KB Financial : 2020 1st Half Earnings Release

1H20 Business Results

July, 2020

Contents

1H20 Financial Highlights

1H20 Financial Analysis III. 1H20 Asset Quality
IV. 1H20 Financial Highlights of Major Subsidiaries

V. Appendix

Disclaimer Statement

The consolidated financial information of KB Financial Group Inc. (the "Group") presented herein is based on the Korean International Financial Reporting Standards(K-IFRS). It is currently being reviewed by the Group's independent auditor, and accordingly, is subject to change.
The consolidated financial reports presented herein is based on Korean IFRS9(K-IFRS9). Note that the financial results for years before 2017 contained herein have not been restated retrospectively.
From 2018, for better peer comparison purpose, the Group reclassified certain interest income out of Net Gain/Loss on Financial Assets at FVPL under Other Operating Profit to Interest Income under Net Interest Income. Note that beginning from the financial results for 2017 contained herein have been restated retrospectively.
As KB Insurance and KB Capital became wholly-owned subsidiaries of the Group on July 7, 2017, the financial results of KB Insurance and KB Capital have been fully consolidated in the Group's financial statements since 3Q17.
Total may not sum due to rounding.

Major non-recurringitems

I. 1H20 Financial Highlights _ Overview

Group Profitability Overview

bn won, %	1H20	1H19		YoY		2Q20	1Q20		QoQ

Net Interest Income	4,683.2		4,549.2	2.9	2,334.0		2,349.2	-0.6
Net Fee & Commission Income	1,381.3		1,135.7	21.6	711.2		670.1	6.1
Other Operating Profit	-49.6		79.1		N.A.	227.7		-277.3		N.A.

Gross Operating Income	6,014.9		5,764.0	4.4	3,272.9		2,742.0	19.4

G&A Expenses	3,045.6		3,000.8	1.5	1,586.4		1,459.2	8.7
Provision for Credit Losses	539.7		293.8	83.7	296.0		243.7	21.5

Net Operating Profit	2,429.6		2,469.4	-1.6	1,390.5		1,039.1	33.8

Highlights

Net Profit for 2Q20

981.8 bn

(+34.6% QoQ)

Increased 34.6% QoQ mainly driven by substantial recovery of other operating profit and better net fee & commission and insurance income

Net Profit for 1H20

1,711.3 bn

(-6.8%YoY)

Delivered decent net profit on the back of solid loan growth and enforced non-banking business, despite the economic headwind caused by COVID-19

Net Non-Operating Profit	-34.0		55.3		N.A.	-14.3		-19.7		N.A.

Profit for the Period	1,731.4		1,837.4	-5.8	992.5		738.9	34.3

	Profit attributable	1,711.3		1,836.8	-6.8	981.8		729.5	34.6
	to controlling interests

Group Net Profit 1) (bn won)

Net Interest Income for 1H20

4,683.2 bn

(+2.9% YoY)

Continued modest growth on the back of bank and card loan growth, overcoming NIM pressure from rate cuts and Loan Conversion Program

Net Fee & Commission for 1H20

1,381.3 bn

(+W245.6 bn YoY)

Increased significantly YoY with better results in non-banking business, such as fee income from securities business

5-Year CAGR 19%
3,311		3,312
3,061	1,837+3.7%1,880

		1,813	1,711
2,144

1,698
1,401

Other Operating Profit for 2Q20

227.7 bn

(+W505.0 bn QoQ)

Substantially recovered from temporary losses in 1Q20 as financial market stabilized in 2Q20

Credit Cost for 2Q20

0.29%

(0.14% on recurring basis)

Provided preemptive provisioning based on FLC against uncertainties and potential deterioration of asset quality

2014

2015

2016

2017

2018

2019

1H19

1H20

Non-recurringitems for 2Q20 (before tax)

Note 1) Based on profit attributable to controlling interests

· Preemptive provisioning based on FLC: W206bn (Bank: 159, Card: 32, Capital: 9 etc.)

· (Kookmin Bank) Large-scale reversals of provisioning: W76bn

Major non-recurring items (after tax)
1H19: Large-scale reversals of provisioning(W59bn), ERP costs(W35bn)
1H20: PEF related losses including TRS valuation losses(W29bn),
CVA losses(W24bn), Provisioning for receivables from brokerage business(W14bn) and non-recurring items in 2Q20 as stated at the bottom of the right side

· (Kookmin Bank) CVA(Credit Valuation Adjustment) gains: W18bn

· (KB Securities) Provisioning for potential reimbursement related to investors' losses in PEF: W29bn

I. 1H20 Financial Highlights _ Key Financial Indicators (1)

Group ROA·ROE (%)				Loans in Won Growth (tn won, %)

			11.48							3.0	4.2
				10.22							2.4

9.90					10.04				0.5
	7.64	10.15					287			280	287
				269 +6.8%	261	269
						133
					8.88				118	121	128

	5.53
			0.76							5.5	4.2
0.74			0.72						2.5
			0.64				0.8
		0.56					148	152	154
								143
	0.41

										3.4	3.2	1.0

									0.3

3Q19	4Q19	1Q20	2Q20	1H19	1H20	2019	2020.6	'19.9	'19.12	'20.3	'20.6
	ROA	ROE	ROE(Excl. Non-recurring items)	Household		Corporate
	Total Growth(QoQ)		Household Growth(QoQ)

						Corporate Growth(QoQ)

NIM (%)

1.94	1.88			1.97
1.84	1.74		1.79


1.67	1.61			1.70
1.56	1.50		1.53

3Q19	4Q19	1Q20	2Q20	1H19	1H20
		Group NIM	Bank NIM

Sustained profitability	Secured stable interest income stream	Focus on margin management
	and continue to diversify
& Earnings Power	led by solid loan growth
	revenue sources

1H20 ROE recorded 8.88%, and marked 10.04% on a recurring basis
Sustained earnings power on the back of improvement of non-banking business and recovery of other operating profit due to financial market stabilization
KB continues to make efforts to diversify revenue sources and improve cost efficiency

Loans in Won of the Bank increased 6.8% YTD and 2.4% QoQ, amounting to W287tn as of the end of 2Q20
Household continued modest growth by 4.2% YTD, driven by quality loans such as Jeonse loans and specially-arranged unsecured loans
Corporate achieved balanced growth of 10.0% by sector. Especially SME(Incl. SOHO) marked W8tn of growth with government-led forbearance program

Despite better funding conditions, 2Q20 Bank NIM contracted to 1.50%(-6bp QoQ) mainly due to declining market rates followed by key rate cuts
2Q20 Group NIM fell to 1.74%(-10bp QoQ) further reflecting lowered card asset yields caused by decreasing card loans and cash advances
Whilst focusing on margin management, KB continue to diversify groupwide non-interest income sources

I. 1H20 Financial Highlights _ Key Financial Indicators (2)

Group Cost-Income Ratio(CIR) (%)

Credit Cost Ratio(CCR) (%)

Group BIS Ratio (Basel III, %)

70.2

55.2	54.5	54.9
57.4
		50.6
51.8	50.5	50.9
	48.5

				0.29
0.22	0.20	0.21	0.20	0.27

	0.25

				0.12
				0.12
0.11	0.05	0.04	0.04	0.11

15.27 15.23

14.60 14.48

14.60

14.37

13.97 13.86 14.60

14.25

13.97	13.58

14.08 14.13

13.29 13.21

13.02 12.80

2016	2017	2018	2019	1H20
		CIR	CIR(Excl. non-recurring items)


2016	2017	2018	2019		1Q20	2Q20
		Group CCR		Bank CCR			Cumulative

2016	2017	2018	2019	'20.3	'20.6(e)
	BIS	Tier1		CET1

Visible improvement

in cost efficiency

1H20 CIR and 2Q20 CIR improved to 50.6% and
48.5% respectively
On a recurring basis, 1H20 CIR recorded 48.5%, demonstrating improved cost efficiency
Improving cost efficiency on the back of expansion of non-interest income sources and group wide cost reduction efforts

Preemptive provisioning

against economic headwind

1H20 CCR and 2Q20 CCR recorded 0.27% and
0.29% respectively
2Q20 CCR rose slightly QoQ due to W206bn of preemptive provisioning against possible prolonged economic recession
1H20 CCR and 2Q20 CCR, on a recurring basis, posted a very benign level of 0.18% and 0.14% respectively

Industry-highest capital buffer

Group BIS and CET1 ratios are to mark 14.13%, 12.80% respectively as of the end of 2Q20
Maintained the industry-highest level of capital adequacy on the back of strategic capital management efforts such as issuance of hybrid bonds and disposition of securities(FVOCI)
Bank BIS and CET1 ratios are expected to record 14.39%, 12.79%, respectively as of the end of 2Q20

II. 1H20 Financial Analysis _ Net Interest Income

Group Net Interest Income

	bn won, %		1H20		1H19	YoY	2Q20		1Q20	QoQ

Interest Income		7,221.7		7,340.4		-1.6		3,601.7		3,620.0	-0.5
	Loans		6,078.6		6,167.7		-1.4		3,075.6		3,003.0	2.4
	Financial Investments		990.8		1,026.3		-3.5		479.2		511.6	-6.3
	Others		152.3		146.4		4.0		46.9		105.4	-55.5
Interest Expense		2,538.5		2,791.2		-9.1		1,267.7		1,270.8	-0.2
	Deposits		1,575.1		1,787.1		-11.9			786.2		788.9	-0.3
	Debts & Debentures		914.1		939.2		-2.7			460.2		453.9	1.4
	Others		49.3		64.9		-24.0		21.3		28.0	-23.9
Net Interest Income		4,683.2		4,549.2	2.9		2,334.0		2,349.2	-0.6

Net Interest Income (bn won)

			8,905	9,197
		8,247		457
			478
			534	1,230
	6,403		1,168
6,203		616
	520	1,084	616
	487	465	530	+2.9%	4,683
	981	542	4,549
	980	73	599				232
	24			229	604	624
						307
						309
						244
	4,712	4,829	5,565	6,101	6,364	267


						3,140	3,276
2015	2016	2017	2018	2019	1H19		1H20

Bank	Securities	Insurance	Card	Others(Incl. adjustment for consolidation)

Note) Based on each subsidiary's Net Interest Income on the financial statements for group reporting

		Loan Growth (tn won, %)		287
					280

				269
257	258	260	261

9.6
						6.8
				4.5
		0.9	1.4		4.2
			3.0	2.4
2.1
0.3	0.7	0.5

'18.12	'19.3	'19.6	'19.9	'19.12	'20.3	'20.6
	Bank Loans in Won	Growth(QoQ)		Growth(YTD)

NIM (%)

1.98 1.97

		1.94	1.94
			1.84
1.71			1.88
1.70			1.79
		1.67
				1.74
			1.67	1.56


			1.61		1.53
					1.50
1Q19	2Q19	3Q19	4Q19	1Q20	2Q20
		Group NIM	Bank NIM	Cumulative

II. 1H20 Financial Analysis _ Net Non-Interest Income

Group Net Non-Interest Income		Net Fee & Commission Income Contribution

	bn won, %	1H20		1H19		YoY	2Q20		1Q20			QoQ

Net Fee & Commission Income	1,381.3	1,135.7	21.6			711.2	670.1	6.1
	Credit Card Fees		246.4	187.6	31.3			133.9	112.5	19.0
	Trusts	235.9	282.0	-16.3			99.4	136.5	-27.2
	Agent Activity Fees	96.9	81.3	19.2			46.9	50.0	-6.2
	(Incl. Bancassurance)

	Represent Securities	81.8	73.1	11.9			41.4	40.4	2.5
	(Incl. ITC Products)

	Banking Activity Fees	96.1	107.5	-10.6			46.2	49.9	-7.4
	Securities Business	337.9	211.9	59.5			193.1	144.8	33.4
	Others	286.3	192.3	48.9			150.3	136.0	10.5

Other Operating Income		-49.6		79.1		N.A.			227.7		-277.3		N.A.
Net Non-Interest Income		1,331.7	1,214.8	9.6			938.9	392.8	139.0

38.9%

50.6%

1H19

49.4%

1H20

61.1%

Bank Non-Bank

Note) Based on simple arithmetic sum of each subsidiary's Net Fee & Commission Income on the financial statements for group reporting

Net Fee & Commission Income (bn won)

			2,243	2,355
		2,050
			229	380

1,535	1,585		240	265	262		1,381
	133
				+21.6%
	172	212
	552	626	580	1,136	259
	109	92

	98	193				169	180
						105
	1,156	1,088	1,125	1,123	1,133	284	399
						578	543
2015	2016	2017	2018	2019		1H19	1H20

Bank Securities Card

Others(Incl. adjustment for consolidation)

Note) Based on each subsidiary's Net Fee & Commission Income on the financial statements for group reporting

Composition of Net Fee & Commission Income(1H20, bn won)

	44
124	73	178

	245

	Bank		Non-Bank
92	110	130

			166

	100	134
Bancassurance	Mutual Fund Sales, etc.	Brokerage	Credit Card	Trusts
Trusts	Banking Activities	IB	Others

Credit Card Services

Others(Incl. FX.)

Note) Based on simple arithmetic sum of each subsidiary's Net Fee & Commission Income on the financial statements for group reporting

II. 1H20 Financial Analysis _ G&A Expenses & Provision for Credit Losses

Group G&A Expenses

bn won, %	1H20	1H19		YoY	2Q20		1Q20	QoQ

Employee Benefits	1,869.7	1,912.6	-2.2			991.2		878.5	12.8
Depreciation & Amortization	416.3	363.1	14.7			204.6		211.7		-3.4
Administrative Expenses	637.8	611.0	4.4		321.1		316.7		1.4
Others	121.8	114.1	6.7			69.5		52.3	32.9

G&A Expenses	3,045.6	3,000.8	1.5		1,586.4		1,459.2	8.7

Group Provision for Credit Losses

bn won, %	1H20	1H19	YoY	2Q20			1Q20	QoQ

Provision for Loan Losses	497.9	286.7		73.7		254.4	243.5		4.5
Provision for Guarantees	-7.9	8.3	N.A.	-7.4	-0.5	N.A.
Provision for Unused Commitments	51.2	-3.4		N.A.	50.7	0.5	N.A.
Provision for Financial Guarantee Liabilities	-1.5	2.2	N.A.	-1.7	0.2	N.A.

Provision for Credit Losses	539.7	293.8		83.7		296.0	243.7		21.5

G&A Expenses & CIR (bn won, %)				Provision for Credit Losses & CCR (bn won, %)

61.3	70.2
	55.2	54.5	54.9	52.1		0.44
		50.6
	57.4

56.0												0.27
	51.8		50.9	50.4	48.5		0.22	0.20	0.21	0.20	0.18
		50.5
			1,037
				6,271
			5,919
	5,229	5,629

4,524			5,787	3,001	3,046
	5,284	5,485				674	670
							548
4,135	4,188				2,891	2,926		539				540

												294
2015	2016	2017	2018	2019	1H19	1H20	2015	2016	2017	2018	2019	1H19	1H20

G&A Expenses

Non-recurring items

CIR

CIR(Excl. non-recurring items)

Provision for Credit Losses

CCR

Note) Non-recurring items include ERP, digitalization costs, etc.

II. 1H20 Financial Analysis _ Financial Position Overview

Group Financial Position

Group Assets (tn won)

tn won, %

Assets

Cash & Due from Financial Institutions FVTPL1) Assets

Financial Investments Loans

Property & Equipment

Other Assets

Liabilities

FVTPL1) Liabilities

Deposits

Debts

Debentures

Other Liabilities

Shareholder's Equity

Share Capital

Hybrid Securities

Capital Surplus

Accumulated Other

Comprehensive Income

Retained Earnings

Treasury Shares

Non-Controlling Interests

2020.6	2020.3		QoQ	2019.12		YTD

569.6	544.9	4.5	518.5		9.9

22.5	23.1	-2.6	20.8		8.2
58.7	57.1	2.8	53.5		9.7
74.8	73.5	1.8	71.8		4.2
367.9	351.4	4.7	339.7		8.3
7.9	7.9	0.0	7.9		0.0
37.8	31.9	18.5	24.8		52.4
529.3		506.1		4.6		479.4	10.4

13.4	12.7	5.5	15.4		-13.0
327.7	317.8	3.1	305.6		7.2
46.9	41.8	12.2	37.8		24.1
57.4	54.2	5.9	50.9		12.8
83.9	79.6	5.4	69.7		20.4
40.3		38.8		3.9		39.1	3.1

2.1	2.1	-	2.1		-
0.8	0.4	100.0	0.4		100.0
16.7	17.1	-2.3	17.1		-2.3
0.3	0.1	200.0	0.3		0.0
20.8	19.6	6.1	19.7		5.6
-1.1	-1.1		N.A.	-1.1		N.A.
0.7	0.6	16.7	0.6		16.7

					518.5	569.6
					26.1
				479.6
				23.7	23.9
		436.8		22.2	23.0	37.7
			36.6
			19.5	20.5	56.6
	375.7
		17.7	34.8	47.8
329.1		20.4	32.4	45.1
16.6	15.8	37.4

	32.4
	16.1
				387.4	425.3
	6.1		329.8	357.0
		307.1
	290.3


2015	2016	2017		2018	2019	2020.6
Bank	Securities	Insurance	Card	Others(Incl. adjustment for consolidation)

Note) Based on each subsidiary's total assets on the financial statements for group reporting

Group AUM (tn won)

						271.1		304.7
				252.7
			234.9			28.4	29.0

	216.6			30.8
						81.6
			25.8
		22.4				59.2
				51.0
		50.6

		52.7
120.4
							137.3
19.1					123.3		131.8
		115.2
	97.8
47.5

Group Total Assets 2)		873.5		810.4	7.8	789.8		10.6

	AUM 3)		304.7		266.6	14.3	271.1		12.4

Note 1) Fair Value Through Profit or Loss

Based on simple arithmetic sum of each subsidiary's total assets on the financial statement for group reporting and AUM
Including the Bank's trust asset not subject to group reporting

	19.6			43.7		43.3	47.6	51.7	56.8

	34.2


2015	2016	2017	2018	2019	2020.6

Bank Trust	Securities	Asset Management	Real Estate Trust & others

II. 1H20 Financial Analysis _ Assets & Liabilities

Bank Loans in Won

	tn won, %	2020.6		2020.3		QoQ	2019.12		YTD

Household	154.1		152.6		1.0	147.9		4.2

	Mortgage		82.1		82.1	0.0	77.2		6.3
	General	72.0		70.5		2.1	70.7		1.8
	[Home Equity]	31.0		31.0	0.0	31.8		-2.5

Corporate	133.2		127.8		4.2	121.1		10.0

	SME		111.6		106.4		4.9	103.3		8.0
	[SOHO]	74.0		70.8		4.5	69.2		6.9
	Large Corp, etc.	21.6		21.4	0.9	17.8		21.3

Total	287.2		280.4	2.4	269.0		6.8

Loan Portfolio (tn won, %)

207.3	220.6		234.9	257.4	269.0	287.2
	7.5
	7.6	6.8	7.0	6.6

	8.2	13.1
	12.1	12.4	12.6	12.7
	12.9


	23.3	24.4	25.6	25.5	25.7	25.8

	29.9	29.4	28.8	27.7	26.3	25.0

	25.8	26.5	26.4	27.2	28.7	28.6
2015	2016		2017	2018	2019	2020.6
	Mortgage	General	SOHO	SME(Excl. SOHO)	Corp, etc.

Bank Deposits & Debentures in Won

	tn won, %	2020.6		2020.3		QoQ	2019.12		YTD

Deposits	297.9		290.4	2.6	281.6		5.8

	Core Deposits		139.8		130.0		7.5	124.5		12.3
	Time & Savings	153.6		156.9	-2.1	152.9		0.5
	[Time Deposits]	141.0		144.1	-2.2	139.3		1.2
	CD, RP, etc.	4.5		3.5	28.6	4.2		7.1

Debentures		15.5		15.0	3.3	13.0		19.2

Total		313.4		305.4		2.6	294.6		6.4

Card Assets

	tn won, %	2020.6	2020.3		QoQ	2019.12		YTD

Credit Card	17.7	17.7	0.0	18.6	-4.8
	Credit Sales
	11.3		11.1		1.8	12.0	-5.8
	[Installments]	5.0	4.9	2.0	5.1	-2.0
	Card Loans	5.3	5.5	-3.6		5.3	0.0
	Cash Advance	1.1	1.2	-8.3		1.2	-8.3

Factoring, etc.		3.7	3.5	5.7	3.3		12.1

Total		21.4		21.2		0.9	21.9	-2.3

III. 1H20 Asset Quality _ Group Overview

Group Asset Quality

Precautionary & Below Ratio / NPL Ratio (%)

	bn won, %	2020.6		2020.3		QoQ	2019.12	YTD

Total Loans for NPL Classification	355,479.6		348,356.8	2.0	334,552.5		6.3

	Precautionary	2,440.4		2,630.1	-7.2	2,608.4	-6.4
	Substandard	761.6		704.7	8.1	662.5	15.0
	Doubtful	600.7		711.4	-15.6	700.9	-14.3
	Estimated Loss	355.5	341.9		4.0	288.4	23.3

Substandard & Below Loans(NPL) (A)	1,717.8		1,758.0	-2.3	1,651.8	4.0
NPL Ratio	0.48%		0.50%	-0.02%p	0.49%	-0.01%p

Loan Loss Reserves (B)	2,480.7		2,485.1	-0.2	2,430.0	2.1

1.42 1.39 1.40 1.38

0.61 0.60 0.59 0.55

1.27	1.26	1.17


0.49	0.50	0.48

NPL Coverage Ratio Ⅰ (B/A)	144.4%	141.4%	3.0%p	147.1%	-2.7%p
Reserves for Credit Lossess (C)	2,612.7	2,675.2	-2.3	2,555.2	2.3
NPL Coverage RatioⅡ[(B+C)/A]	296.5%	293.5%	3.0%p	301.8%	-5.3%p

Note) Based on simple arithmetic sum of each subsidiary's figures

'18.12	'19.3	'19.6	'19.9	'19.12	'20.3	'20.6
			Precautionary & Below Ratio				NPL Ratio

Credit Cost Ratio (%)

2.44

2.23 2.06 2.15 2.14

2.03	1.96

NPL Coverage Ratio (%)

278.1	268.6	262.4	246.6	263.4	249.6	249.8

0.30

0.21 0.15

0.13

0.05	-0.03

0.21	0.25

0.06 0.08

0.25 0.29

0.11 0.12

138.9	138.2		135.6	147.1	141.4	144.4
132.8

122.3	120.2		118.1	130.2	126.7	134.5
115.3

'18.12	'19.3	'19.6	'19.9	'19.12	'20.3	'20.6

4Q18	1Q19	2Q19	3Q19	4Q19	1Q20	2Q20
		Group	Bank	Card

Group

Bank

Card

III. 1H20 Asset Quality _ Bank & Card

Bank Asset Quality

	bn won, %	2020.6		2020.3		QoQ	2019.12		YTD

Total Loans for NPL	307,691.5	302,292.4	1.8		288,896.7		6.5
Classification

	Precautionary		1,058.9	1,195.8	5.0		1,249.2		-15.2
	Substandard	619.1	608.7	1.7		590.4		4.9
	Doubtful	269.5	348.0	-22.6		350.2		-23.1
	Estimated Loss	132.3		135.8	-2.6		116.6	13.5

NPL Ratio		0.33%	0.36%	-0.03%p	0.37%		-0.04%p

NPL Coverage Ratio		134.5%	126.7%		7.8%p	130.2%	4.3%p

Delinquency Ratio (%)

1.24	1.23	1.20	1.32	1.25	1.16	1.11	1.24
						1.08

0.35	0.24	0.23	0.27	0.26	0.29	0.24	0.24	0.21
2016	2017	2018	'19.3	'19.6	'19.9	'19.12	'20.3	'20.6
			Bank		Card

Card Asset Quality

	bn won, %	2020.6		2020.3		QoQ	2019.12		YTD

Total Loans for NPL	21,446.6	21,235.6	1.0		21,922.4	-2.2
Classification

	Precautionary
	759.7	838.2		-9.4		875.1	-13.2
	Substandard	4.1	3.1	30.8		3.6		14.3
	Doubtful	206.0	236.7	-13.0	223.0		-7.6
	Estimated Loss	106.7	80.9	31.9		73.0		46.1

NPL Ratio	1.48%	1.51%	-0.03%p	1.37%		0.11%p

1.30	1.40	1.38

0.74	0.58	0.48

2016	2017	2018

NPL Ratio (%)

1.46	1.46	1.49	1.37

0.47 0.45 0.41 0.37

'19.3 '19.6 '19.9 '19.12

Bank Card

1.51 1.48

0.36	0.33

'20.3 '20.6

NPL Coverage Ratio	249.8%	249.6%	0.2%p	263.4%	-13.6%p

Provision for Loan Losses

bn won, %	1H20	1H19		YoY	2Q20	1Q20	QoQ

Bank	172.1	17.6	877.8	93.4	78.7	18.7
Household
157.4	104.7	50.3	90.0	67.4	33.5
Corporate	14.7	-87.1		N.A.	3.4	11.3	-69.9

Card	213.7	206.7	3.4	104.7	109.0		-3.9

Bank Credit Cost Ratio (%)

0.22			0.16	0.14	0.19	0.19	0.18	0.24
	0.10	0.13

0.11					0.11	0.12
0.05	0.04	0.05		0.06	0.08
	-0.03
0.01	0.01					0.03	0.01
-0.06	-0.06		-0.08	-0.04
		-0.20

2016	2017	2018	1Q19	2Q19	3Q19	4Q19	1Q20	2Q20
		Bank		Household		Corporate

IV. 1H20 Financial Highlights of Major Subsidiaries _ KB Kookmin Bank

Profitability Overview 1)		Net Interest Income & NIM (bn won, %)

bn won, %	1H20	1H19		YoY		2Q20	1Q20		QoQ

Net Interest Income	3,275.7	3,139.7	4.3		1,638.2		1,637.5	0.0
Net Fee & Commission Income	543.0	577.9	-6.0		257.2		285.8	-10.0
Other Operating Profit	8.9	-76.2		N.A.		135.8		-126.9		N.A.
Gross Operating Income	3,827.6	3,641.4	5.1		2,031.2		1,796.4	13.1
G&A Expenses	1,875.3	1,859.8	0.8		988.1		887.2	11.4
Provision for Credit Losses	216.0	24.2	792.6		139.4		76.6	82.0
Net Operating Profit	1,736.3	1,757.4	-1.2		903.7		832.6	8.5
Net Non-Operating Profit	-25.8	8.3		N.A.		9.4		-35.2		N.A.
Profit for the Period 2)	1,246.7	1,305.1	-4.5		660.4		586.3	12.6

Note 1) Based on financial statements for group reporting 2) Profit attributable to controlling interests

		Net Profit (bn won)
			2,259	2,439

		2,175
						1,318
					1,305+2.9%
1,107	964

					1,281	1,247
2015	2016	2017	2018	2019	1H19	1H20

Major non-recurring items

Note) Major non-recurring items (after tax)

1H19: Large-scale reversals of provisioning(W59bn), ERP costs(W35bn)

1H20: Preemptive provisioning based on FLC(W115bn),

Large-scale reversals of provisioning(W55bn), CVA net losses(W12bn)

		1.71	1.71	1.67	1.70
1.61
1.58				1.53

				6,364
			6,101
					3,276
		5,394			3,140
4,712	4,829


2015	2016	2017	2018	2019	1H19	1H20
		Net Interest Income	NIM

	Net Fee & Commission Income (bn won)
1,156	1,088	1,225		1,123		1,133

		266
242		228	208	578
253		57		543
101			47	66	111

79		176
160			147	129		124
157		225		204	200	32
239			222	64		44
235		195		210	98		73
173
182						108		92
		306		287	308		100
241	182			165
			110

2015	2016	2017		2018		2019	1H19	1H20
Trusts	Banking Activities	Card Services	Mutual Fund Sales	Bancassurance	FX, etc.
	CIR (bn won, %)				CCR (bn won, %)
	51.1	49.0					0.12
				0.01

						216

	1,860	1,875
						24
	1H19	1H20				1H19	1H20
G&A Expenses	CIR			Provision for Credit Losses		CCR
									12

Major non-recurringitems 2)

IV. 1H20 Financial Highlights of Major Subsidiaries _ KB Securities

Profitability Overview 1)

bn won, %	1H20	1H19	YoY	2Q20		1Q20		QoQ

Net Fee & Commission Income	399.2	283.5		40.8			224.9		174.3		29.0
Brokerage	244.7	127.4		92.1			146.6		98.1		49.4
Investment Banking	129.9	116.9		11.1		63.3		66.6		-5.0
Financial Products	27.3	35.2		-22.4			13.3		14.0		-5.0
Others	-2.7	4.0		N.A.	1.7		-4.4		N.A.
Interest Income	244.4	266.9		-8.4			120.2		124.2		-3.2
Trading	-33.0	16.5	N.A.	91.6		-124.6		N.A.
G&A Expenses	382.7	363.3		5.3			201.0		181.7		10.6
Provision for Credit Losses	23.8	5.1		366.7			3.0		20.8		-85.6
Net Operating Profit	204.1	198.5		2.8			232.7		-28.6		N.A.
Net Non-Operating Profit	-20.7	34.3		N.A.	-23.6		2.9		N.A.
Profit for the Period 2)	128.8	168.9		-23.7			150.2		-21.4		N.A.

Note 1) Based on financial statements for group reporting 2) Profit attributable to controlling interests

Net Profit (bn won)

272		258

	179		169	+13.8%	192


					129
2017	2018	2019	1H19		1H20

Note) Major non-recurring items (after tax) 1H20: PEF related losses including TRS valuation losses (W29bn),

Provisioning for receivables from brokerage business(W14bn)

Provisioning for potential reimbursement related to investors' losses in PEF(W21bn)

	Net Fee & Commission Income (bn won)
552	625		580		399
	56
	48	68
	284	24
	216
	215	267
	40	130

		353		117
	288	245	127	245


2017	2018		2019	1H19	1H20
	Brokerage	IB	Sales of Financial Products, etc.

		Retail AUM (tn won)	83
		73	70
61	64
	30
		28	28
15	20

46	44	45	42	53
2017	2018	2019	'20.3	'20.6
		Brokerage	WM

Assets under WM

tn won, %	2020.6	2020.3		2019.12	3.7%

Bonds	16.0	14.4	14.1	19.5%
Trusts	6.8	6.0	6.1

Funds	5.8	6.3	6.7
ELS/DLS	1.1	1.2	1.5	22.9%		53.9%

Total	29.7	27.9	28.4



							Bonds	Trusts	Funds	ELS/DLS

IV. 1H20 Financial Highlights of Major Subsidiaries _ KB Insurance

Profitability Overview 1)

bn won, %	1H20	1H19	YoY	2Q20		1Q20		QoQ

Direct Premium Written	5,467.0	5,138.4	6.4		2,729.5		2,737.5		-0.3

Net Premium Earned	4,704.2	4,545.0	3.5		2,369.4		2,334.8		1.5

Loss Ratio	85.5%	83.9%	1.6%p	84.4%		86.6%		-2.2%p
Expense Ratio	20.7%	22.6%	-1.9%p	20.7%		20.7%		0.0%p

Underwriting Profit	-290.2	-293.7	N.A.	-120.1		-170.1		N.A.
Investment Income	449.3	475.1		-5.4		193.5		255.8		-24.4

Profit for the Period 2)	144.0	166.2	-13.4		66.8		77.2		-13.5
RBC Ratio	187.2%	193.3%	-6.1%p	187.2%		189.1%		-1.9%p

Note 1) Based on financial statements for group reporting 2) Profit attributable to controlling interests

Net Profit & EV 1) (bn won)

330		7,537
	6,607	6,219

	4,712

Direct Premium Written

bn won		2Q20		1Q20	2019
Long Term	1,813.9	1,796.1		7,083.3
Protection	1,662.3	1,638.4		6,361.5
Savings	151.6	157.6	721.8
Auto	659.4	606.8		2,206.7
General	256.2	334.6		982.8

Total	2,729.5	2,737.5	10,272.8

Asset Portfolio

bn won		2020.6		2020.3	2019.12
Cash & Due	288.1	288.4	559.2
Securities	22,040.2	21,569.9		20,633.0
Bonds	11,819.8	11,552.9	10,715.7
F/C Securities	3,782.1	4,158.1		4,243.2
Equities, etc.	6,438.3	5,858.9	5,674.1
Loans	6,972.1		6,919.2	6,872.1
Real Estate	928.9	936.5	943.1

Total	30,229.3	29,714.0	29,007.4

9.4%

24.2%

5.5%60.9%

LT(Protection) LT(Savings)

Auto General

3.1%	1.0%

23.0%	39.1%

21.3%		12.5%
Cash & Due	Bonds	F/C Securities
Equities, etc.	Loans	Real Estate

3,152	262	234

		166
			144

2017	2018	2019	1H19 2)	1H20 2)
		Net Profit	EV

	88.3
83.4	84.2

82.2	84.0

80.7
71.3	71.0
2017	2018

Loss Ratio (%)

92.0

86.1

85.1

75.7

2019

88.0	97.4

86.6	84.4

84.7	84.2
82.0

74.9

1Q202Q20

Note 1) EVs are based on identical assumptions sets	Total	Long Term	Auto	General
2) EVs are figures as of the end of June in each year

IV. 1H20 Financial Highlights of Major Subsidiaries _ KB Kookmin Card

Profitability Overview 1)

bn won, %	1H20		1H19	YoY	2Q20		1Q20		QoQ

Operating Revenue		1,986.7		1,914.7	3.8			997.7		989.0		0.9
Card		1,737.1		1,695.2		2.5			876.5		860.6		1.8
Installment & Lease Financing	49.4		33.3		48.3			25.3		24.1		5.0
Others	200.2		186.2	7.5			95.9		104.3		-8.1

Operating Expense	1,306.7		1,304.4		0.2			656.5		650.2		1.0

Interest Expense	179.5		172.6		4.0			88.6		90.9		-2.5
Commissions & Other Expenses	1,127.2		1,131.7		-0.4			567.9		559.3		1.5
Gross Operating Income	680.0		610.3	11.4			341.2		338.8		0.7
G&A Expenses	228.7		204.4		11.9			117.0		111.7		4.7
Provision for Credit Losses	228.0		209.0		9.1			111.9		116.1		-3.6
Net Operating Profit	223.3		196.9	13.4			112.3		111.0		1.2
Net Non-Operating Profit	-1.8		-0.8		N.A.	-1.0		-0.8		N.A.
Profit for the period 2)	163.8		146.1	12.1			81.7		82.1		-0.5

Note 1) Based on financial statements for group reporting 2) Profit attributable to controlling interests

Net Profit (bn won)

355
	317	297		317
		287

					146	164

2015	2016	2017	2018	2019	1H19	1H20

	Card Transaction Volume (tn won)
33.0	35.0	36.0	36.7	34.1	35.7

8.3	8.6	9.0	8.9	8.2	8.4
24.7	26.4	27.0	27.8	25.9	27.3
1Q19	2Q19	3Q19	4Q19	1Q20	2Q20

		Card Assets			Credit Card		Check Card






		bn won	2020.6		2020.3		2019.12		17.6%


Credit Card	17,669.5	17,744.1	18,591.9



		Credit Sales	11,253.9	11,053.4	12,038.2
		[Installments] 4,954.5	4,949.8	5,127.4			24.9%
		Card Loans	5,345.2	5,529.3	5,345.4						52.5%
		Cash Advance	1,070.4		1,161.3	1,208.2		5.0%


Factoring, etc.	3,768.1		3,477.5	3,312.6
															Credit Sales			Cash Advance
Total	21,437.6	21,221.6	21,904.5


					Card Loans				Factoring, etc.

		Funding



		bn won	2020.6				2020.3		2019.12	6.6%

													7.2%
Borrowings	1,102.4			1,124.1			1,129.2

Debentures	14,353.2			13,283.4		13,353.2
ABS	1,196.0			1,391.1		1,460.3

Total	16,651.6			15,798.6		15,942.6						86.2%


														Borrowings		Debentures	ABS

V. Appendix_ Overview of Group Subsidiaries 1) (1H20)

bn won		Ownership	Total Assets	Shareholder's Equity	Profit for the Period	ROA 2)	ROE 2)

KB Kookmin Bank	100.0%		425,310.3	29,323.0	1,246.7	0.62%	8.67%

KB Securities	100.0%		56,606.6	4,804.2	128.8		0.49%		5.51%

KB Insurance	100.0%		37,677.1	4,057.0	144.0	0.78%		7.31%

KB Kookmin Card	100.0%		23,858.8	4,098.3	163.8	1.43%		8.11%

KB Asset Management	100.0%		385.9	187.6	21.6		11.97%		23.59%

KB Capital	100.0%		12,140.4	1,274.0	73.5	1.29%	12.18%

KB Life Insurance	100.0%		9,998.8	636.9	11.8	0.24%		3.82%

KB Real Estate Trust	100.0%		393.4	301.1	38.3		20.17%	26.33%

KB Savings Bank	100.0%		1,550.0	218.9	9.9		1.38%	9.27%

KB Investment	100.0%		801.3	216.2	1.5		0.39%		1.41%

KB Data Systems	100.0%		44.5	21.6	0.9		4.17%		8.47%

KB Credit Information	100.0%		28.5	14.8	-0.1	n.a.	n.a.

Note 1) Based on each subsidiary's financial statements for group reporting 2) Annualized

V. Appendix _ Condensed Income Statement by Subsidiaries

bn won		Group								1H20

	KB Kookmin	KB Securities	KB Insurance	KB Kookmin	KB Asset	KB Capital	KB Life	Others 1)

				Bank	Card	Management	Insurance


Net Interest Income	4,683.2	3,275.7		244.4	306.7		624.4	1.1	161.2	72.2		-2.5
Net Fee & Commission Income	1,381.3	543.0		399.2	-84.9	179.5	60.4	238.4	-7.4	53.1
Other Operating Profit		-49.6		8.9		-33.0	373.5		-123.9	-3.8	-182.1	-16.6	-72.6

Gross Operating Income		6,014.9		3,827.6		610.6	595.3		680.0	57.7	217.5	48.2		-22.0

G&A Expenses		3,045.6		1,875.3		382.7	408.3		228.7	27.7	54.2	33.7		35.0
Provision for Credit Losses		539.7		216.0		23.8		-3.4		228.0	0.0	66.9	-1.0	9.4

Net Operating Profit		2,429.6		1,736.3		204.1	190.4	223.3		30.0	96.4	15.5		-66.4

Net Non-Operating Profit		-34.0		-25.8		-20.7	7.7	-1.8	-0.2	2.4	-0.1		4.5

Profit for the Period		1,731.4		1,257.3		128.8		143.8	163.8	21.6	74.7	11.8	-70.4
Profit attributable to
1,711.3		1,246.7		128.8		144.0	163.8	21.6	73.5		11.8	-78.9
controlling interests

bn won		Group								1H19

	KB Kookmin		KB Securities	KB Insurance	KB Kookmin	KB Asset	KB Capital	KB Life	Others 1)

				Bank		Card	Insurance
									Management

Net Interest Income		4,549.2		3,139.7		266.9	308.6		603.8	0.5	153.9	84.5	-8.7
Net Fee & Commission Income	1,135.7	577.9	283.5	-76.7		104.9	56.2	153.8	-8.5		44.6
Other Operating Profit		79.1	-76.2	16.5	404.3	-98.4		6.4	-116.2	-19.9	-37.4

Gross Operating Income		5,764.0		3,641.4		566.9	636.2	610.3	63.1	191.5	56.1		-1.5

G&A Expenses		3,000.8		1,859.8		363.3	420.0	204.4	27.9	49.6	33.4		42.4
Provision for Credit Losses		293.8	24.2	5.1	-3.0		209.0	0.0	59.3	-2.2		1.4

Net Operating Profit		2,469.4		1,757.4		198.5	219.2		196.9	35.2	82.6	24.9		-45.3

Net Non-Operating Profit		55.3		8.3		34.3	9.8	-0.8	-0.2	1.9	-0.1		2.1

Profit for the Period		1,837.4		1,305.1		168.9	166.4	146.1	25.7	63.9	16.5	-55.2
Profit attributable to
1,836.8		1,305.1		168.9	166.2	146.1	25.7	63.1	16.5	-54.8
controlling interests

Note 1) Includes financial results of the holding company, the other subsidiaries and adjustment for consolidation

Attachments

Disclaimer

KB Financial Group Inc. published this content on 21 July 2020 and is solely responsible for the information contained therein. Distributed by Public, unedited and unaltered, on 21 July 2020 08:15:08 UTC

MarketScreener Homepage > Equities > Korea Stock Exchange > KB Financial Group Inc. A105560 KR7105560007

KB FINANCIAL GROUP INC.

KB Financial : 2020 1st Half Earnings Release

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