Exhibit 99.1

 

KB Financial Group Inc. and Subsidiaries   Consolidated Interim Financial Statements   March 31, 2025 and 2024 (Unaudited)

 

KB Financial Group Inc. and Subsidiaries

 

		Page(s)
Report on Review of Condensed Consolidated Interim Financial Statements			1-2
Consolidated Interim Financial Statements
Consolidated Interim Statements of Financial Position			3
Consolidated Interim Statements of Comprehensive Income			4-5
Consolidated Interim Statements of Changes in Equity			6
Consolidated Interim Statements of Cash Flows			7-8
Notes to the Consolidated Interim Financial Statements			9

Report on Review of Condensed Consolidated Interim Financial Statements

(English Translation of a Report Originally Issued in Korean)

To the Shareholders and the Board of Directors of

KB Financial Group Inc.

Reviewed Financial Statements

We have reviewed the accompanying condensed consolidated interim financial statements of KB Financial Group Inc. and its subsidiaries (collectively referred to as the “Group”). These condensed consolidated interim financial statements consist of the consolidated interim statement of financial position of the Group as at March 31, 2025, and the related consolidated interim statements of comprehensive income, changes in equity and cash flows for the three-month periods ended March 31, 2025 and 2024, and material accounting policy information and other selected explanatory notes, expressed in Korean Won.

Management’s Responsibility for the Financial Statements

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

Auditor’s Responsibility

Our responsibility is to express a conclusion on these condensed consolidated interim financial statements based on our review.

We conducted our review in accordance with quarterly or semi-annual review standards established by the Securities and Futures Commission of the Republic of Korea. A review of interim financial information consists of making inquiries, primarily of persons responsible for financial and accounting matters, and applying analytical and other review procedures. A review is substantially less in scope than an audit conducted in accordance with Korean Standards on Auditing and consequently does not enable us to obtain assurance that we would become aware of all significant matters that might be identified in an audit. Accordingly, we do not express an audit opinion.

Conclusion

Based on our review, nothing has come to our attention that causes us to believe the accompanying condensed consolidated interim financial statements are not prepared, in all material respects, in accordance with Korean IFRS No. 1034 Interim Financial Reporting.

 

1

Other Matters

We have audited the consolidated statement of financial position of the Group as at December 31, 2024, and the related consolidated statements of comprehensive income, changes in equity and cash flows for the year then ended, not presented herein, in accordance with Korean Standards on Auditing. We expressed an unqualified opinion on those financial statements in our audit report dated March 5, 2025. The consolidated statement of financial position as at December 31, 2024, presented herein for comparative purposes, is consistent, in all material respects, with the above audited statement of financial position as at December 31, 2024.

Review standards and their application in practice vary among countries. The procedures and practices used in the Republic of Korea to review such financial statements may differ from those generally accepted and applied in other countries.

 

/s/ Samil PricewaterhouseCoopers

Seoul, Korea

May 15, 2025

 

 

2

KB Financial Group Inc. and Subsidiaries

Consolidated Interim Statements of Financial Position

March 31, 2025 and December 31, 2024

(in millions of Korean won)

 

		Notes				March 31, 2025 (Unaudited)				December 31, 2024
Assets
Cash and due from financial institutions			4,6,7,30			W	30,657,613			W	29,869,111
Financial assets at fair value through profit or loss			4,6,11				84,218,327				79,450,093
Derivative financial assets			4,6,8				10,057,025				11,730,767
Loans measured at amortized cost			4,6,9,10				474,870,495				472,071,840
Financial investments			4,6,11				130,499,362				131,009,464
Investments in associates and joint ventures							865,714				947,390
Insurance contract assets			29				301,214				276,191
Reinsurance contract assets			29				1,603,616				1,497,147
Property and equipment							5,424,795				5,390,015
Investment property							3,880,886				3,759,176
Intangible assets							1,925,304				1,966,684
Net defined benefit assets			18				254,187				258,500
Current income tax assets							328,985				339,855
Deferred income tax assets			12,25				231,794				278,824
Assets held for sale							130,051				136,838
Other assets			4,6				25,077,769				18,863,637
Total assets						W	770,327,137			W	757,845,532
Liabilities
Financial liabilities at fair value through profit or loss			4,6,13			W	10,904,572			W	10,720,231
Derivative financial liabilities			4,6,8				10,152,203				11,783,494
Deposits			4,6,14				434,357,614				435,687,897
Borrowings			4,6,15				69,150,886				68,077,012
Debentures			4,6,16				75,289,027				76,171,257
Insurance contract liabilities			29				59,243,225				55,863,701
Reinsurance contract liabilities			29				64,620				56,266
Provisions			17				859,446				927,632
Net defined benefit liabilities			18				104,504				100,187
Current income tax liabilities							608,452				530,720
Deferred income tax liabilities			12,25				1,622,258				1,682,292
Other liabilities			4,6				47,835,566				36,429,662
Total liabilities							710,192,373				698,030,351
Equity
Share capital							2,090,558				2,090,558
Hybrid securities							5,486,582				5,082,578
Capital surplus							16,603,176				16,646,734
Accumulated other comprehensive income (loss)			27				(401,586	)			496,922
Retained earnings							36,156,396				34,808,220
Treasury shares							(1,700,174	)			(1,236,060	)
Equity attributable to shareholders of the Parent Company			19				58,234,952				57,888,952
Non-controlling interests							1,899,812				1,926,229
Total equity							60,134,764				59,815,181
Total liabilities and equity						W	770,327,137			W	757,845,532

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

 

3

KB Financial Group Inc. and Subsidiaries

Consolidated Interim Statements of Comprehensive Income

Three-month Periods Ended March 31, 2025 and 2024

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

 

		Notes		2025 (Unaudited)				2024 (Unaudited)
Interest income				W	7,454,941			W	7,613,573
Interest income from financial instruments at fair value through other comprehensive income and amortized cost					7,082,796				7,228,877
Interest income from financial instruments at fair value through profit or loss					362,055				376,753
Insurance finance interest income					10,090				7,943
Interest expense					(4,192,776	)			(4,443,688	)
Interest expense					(3,810,634	)			(4,066,526	)
Insurance finance interest expense					(382,142	)			(377,162	)
Net interest income		5,20			3,262,165				3,169,885
Fee and commission income					1,330,233				1,396,300
Fee and commission expense					(396,185	)			(406,207	)
Net fee and commission income		5,21			934,048				990,093
Insurance income					3,107,811				2,732,740
Insurance income					2,835,068				2,694,656
Reinsurance income					272,743				38,084
Insurance expense					(2,670,058	)			(2,189,769	)
Insurance service expense					(2,464,199	)			(1,975,583	)
Reinsurance expense					(205,859	)			(214,186	)
Net insurance income		5,29			437,753				542,971
Net gains on financial instruments at fair value through profit or loss		5,22			546,218				249,133
Other insurance finance expenses		29			(139,570	)			(145,307	)
Net other operating expenses		5,23			(486,424	)			(404,710	)
General and administrative expenses		5,24			(1,605,565	)			(1,628,236	)
Operating income before provision for credit losses		5			2,948,625				2,773,829
Provision for credit losses		5,7,9,10,17			(655,597	)			(428,270	)
Net operating income		5			2,293,028				2,345,559
Share of profit (loss) of associates and joint ventures		5			5,448				(1,419	)
Net other non-operating income (expenses)		5			8,130				(946,545	)
Net non-operating income (expenses)					13,578				(947,964	)
Profit before income tax expense		5			2,306,606				1,397,595
Income tax expense		5,25			(607,484	)			(341,532	)
Profit for the period		5			1,699,122				1,056,063

(Continued)

 

4

KB Financial Group Inc. and Subsidiaries

Consolidated Interim Statements of Comprehensive Income

Three-month Periods Ended March 31, 2025 and 2024

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

 

		Notes		2025 (Unaudited)				2024 (Unaudited)
Items that will not be reclassified to profit or loss:
Remeasurements of net defined benefit liabilities				W	(7,427	)		W	8,995
Gains (losses) on equity securities at fair value through other comprehensive income					44,423				(12,566	)
Fair value changes of financial liabilities designated at fair value through profit or loss due to own credit risk					(5,845	)			(8,843	)
					31,151				(12,414	)
Items that may be reclassified subsequently to profit or loss:
Currency translation differences					(14,466	)			162,945
Gains (losses) on debt securities at fair value through other comprehensive income					911,031				(657,227	)
Share of other comprehensive income (loss) of associates and joint ventures					124				(142	)
Gains (losses) on cash flow hedging instruments		8			31,501				(36,797	)
Gains (losses) on hedging instruments of net investments in foreign operations		8			3,524				(51,203	)
Insurance finance expense		29			(1,870,605	)			(142,733	)
					(938,891	)			(725,157	)
Other comprehensive loss for the period, net of tax					(907,740	)			(737,571	)
Total comprehensive income for the period				W	791,382			W	318,492
Profit attributable to:		5
Shareholders of the Parent Company				W	1,697,271			W	1,041,982
Non-controlling interests					1,851				14,081
				W	1,699,122			W	1,056,063
Total comprehensive income (loss) for the period attributable to:
Shareholders of the Parent Company				W	797,586			W	296,359
Non-controlling interests					(6,204	)			22,133
				W	791,382			W	318,492
Earnings per share (in Korean won)		28
Basic earnings per share				W	4,429			W	2,608
Diluted earnings per share					4,384				2,565

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

 

5

KB Financial Group Inc. and Subsidiaries

Consolidated Interim Statements of Changes in Equity

Three-month Periods Ended March 31, 2025 and 2024

(in millions of Korean won)

 

						Equity attributable to shareholders of the Parent Company
																		Accumulated
																		other
						Share				Hybrid				Capital				comprehensive				Retained				Treasury				Non-controlling				Total
		Notes				capital				securities				surplus				income				earnings				shares				interests				equity
Balance as of January 1, 2024						W	2,090,558			W	5,032,803			W	16,647,916			W	2,152,644			W	31,934,599			W	(1,165,837	)		W	1,943,506			W	58,636,189
Comprehensive income for the period
Profit for the period							—				—				—				—				1,041,982				—				14,081				1,056,063
Remeasurements of net defined benefit liabilities							—				—				—				8,751				—				—				244				8,995
Currency translation differences							—				—				—				155,039				—				—				7,906				162,945
Losses on financial instruments at fair value through other comprehensive income and transfer to retained earnings							—				—				—				(665,583	)			(4,111	)			—				(99	)			(669,793	)
Share of other comprehensive loss of associates and joint ventures							—				—				—				(142	)			—				—				—				(142	)
Losses on cash flow hedging instruments							—				—				—				(36,797	)			—				—				—				(36,797	)
Losses on hedging instruments of net investments in foreign operations							—				—				—				(51,203	)			—				—				—				(51,203	)
Insurance finance expense							—				—				—				(142,733	)			—				—				—				(142,733	)
Fair value changes of financial liabilities designated at fair value through profit or loss due to own credit risk							—				—				—				(8,843	)			—				—				—				(8,843	)
Total comprehensive income (loss) for the period							—				—				—				(741,511	)			1,037,871				—				22,132				318,492
Transactions with shareholders
Annual dividends paid to shareholders of the Parent Company							—				—				—				—				(587,006	)			—				—				(587,006	)
Issuance of hybrid securities							—				399,060				—				—				—				—				129,973				529,033
Dividends on hybrid securities							—				—				—				—				(48,070	)			—				(22,477	)			(70,547	)
Acquisition of treasury shares							—				—				—				—				—				(65,537	)			—				(65,537	)
Disposal of treasury shares							—				—				—				—				—				234,600				—				234,600
Gains on disposal of treasury shares							—				—				3,975				—				—				—				—				3,975
Others							—				—				(12,018	)			—				—				—				(1,891	)			(13,909	)
Total transactions with shareholders							—				399,060				(8,043	)			—				(635,076	)			169,063				105,605				30,609
Balance as of March 31, 2024 (Unaudited)						W	2,090,558			W	5,431,863			W	16,639,873			W	1,411,133			W	32,337,394			W	(996,774	)		W	2,071,243			W	58,985,290
Balance as of January 1, 2025						W	2,090,558			W	5,082,578			W	16,646,734			W	496,922			W	34,808,220			W	(1,236,060	)		W	1,926,229			W	59,815,181
Comprehensive income for the period
Profit for the period							—				—				—				—				1,697,271				—				1,851				1,699,122
Remeasurements of net defined benefit liabilities							—				—				—				(7,006	)			—				—				(421	)			(7,427	)
Currency translation differences							—				—				—				(6,789	)			—				—				(7,677	)			(14,466	)
Gains (losses) on financial instruments at fair value through other comprehensive income and transfer to retained earnings							—				—				—				956,566				(1,177	)			—				65				955,454
Share of other comprehensive income of associates and joint ventures							—				—				—				124				—				—				—				124
Gains (losses) on cash flow hedging instruments							—				—				—				31,523				—				—				(22	)			31,501
Gains on hedging instruments of net investments in foreign operations							—				—				—				3,524				—				—				—				3,524
Insurance finance expense							—				—				—				(1,870,605	)			—				—				—				(1,870,605	)
Fair value changes of financial liabilities designated at fair value through profit or loss due to own credit risk							—				—				—				(5,845	)			—				—				—				(5,845	)
Total comprehensive income (loss) for the period							—				—				—				(898,508	)			1,696,094				—				(6,204	)			791,382
Transactions with shareholders
Annual dividends paid to shareholders of the Parent Company							—				—				—				—				(298,285	)			—				—				(298,285	)
Issuance of hybrid securities							—				404,004				—				—				—				—				—				404,004
Dividends on hybrid securities							—				—				—				—				(49,633	)			—				(25,600	)			(75,233	)
Acquisition of treasury shares							—				—				(43,458	)			—				—				(464,114	)			—				(507,572	)
Ownership changes in subsidiaries							—				—				—				—				—				—				(32	)			(32	)
Others							—				—				(100	)			—				—				—				5,419				5,319
Total transactions with shareholders							—				404,004				(43,558	)			—				(347,918	)			(464,114	)			(20,213	)			(471,799	)
Balance as of March 31, 2025 (Unaudited)						W	2,090,558			W	5,486,582			W	16,603,176			W	(401,586	)		W	36,156,396			W	(1,700,174	)		W	1,899,812			W	60,134,764

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

 

6

KB Financial Group Inc. and Subsidiaries

Consolidated Interim Statements of Cash Flows

Three-month Periods Ended March 31, 2025 and 2024

(in millions of Korean won)

 

		Notes				2025 (Unaudited)				2024 (Unaudited)
Cash flows from operating activities
Profit for the period						W	1,699,122			W	1,056,063
Adjustment for non-cash items
Net gains on financial assets at fair value through profit or loss							(250,552	)			(126,306	)
Net losses on derivative financial instruments for hedging purposes							3,926				65,926
Provision for credit losses							655,597				428,270
Net gains on financial investments							(97,963	)			(13,521	)
Share of gains (losses) of associates and joint ventures							(5,448	)			1,419
Depreciation and amortization expense							223,912				216,882
Other net gains (losses) on property and equipment/intangible assets							(1,795	)			73,294
Share-based payments							(5,909	)			59,901
Post-employment benefits							43,915				46,391
Net interest income (expense)							6,025				(19,621	)
Losses on foreign currency translation							647,217				462,154
Insurance finance income							(2,739,544	)			(2,829,842	)
Reinsurance finance expense							204,972				439,126
Other expenses							179,810				226,100
							(1,135,837	)			(969,827	)
Changes in operating assets and liabilities
Financial asset at fair value through profit or loss							(1,201,251	)			208,850
Derivative financial instruments							103,284				(14,054	)
Loans measured at fair value through other comprehensive income							(102,446	)			(98,728	)
Loans measured at amortized cost							(3,889,232	)			(3,016,264	)
Current income tax assets							10,870				(30,583	)
Deferred income tax assets							48,778				(56,432	)
Other assets							(5,328,068	)			(8,319,658	)
Financial liabilities at fair value through profit or loss							(25,976	)			290,139
Deposits							(1,589,209	)			10,349,069
Current income tax liabilities							77,732				1,060
Deferred income tax liabilities							267,582				113,927
Other liabilities							10,989,139				7,118,682
Insurance contract assets							(25,023	)			(38,778	)
Reinsurance contract assets							(311,821	)			(336,303	)
Insurance contract liabilities							3,560,047				3,001,241
Reinsurance contract liabilities							26,190				8,194
Investment contract liabilities							(174,354	)			(144,464	)
							2,436,242				9,035,898
Net cash inflow from operating activities							2,999,527				9,122,134

(Continued)

 

7

KB Financial Group Inc. and Subsidiaries

Consolidated Interim Statements of Cash Flows

Three-month Periods Ended March 31, 2025 and 2024

(in millions of Korean won)

 

		Notes				2025 (Unaudited)				2024 (Unaudited)
Cash flows from investing activities
Net cash flows from derivative financial instruments for hedging purposes							(11,028	)			(870	)
Disposal of financial asset at fair value through profit or loss							3,228,078				4,267,546
Acquisition of financial asset at fair value through profit or loss							(5,683,774	)			(4,503,400	)
Disposal of financial investments							17,057,525				11,127,360
Acquisition of financial investments							(15,121,442	)			(14,070,438	)
Disposal of investments in associates and joint ventures							129,741				45,989
Acquisition of investments in associates and joint ventures							(42,604	)			(25,069	)
Disposal of property and equipment							29,818				960
Acquisition of property and equipment							(123,860	)			(33,589	)
Acquisition of investment property							(183,296	)			—
Disposal of intangible assets							430				3,070
Acquisition of intangible assets							(44,803	)			(82,508	)
Net cash flows from changes in ownership of subsidiaries							(36,439	)			(40,273	)
Others							(39,620	)			(89,912	)
Net cash outflow from investing activities							(841,274	)			(3,401,134	)
Cash flows from financing activities
Net cash flows from derivative financial instruments for hedging purposes							(96,975	)			(51,604	)
Net decrease in borrowings							1,001,436				(7,702,793	)
Increase in debentures							13,717,324				9,124,882
Decrease in debentures							(14,756,635	)			(7,423,739	)
Increase in other payables to trust accounts							338,470				786,222
Issuance of hybrid securities							404,004				399,060
Dividends paid on hybrid securities							(49,633	)			(48,070	)
Acquisition of treasury shares							(464,114	)			(65,537	)
Redemption of principal of lease liabilities							(90,202	)			(73,284	)
Increase (decrease) in non-controlling interests							(75,891	)			107,496
Others							(227,191	)			(65,601	)
Net cash outflow from financing activities							(299,407	)			(5,012,968	)
Effect of exchange rate changes on cash and cash equivalents							96,471				165,735
Net increase in cash and cash equivalents							1,955,317				873,767
Cash and cash equivalents at the beginning of the period			30				24,608,867				25,826,588
Cash and cash equivalents at the end of the period			30			W	26,564,184			W	26,700,355

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

 

8

KB Financial Group Inc. and Subsidiaries

Notes to the Consolidated Interim Financial Statements

March 31, 2025 and 2024 (Unaudited), and December 31, 2024

 

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 and the name was changed to KB Life Insurance Co., Ltd. in December 2022. Then in January 2023, it merged with another existing KB Life Insurance Co., Ltd. The Parent Company sold 100% shares of KB Credit Information Co., Ltd. to KB Kookmin Card Co., Ltd. on June 30, 2023.

The Parent Company’s share capital as of March 31, 2025, 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.

 

9

KB Financial Group Inc. and Subsidiaries

Notes to the Consolidated Interim Financial Statements

March 31, 2025 and 2024 (Unaudited), and December 31, 2024

 

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 condensed consolidated interim financial statements for the three-month period ended March 31, 2025, 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 March 31, 2025.

2.1.1 The Group has applied the following new and amended standards for the first time for its annual reporting period commencing January 1, 2025.

 

•

Amendment of Korean IFRS No.1021 “The Effects of Changes in Foreign Exchange Rates” and Korean IFRS No.1101 “First-time Adoption of International Financial Reporting Standards” - Lack of exchangeability

The amendments require the Group to determine a spot exchange rate when exchangeability is lacking, and to disclose information on the nature and financial effects of the currency not being exchangeable into the other currency, the spot exchange rate(s) used, the estimation process, and the risks to which the Group is exposed. These amendments do not have a significant impact on the financial statements.

 

10

KB Financial Group Inc. and Subsidiaries

Notes to the Consolidated Interim Financial Statements

March 31, 2025 and 2024 (Unaudited), and December 31, 2024

 

2.1.2 The following are the accounting standards that have been established or announced but have not yet been implemented, which the Group has not applied

 

•

Amendment of Korean IFRS No.1109 “Financial Instruments” and No.1107 “Financial Instruments”

The amendments respond to recent questions arising in practice. This amendment will be applied to the financial statements for the accounting year beginning on or after January 1, 2026. These amendments do not have a significant impact on the financial statements.

 

•

clarify the date of recognition and derecognition of some financial assets and liabilities, with a new exception for some financial liabilities settled through an electronic cash transfer system;

 

•

clarify and add further guidance for assessing whether a financial asset meets the solely payments of principal and interest (SPPI) criterion;

 

•

add new disclosures for certain instruments with contractual terms that can change cash flows

 

•

update the disclosures for equity instruments designated at fair value through other comprehensive income (FVOCI).

 

•

Korean IFRS Accounting Standards Annual Improvements Volume 11

Korean IFRS Accounting Standards Annual Improvements Volume 11 will be effective for annual reporting periods beginning on or after January 1, 2026. These amendments do not have a significant impact on the financial statements.

 

•

Korean IFRS No.1101 “First-time adoption of International Financial Reporting Standards”: Hedge accounting by a first-time adopter

 

•

Korean IFRS No.1107 “Financial Instruments: Disclosures”: Gain or loss on derecognition, Application guidance

 

•

Korean IFRS No.1109 “Financial Instruments”: Derecognition of lease liabilities, Definition of transaction price

 

•

Korean IFRS No.1110 “Consolidated Financial Statements”: Determination of a ‘de facto agent’

 

•

Korean IFRS Bo.1007 “Statement of Cash Flows”: Cost method

 

11

KB Financial Group Inc. and Subsidiaries

Notes to the Consolidated Interim Financial Statements

March 31, 2025 and 2024 (Unaudited), and December 31, 2024

 

2.1.3 Restatement of financial statements for the three-month period ended March 31, 2024 for the application of Insurance Contract accounting policy changes

In applying K-IFRS No. 1117, the Group has developed and applied its own accounting policies for areas where accounting treatment is not clearly defined. In order to provide more reliable and relevant information, the Group has changed some of these policies during the year ended December 31, 2024, and has retrospectively applied them to each prior reporting period presented in accordance with Korean IFRS No. 1008, “Accounting Policies, Changes in Accounting Estimates, and Errors”.

There is no effect on the statement of cash flows due to the change in accounting policy. The effects of applying the changes in accounting policies on the comprehensive income statement for the three-month period ended March 31, 2024, and the financial position as of December 31, 2023, are as follows:

2.1.3.1 The consolidated statement of comprehensive income for the three-month period ended March 31, 2024

 

(In millions of Korean won)		Before the effects of change in accounting policy				After the effects of change in accounting policy				Net increase (decrease)
Interest income		W	3,151,485			W	3,169,885			W	18,400
Insurance finance interest income			8,332				7,943				(389	)
Insurance finance interest expense			(395,951	)			(377,162	)			18,789
Net insurance income			538,379				542,971				4,592
Insurance income			2,727,558				2,732,740				5,182
Insurance income			2,689,474				2,694,656				5,182
Insurance expense			(2,189,179	)			(2,189,769	)			(590	)
Insurance service expense			(1,973,227	)			(1,975,583	)			(2,356	)
Reinsurance expense			(215,952	)			(214,186	)			1,766
Other insurance finance expenses			(112,426	)			(145,307	)			(32,881	)
Net operating income			2,355,448				2,345,559				(9,889	)
Net non-operating expenses			(947,964	)			(947,964	)			—
Profit before income tax expense			1,407,484				1,397,595				(9,889	)
Income tax expense			(344,270	)			(341,532	)			2,738
Profit for the period			1,063,214				1,056,063				(7,151	)
Other comprehensive income (loss), net of tax			(759,802	)			(737,571	)			22,231
Net Financial Income (Expense) of Insurance Contract Assets (Liabilities)			(164,964	)			(142,733	)			22,231
Total comprehensive income			303,412				318,492				15,080

 

12

KB Financial Group Inc. and Subsidiaries

Notes to the Consolidated Interim Financial Statements

March 31, 2025 and 2024 (Unaudited), and December 31, 2024

 

2.1.3.2 The consolidated statements of financial position as of December 31, 2023

 

(In millions of Korean won)		Before the effects of change in accounting policy				After the effects of change in accounting policy				Net increase (decrease)
Reinsurance contract assets		W	1,655,168			W	1,642,432			W	(12,736	)
Total assets			715,738,152				715,725,416				(12,736	)
Insurance contract liabilities			50,308,552				50,617,990				309,438
Deferred income tax liabilities			2,179,966				2,094,912				(85,054	)
Total liabilities			656,864,842				657,089,226				224,384
Accumulated other comprehensive income (loss)			2,295,165				2,152,644				(142,521	)
Retained earnings			32,029,199				31,934,600				(94,599	)
Total equity			58,873,310				58,636,190				(237,120	)
Total liabilities and equity			715,738,152				715,725,416				(12,736	)

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). Management’s estimates of outcomes may differ from actual outcomes if management’s estimates and assumptions based on management’s best judgment at the reporting date 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.

Uncertainties in estimates and assumptions with significant risks used 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, 2024.

3. Material Accounting Policies

The material 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, 2024, except for the impact of changes due to adopting new and amended standards and interpretations described in Note 2.1 and below paragraph.

 

13

KB Financial Group Inc. and Subsidiaries

Notes to the Consolidated Interim Financial Statements

March 31, 2025 and 2024 (Unaudited), and December 31, 2024

 

3. Material Accounting Policies (cont’d)

The Group is subject to Pillar 2 income taxes, and has applied a temporary exemption provision regarding the recognition and disclosure of deferred taxes related to the Pillar 2 rules.

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

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, reputation risk, and foreign exchange settlement risk are recognized as the Group’s significant risks and measured and managed according to regulatory capital and internal capital standards.

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 strategies 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 strategies 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 strategies, procedures, and business processes, and is responsible for calculating the Group’s risk-weighted assets, monitoring and managing internal capital limits.

 

14

KB Financial Group Inc. and Subsidiaries

Notes to the Consolidated Interim Financial Statements

March 31, 2025 and 2024 (Unaudited), and December 31, 2024

 

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 reporting purposes, the Group considers 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.

 

15

KB Financial Group Inc. and Subsidiaries

Notes to the Consolidated Interim Financial Statements

March 31, 2025 and 2024 (Unaudited), and December 31, 2024

 

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 March 31, 2025 and December 31, 2024, are as follows:

 

(In millions of Korean won)		March 31, 2025				December 31, 2024
Financial assets
Due from financial institutions measured at amortized cost *		W	28,338,789			W	27,790,121
Financial assets at fair value through profit or loss:
Due from financial institutions measured at fair value through profit or loss			66,712				59,838
Securities measured at fair value through profit or loss			78,571,691				73,768,636
Loans measured at fair value through profit or loss			1,157,109				1,187,763
Financial instruments indexed to the price of gold			217,864				158,519
Derivatives			10,057,025				11,730,767
Loans measured at amortized cost *			474,870,495				472,071,840
Financial investments:
Securities measured at fair value through other comprehensive income			90,368,390				88,735,996
Securities measured at amortized cost *			34,745,190				37,113,552
Loans measured at fair value through other comprehensive income			1,549,135				1,446,628
Other financial assets *			20,537,119				14,404,227
			740,479,519				728,467,887
Off-balance sheet items
Acceptances and guarantees contracts			16,402,953				16,250,243
Financial guarantee contracts			6,683,292				6,674,740
Commitments			215,030,630				212,695,995
			238,116,875				235,620,978
		W	978,596,394			W	964,088,865

 

*	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.

 

16

KB Financial Group Inc. and Subsidiaries

Notes to the Consolidated Interim Financial Statements

March 31, 2025 and 2024 (Unaudited), and December 31, 2024

 

4.2.4.1 Credit risk exposure

Credit qualities of loans as of March 31, 2025 and December 31, 2024, are as follows:

(In millions of Korean won)

 

		March 31, 2025
		12-month expected credit losses				Lifetime expected credit losses								Not applying expected credit losses				Total
						Non-impaired				Impaired
Loans measured at amortized cost *
Corporate
Grade 1		W	146,993,496			W	7,146,672			W	3,345			W	—			W	154,143,513
Grade 2			73,827,066				11,537,540				16,390				—				85,380,996
Grade 3			3,877,910				4,484,328				25,995				—				8,388,233
Grade 4			799,140				1,439,920				28,988				—				2,268,048
Grade 5			134,124				647,722				3,279,571				—				4,061,417
			225,631,736				25,256,182				3,354,289				—				254,242,207
Retail
Grade 1			177,437,918				5,023,387				7,718				—				182,469,023
Grade 2			7,680,385				4,213,145				39,653				—				11,933,183
Grade 3			4,388,784				1,637,739				27,241				—				6,053,764
Grade 4			318,864				422,698				32,384				—				773,946
Grade 5			106,359				851,550				1,236,734				—				2,194,643
			189,932,310				12,148,519				1,343,730				—				203,424,559
Credit card
Grade 1			11,207,732				189,815				—				—				11,397,547
Grade 2			5,417,752				589,456				—				—				6,007,208
Grade 3			2,520,120				1,685,137				—				—				4,205,257
Grade 4			10,164				475,169				—				—				485,333
Grade 5			1,196				348,596				525,239				—				875,031
			19,156,964				3,288,173				525,239				—				22,970,376
			434,721,010				40,692,874				5,223,258				—				480,637,142
Loans measured at fair value through other comprehensive income
Corporate
Grade 1			1,461,052				—				—				—				1,461,052
Grade 2			88,083				—				—				—				88,083
Grade 3			—				—				—				—				—
Grade 4			—				—				—				—				—
Grade 5			—				—				—				—				—
			1,549,135				—				—				—				1,549,135
			1,549,135				—				—				—				1,549,135
		W	436,270,145			W	40,692,874			W	5,223,258			W	—			W	482,186,277

 

17