest expense on exchangeable bonds		591,619,704		1,755,567,167

Adjusted profit (loss) for diluted earnings (loss) per share	W	109,887,445,598	W	1,431,772,227,453

*	The amount is after deducting dividends on hybrid securities.

21.2.2 Weighted average number of ordinary shares outstanding for diluted earnings per share


(In number of shares)	2022				2021
	Three months		Nine months		Three months		Nine months
Weighted average number of ordinary shares outstanding		389,634,335		389,634,335		389,634,335		389,634,335
Adjustment:
Stock grants		4,008,204		4,328,225		3,495,172		3,697,690
Exchangeable bonds		5,000,000		5,000,000		5,000,000		5,000,000

Adjusted weighted average number of ordinary shares outstanding for diluted earnings (loss) per share		398,642,539		398,962,560		398,129,507		398,332,025

KB Financial Group Inc.

Notes to the Separate Interim Financial Statements

September 30, 2022 and 2021 (Unaudited), and December 31, 2021

21.2.3 Diluted earnings per share


(In Korean won and in number of shares)	2022
	Three months		Nine months
Adjusted profit (loss) for diluted earnings (loss) per share	W	124,021,949,527	W	1,643,702,090,499
Adjusted weighted average number of ordinary shares outstanding for diluted earnings (loss) per share		398,642,539		398,962,560

Diluted earnings (loss) per share	W	311	W	4,120


(In Korean won and in number of shares)	2021
	Three months		Nine months
Adjusted profit (loss) for diluted earnings (loss) per share	W	109,887,445,598	W	1,431,772,227,453
Adjusted weighted average number of ordinary shares outstanding for diluted earnings (loss) per share		398,129,507		398,332,025

Diluted earnings (loss) per share	W	276	W	3,594

22. Statement of Cash Flows

22.1 Details of cash and cash equivalents as of September 30, 2022 and December 31, 2021, are as follows:


(In millions of Korean won)	September 30, 2022			December 31, 2021
Due from financial institutions	W	1,032,895		W	608,076
Deduction:
Restricted due from financial institutions		(3	)		(3	)
Due from financial institutions with original maturities over three months		(120,000	)		(90,000	)

		(120,003	)		(90,003	)

	W	912,892		W	518,073

22.2 Significant non-cash transactions for the nine-month periods ended September 30, 2022 and 2021, are as follows:


(In millions of Korean won)	2022			2021
Changes in receivables and payables from consolidated tax return	W	310,329		W	(242,363	)
Changes in receivables and payables related to stock grants		(35,163	)		36,565
Changes in receivables related to quarterly dividends of subsidiaries		200,000			—

22.3 Cash inflows and outflows from income tax, interest, and dividends for the nine-month periods ended September 30, 2022 and 2021, are as follows:

(In millions of Korean won)

Activity

2022

2021

Income tax paid

Operating

2,285

1,131

Interest received

Operating

9,591

6,593

Interest paid

Operating

81,014

89,126

Dividends received

Operating

1,694,465

1,632,573

Dividends paid

Financing

1,328,631

1,033,318

KB Financial Group Inc.

Notes to the Separate Interim Financial Statements

September 30, 2022 and 2021 (Unaudited), and December 31, 2021

23. Contingent Liabilities and Commitments

23.1 Commitments made with financial institutions as of September 30, 2022 and December 31, 2021, are as follows:

(In millions of Korean won)

September 30, 2022

December 31, 2021

Amount of
commitments

Amount
borrowed

Amount of
commitments

Amount
borrowed

General loan

Hana Bank

200,000

—

200,000

—

23.2 Other Matters (including litigation)

a) The Company has 1 pending lawsuit as a defendant with aggregate claims amount of \ 0.1 million, which arose in the normal course of the management activities, as of September 30, 2022.

b) The proliferation of COVID-19 has had a negative impact on the global economy, which may have an impact on the expected credit losses and potential impairment of assets in a particular portfolio, and it could negatively affect the revenue generation capability of the Company as follows:

•

There is a possibility of uncertainty about the credit risk of a borrower that could be affected by COVID-19.

•

Uncertainty may arise about forward-looking macroeconomic information related to expected credit losses.

•

A significant decrease in the fair value of the Company’s investment in an entity that could be affected by COVID-19 pandemic can occur.

KB Financial Group Inc.

Notes to the Separate Interim Financial Statements

September 30, 2022 and 2021 (Unaudited), and December 31, 2021

24. Related Party Transactions

According to Korean IFRS No.1024, the Company includes subsidiaries and key management personnel (including family members) in the scope of related parties. The Company discloses balances (receivables and payables) and other amounts arising from transactions with related parties in the notes to the financial statements. Refer to Note 9 for details of subsidiaries. Key management personnel include the executives of the Company, their close family members, and the companies where the executives and/or their close family members have control or joint control.

24.1 Details of significant profit or loss arising from transactions with related parties for the nine-month periods ended September 30, 2022 and 2021, are as follows:


(In millions of Korean won)
Subsidiaries	Profit or loss	2022			2021
Kookmin Bank	Interest income	W	4,062		W	786
	Fee and commission income		1,061			694
	Net other operating income *		1,031,167			917,941
	General and administrative expenses		8,312			8,036
	Net non-operating income		—			1,448
KB Securities Co., Ltd.	Interest expense		15			—
	Fee and commission income		166			—
	Net losses on financial assets at fair value through profit or loss		(14,920	)		—
	Net other operating income *		400,000			200,000
	General and administrative expenses		307			423
KB Insurance Co., Ltd.	Fee and commission income		229			—
	General and administrative expenses		1,307			1,166
KB Kookmin Card Co., Ltd.	Fee and commission income		53			—
	Net other operating income *		250,056			200,008
	General and administrative expenses		15			142
	Net non-operating income		4			3
Prudential Life Insurance Company of Korea Ltd.	Fee and commission income		40			—
	Net other operating income *		100,000			200,000
	General and administrative expenses		454			582
KB Asset Management Co., Ltd.	Net other operating income *		40,000			55,000
KB Capital Co., Ltd	Fee and commission income		22			—
	Net gains on financial assets at fair value through profit or loss		3,885			16,285
KB Life Insurance Co., Ltd.	Fee and commission income		32			—
	General and administrative expenses		203			302
KB Real Estate Trust. Co., Ltd.	Net other operating income *		40,000			35,000
KB Savings Bank Co., Ltd.	Interest income		2,777			836
	Fee and commission income		2			—
	Net losses on financial assets at fair value through profit or loss		(8,941	)		(393	)
KB Investment Co., Ltd.	Interest income		4,637			2,976
	Net other operating income *		10,000			10,000
	Provision for credit losses		211			3
KB Data Systems Co., Ltd.	General and administrative expenses		1,910			1,469

*	Net other operating income includes dividend income from subsidiaries.

KB Financial Group Inc.

Notes to the Separate Interim Financial Statements

September 30, 2022 and 2021 (Unaudited), and December 31, 2021

24.2 Details of significant outstanding balances of receivables and payables arising from transactions with related parties as of September 30, 2022 and December 31, 2021, are as follows:


(In millions of Korean won)
Subsidiaries	Assets or liabilities	September 30, 2022		December 31, 2021
Kookmin Bank	Cash and due from financial institutions	W	412,895	W	518,076
	Other assets		652,735		462,250
	Other liabilities		6,950		71
	Property and equipment		491		518
KB Securities Co., Ltd.	Financial assets at fair value through profit or loss		410,780		—
	Other assets		54,571		106,320
	Other liabilities		22,736		85
KB Insurance Co., Ltd.	Other assets		115,759		37,209
	Other liabilities		772		6
KB Kookmin Card Co., Ltd.	Other assets		70,904		88,060
	Other liabilities		681		700
Prudential Life Insurance Company of Korea Ltd.	Other assets		108,809		2,626
	Other liabilities		456		7,264
KB Asset Management Co., Ltd.	Other assets		13,353		20,502
KB Capital Co., Ltd.	Financial assets at fair value through profit or loss		473,789		389,606
	Other assets		47,476		40,701
KB Life Insurance Co., Ltd.	Other assets		3,807		5,196
	Other liabilities		4,893		10,877
KB Real Estate Trust Co., Ltd.	Other assets		7,629		19,360
KB Savings Bank Co., Ltd.	Cash and due from financial institutions		120,000		90,000
	Financial assets at fair value through profit or loss		43,367		51,154
	Other assets		4,532		7,984
	Other liabilities		67		67
KB Investment Co., Ltd.	Loans measured at amortized cost (gross amount)		310,000		250,000
	Allowances for credit losses		1,082		872
	Other assets		4,760		9,157
	Other liabilities		1,178		—
KB Data Systems Co., Ltd.	Property and equipment		—		68
	Intangible assets		1,716		3,341
	Other assets		1,692		2,554
	Other liabilities		177		160
KB Credit Information Co., Ltd.	Other assets		923		1,239

KB Financial Group Inc.

Notes to the Separate Interim Financial Statements

September 30, 2022 and 2021 (Unaudited), and December 31, 2021

24.3 Right-of-use assets and lease liabilities with related parties as of September 30, 2022 and December 31, 2021, are as follows:

(In millions of Korean won)

September 30,

2022

December 31,

2021

Subsidiary

Kookmin Bank

Right-of-use assets

W 491

W 518

24.4 Unused commitments provided from related parties as of September 30, 2022 and December 31, 2021, are as follows:

(In millions of Korean won)

September 30,

2022

December 31,

2021

Subsidiary

KB Kookmin Card Co., Ltd.

Unused lines of credit for credit card

W 2,333

W 2,300

24.5 Share transactions with related parties for the nine-month periods ended September 30, 2022 and 2021, are as follows:


(In millions of Korean won)			2022	2021
Subsidiary	KB Capital Co., Ltd.	Acquisition of hybrid securities	W 100,000	W —
	KB Securities Co., Ltd.	Acquisition of hybrid securities	430,000	—

24.6 Details of significant lending transactions with related parties for the nine-month periods ended September 30, 2022 and 2021, are as follows:

(In millions of Korean won)

2022

Beginning

Loan

Collection

Ending

Subsidiary

KB Investment Co., Ltd.

250,000

60,000

—

310,000

KB Savings Bank Co., Ltd. *

70,000

—

70,000

(In millions of Korean won)

2021

Beginning

Loan

Collection

Ending

Subsidiary

KB Investment Co., Ltd.

180,000

—

180,000

KB Savings Bank Co., Ltd. *

—

70,000

—

70,000

*	Par value of subordinated bond issued by KB Savings Bank Co., Ltd. The difference between par value and fair value at the acquisition date was accounted for as investments in subsidiaries.

KB Financial Group Inc.

Notes to the Separate Interim Financial Statements

September 30, 2022 and 2021 (Unaudited), and December 31, 2021

24.7 Details of compensation to key management personnel for the nine-month periods ended September 30, 2022 and 2021, are as follows:


(In millions of Korean won)	2022
	Short-term employee benefits		Post-employment benefits		Share-based payments		Total
Registered directors (executive)	W	875	W	24	W	261	W	1,160
Registered directors (non-executive)		479		—		—		479
Non-registered directors		5,263		106		2,021		7,390

	W	6,617	W	130	W	2,282	W	9,029


(In millions of Korean won)	2021
	Short-term employee benefits		Post-employment benefits		Share-based payments		Total
Registered directors (executive)	W	658	W	22	W	1,542	W	2,222
Registered directors (non-executive)		456		—		—		456
Non-registered directors		4,316		46		5,652		10,014

	W	5,430	W	68	W	7,194	W	12,692

25. Events after the Reporting Period

According to the resolution of the board of directors on October 25, 2022, the quarterly dividend per share of W500 (total dividend: W194,817 million) with dividend record date of September 30, 2022 were paid on November 10, 2022. The Company’s financial statements as of September 30, 2022, do not reflect this dividend payable.