KB Financial : 2024 1st Quarter Earnings Release

1Q24 Business Results

April. 2024

1. Key Takeaways

1. 1Q24 Financial Highlights III. Financial Analysis
   IV. Asset Quality

1. Financial Highlights of Major Subsidiaries VI. Appendix

1. 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.
2. The consolidated financial information for 2023 presented herein is based on Korean IFRS17(K-IFRS17), and note that the financial results for 2022 contained herein have also been restated retrospectively.
3. From 3Q21, the Group applied accounting policy in accordance the International Financial Reporting Interpretation Committee(IFRIC) agenda decision over K-IFRS No.1019(Employee benefits). However, please note that the financial information for the past period contained herein has not been restated retrospectively.
4. As Prudential Life Insurance became wholly-owned subsidiary of the Group as of August 31, 2020, the financial results have been fully consolidated in the Group's financial statements since September, 2020.
5. Former KB Life Insurance was merged with and into Prudential Life Insurance(the surviving entity) as of January 1, 2023, which had been renamed as "KB Life Insurance Co., Ltd." prior to the merger.
6. On June 30, 2023, KB Financial Group sold 100% of the shares of KB Credit Information, a former first-tier subsidiary of the Group, to KB Kookmin Card. Consequently, KB Credit Information became a second-tier subsidiary of the Group.
7. From 4Q23, the Group applied Variable Fee Approach Model in accordance with Financial Supervisory Service's guidelines on actuarial assumptions, and financial results from 1Q23 to 3Q23 contained herein have also been restated retrospectively.
8. Total may not sum due to rounding.

I. Key Takeaways _ KBFG Shareholder Return & Capital Management Policy

Shareholder Return History

(bn Won)

Shareholder	2016
Return	*Total Cash
		498 bn
	Dividends
	[Industry's First]
	Feb: Share buyback(300 bn)
	Aug: Share buyback(500 bn)

2017

2018

2019

2020

2021

767 bn

760 bn

861 bn

690 bn

1,145 bn

Nov: Share buyback(300 bn)

Jun: Disposal of treasury shares(216 bn)

[Industry's First]

* Share swaps with KB Insurance and KB Capital

Dec: Cancellation of

Aug: Quarterly dividend

Nov: Share buyback(300 bn)

treasury shares(100 bn)

payout(292 bn)

2022

1,150 bn

Feb: Cancellation of

treasury shares(150 bn)

Apr: Establishment of

Shareholder Return policy

Aug: Cancellation of

treasury shares(150 bn)

20232024

1,174 bn

Feb: Share buyback & cancellation(320 bn)

Feb: Share buyback & cancellation(300 bn) Aug: Share buyback & cancellation(300 bn)

Shareholder Return & Capital Management Policy

Shareholder Return Policy

Quarterly-even dividends on a total annual amount basis		2024
Predictable total annual dividends payout				Industry's
	First

Secure current level and progressive dividends per share

Implement both cash dividends and share buyback & cancellation programs (Considering the level of net income, cash dividends, CET1 ratio, and etc.)

* Implement adaptive strategies responding to managerial objectives, regulatory changes, financial volatilities, etc.

Capital Management Policy

Consistently maintain 『Mid-to-LongTerm Capital Management Plan』 announced in 2023 (Pursue stable level of capital adequacy)

In order to prepare for future economic volatility and to continue advancing a leading shareholder return policy, secure the Group's industry-leading-capital strength by managing the year-end CET1 ratio at a mid-13% level

2024 Shareholder Return Policy

Total annual amt. basis	"	Approx. W1.2 tn total annual dividends for FY2024
Quarterly-even
	(W300 bn quarterly dividends)
Dividends
Total Annual Dividends (bn won)	Quarterly Dividends (bn won)	DPS (won) "
2023				2024
1,174 bn		1,200 bn(E)
	"Increase in per-share cash
			dividends resulting from share

587buyback & cancellation"

				300	300(E)	300(E)	300(E)
			1,530
196	196	195
510	510	510		784
1Q	2Q	3Q	4Q	1Q	2Q	3Q	4Q

02

I. [Reference Items] KBFG Shareholder Return & Capital Management Policy

Total Shareholder Return (bn won, %)

	37.7
26.0	26.2
20.0
	572

"Flexible implementation of share buyback & cancellation"

DPS (Won, %))
5.1	5.8
4.8	"Increase in per-share cash
3.9		dividends resulting from share
		buyback & cancellation"

	1,145	1,150	1,174	1,200(E)
690	(26.0%)	(26.2%)	(25.4%)
(20.0%)
2020	2021	2022	2023	2024(E)

300

1Q24

2,940 2,950 3,060

1,770

2020 2021 2022 2023

	1Q+α	2Q+β	3Q+γ
	(E)
784	(E)
(E)
1Q24	2Q24	3Q24	4Q24

TSR

Cash Dividends

Share buyback & cancellation

Dividend Yield Ratio

DPS

Note 1) On a fiscal year basis

Note 2) The amounts in parentheses indicates cash dividend payout ratio

CET1 Ratio Movement (%)		EPS (Won)

0.31	0.50				11,580+α
				11,134	11,580
13.59				10,334
	0.09	0.11	13.40	8,843
		0.02			4,053
					1,426
					2,627

Dec. 23

Net

RWA

Cash

Share

OCI and

Mar. 24(E)

2020

2021

2022

2023

2024(E)

1Q24

CET1

Income

Dividend

Buyback

etc.

CET1

Note) (Bank) HSCEI tied ELS customer compensation cost(634 bn after tax)

One-off itemNote)

(Insurance) Reversal of reserves due to changes in accounting standards on

IBNR(Incurred But Not Reported) (90 bn after tax)

03

One-offitem Note2)

II. 1Q24 Financial Highlights _ Overview

Group Profitability Overview

Highlights

bn won, %

Net Interest Income

Net Fee & Commission Income

Other Operating Profit

Gross Operating Income

G&A Expenses

PPOP

Provision for Credit Losses

Net Operating Profit

Net Non-Operating Profit

Profit for the Period

Profit attributable to controlling interests

1Q24

3,151.5

990.1

270.4

4,412.0

1,628.2

2,783.8

428.4

2,355.4

-948.0

1,063.2

1,049.1

1Q23

2,823.9

914.0

636.6

4,374.5

1,566.3

2,808.2

668.2

2,140.0

-96.2

1,510.3

1,508.7

YoY

11.6

8.3 -57.5

0.9

4.0

-0.9

-35.9

10.1

N.A.

-29.6

-30.5

4Q23

3,183.4

906.7 -492.4

3,597.7

1,923.5

1,674.2

1,378.2

296.0

-33.0

211.4

255.4

QoQ

-1.0 9.2

N.A.

22.6

-15.4

66.3

-68.9

695.7

N.A.

402.9

310.8

Net Profit for 1Q24

1,049.1bn

(-30.5% YoY)

Decreased 30.5% YoY due to ELS compensation cost despite reduce in provisioning costs and stable growth in core income

Net Fee & Commission for 1Q24

9,901bn

(+9.2% QoQ)

Net Interest Income for 1Q24

3,151.5bn

(Group NIM +3bp QoQ)

11.6% YoY growth driven by increase in balances and improved NIM. Limited to decreasing only 1% QoQ, maintaining a strong earnings fundamental

CIR for 1Q24

36.9%

(30% range for 5 consecutive quarters)

cum. recurring basis

Group Net Profit Trend1) (bn won)

CAGR 8.7%

		4,410		4,632
		4,153
					1,593
3,312	3,455				1,509
						544
						1,049
2019	2020	2021	2022	2023	1Q23	1Q24

Note 1) Based on profit attributable to controlling interests Note 2) Non-recurring items(after tax)

(Bank) HSCEI tied ELS customer compensation cost(634 bn)

(Insurance) Reversal of reserves due to changes in accounting standards on IBNR (Incurred But Not Reported)(90 bn)

Continued growth of 9.2% QoQ mainly attributable to increase in fee income of securities business such as brokerage and IB, and growth in card fees led by cost control efforts

Credit Cost for 1Q24

0.38%

(Bank CCR 0.11%)

Well-managed at a stable level of 0.38%. Continue to pursue conservative risk management against potential economic downturn

Continued downward stabilization of CIR highlighted by Group's persistent effort in cost control

Enhanced Visibility of Shareholder Return

Quarterly-even dividends

( W300 bn per quarter)

Industry's first to adopt 'Total annual amount based quarterly-even dividends coupled with the Group's share buyback & cancellation to promote increase in DPS

04

II. 1Q24 Financial Highlights _ Key Financial Indicators (1)

	Group ROA·ROE (%)
	11.58		11.53	12.18
10.15		10.33
	10.22
8.79		8.83	9.18	8.15
0.61	0.69	0.57	0.65	0.59
2020	2021	2022	2023	1Q24
ROA	ROE	ROE(excl. non-recurring items)

Note) Ratios for 2020 and 2021 have not been restated retrospectively under IFRS17

Loans in Won Growth(tn won, %)

	1.1	1.8	1.5	0.6
-0.6
326	330	336	342	344
164	167	172	175	177
		3.0
1.0	0.9		1.6	0.7
162	163	164	167	167
	0.5	0.6	1.5	0.4
-2.2
'23.3	'23.6	'23.9	'23.12	'24.3
	Household		Corporate
	Total Growth(QoQ)		Household Growth(QoQ)

Corporate Growth(QoQ)

	NIM (%)
2.10	2.09	2.11
2.08
		2.08
2.04
1.85	1.84	1.87
1.83
		1.83
1.79

1Q23 2Q23 3Q23 4Q23 1Q24

Group Bank Cumulative

Sustained solid profitability		Secured stable growth
amid rising market volatility		applying conservative credit policy

NIM expansion driven by funding cost management

• Group ROA and ROE for 1Q24 recorded 0.59% and 8.15% respectively
• When disregarding one-off items such as ELS compensation cost, ROE for 1Q24 recorded 12.18% highlighting Group's leveled up earnings fundamental despite financial market volatility
• Pursue further enhancement in profitability through strengthened cost control and risk management on the basis of balanced growth between banking and non-banking business
  * ROE : Based on Return on Common Equity, excluding hybrid securities, which represents profitability of common equity

• Loans in Won of the bank grew 0.6% YTD, amounting to W344tn as of the end of 1Q24
• Household loan growth slowed down to 0.4% YTD mainly due to tightened government regulations on household debt
• Corporate loans increased 0.7% YTD led by modest growth of both Large Corp. and SME loans

• 1Q24 Group NIM and Bank NIM marked 2.11% and 1.87%, up by 3bp and 4bp respectively
• Bank NIM increased by 4bp QoQ led by solid growth in low-cost deposits coupled with reduced funding pressure on time and saving deposits
• Group NIM increased 3bp QoQ attributable to improvement in bank NIM despite higher funding pressure on Card NIM

05

II. 1Q24 Financial Highlights _ Key Financial Indicators (2)

Group Cost Efficiency(CIR) (%)	Credit Cost Ratio(CCR) (%)
54.7			0.67
49.7		0.43	0.38
	0.30
0.26
48.2

49.4								0.40
				0.20	0.21	0.26	0.30
	46.3		41.0
		44.4		36.9	0.13	0.11	0.13		0.11
			37.4		0.09	0.06	0.09	0.06
2020	2021	2022	2023	1Q24	2020	2021	2022	2023	1Q24
	CIR	Excl. non-recurring items		Group		Bank	Excl. non-recurring items

Note) Ratios for 2020 and 2021 have not been restated retrospectively under IFRS17

Group BIS Ratio (Basel III, %)

	16.73	16.54
	16.16
	15.77
15.28	15.37	15.24
14.86
	14.54

14.06

13.59

13.30 13.46 13.24 13.40

2020

2021

2022

2023

1Q24

BIS Tier1 CET1

Continued enhancement in

cost efficiency

• Group CIR for 1Q24 recorded 36.9%
• Stabilized downward trend of CIR backed by robust core income growth and group-wide cost control effort
• Pursue further improvement in cost efficiency by minimizing running expenses in an aim to relieve rigidity in costs, while continue investing in new growth engines to secure future growth

Stable asset quality

despite macro headwinds

• 1Q24 Group and Bank CCR marked 0.38%, 0.11% respectively
• Both Group and Bank CCR for 1Q24 demonstrated sharp decrease on QoQ basis, mainly attributable to the base effect of last year's large-scale preemptive provisioning
• Continue to pursue conservative risk management considering macro uncertainties and potential credit risks

Industry-leading capital adequacy

• 1Q24 Group BIS and CET1 ratios are expected to mark 16.54%, 13.40% respectively
• Maintained industry leading level of capital adequacy backed by solid earnings fundamental and strategic capital management policy
• 1Q24 Bank BIS and CET1 ratios are expected to record 17.31%, 14.34%, respectively

06

III. Financial Analysis _ Net Interest Income

Group Net Interest Income

Loan Growth (tn won, %)

bn won, %

Interest Income

Loans

Financial Investments

Others

Interest Expense

Deposits

Debts & Debentures

Others

Net Interest Income

1Q24

7,614.0

6,056.7

1,303.7

253.6

4,462.5

2,631.8

1,261.9

568.8

3,151.5

1Q23

6,866.6

5,562.5

1,096.9

207.2

4,042.7

2,342.9

1,140.1

559.7

2,823.9

YoY

4Q23

10.9 7,734.5

8.9 6,175.9

18.9 1,297.6

22.4 261.0

10.4 4,551.1

12.3 2,732.1

10.7 1,287.8

1.6 531.2

11.6 3,183.4

QoQ

-1.6

-1.9

0.5

-2.8

-1.9

-3.7-2.0

7.1

-1.0

		329	329	327	330	336	342	344
321	323
		3.1	3.1				4.0
				2.4
0.8	1.2				1.1
	1.9
					1.8	1.5
					0.5		0.6
	0.4		0.0
		-0.6
'22.3	'22.6	'22.9	'22.12	'23.3	'23.6	'23.9	'23.12	'24.3

Bank Loans in Won

Growth(QoQ)

Growth(YTD)

Net Interest Income (bn won)

				12,142
			11,515	632
		9,573	750	1,640	3,152
		453	1,474	2,824
	8,122	185
7,678	1,391		76
101		414
84			401
1,266
1,230
			9,291	9,870
		7,729		2,553
6,364	6,755		2,347

NIM (%)

1.96	1.98

1.911.76

1.73

1.66

2.04	2.10	2.09	2.08	2.11
		2.08
1.99

1.96		1.87
1.85	1.84
1.83

1.77

1.83

1.73

1.79

2019

2020

2021

2022

2023

1Q23

1Q24

Bank		Card		Others(incl. adjustment for consolidation)

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

1Q22	2Q22	3Q22	4Q22	1Q23	2Q23	3Q23	4Q23	1Q24
			Group				Bank		Cumulative

07

III. Financial Analysis _ Net Non-Interest Income

Group Net Non-Interest Income

Fee Income Contribution

bn won, %

Net Fee & Commission Income

Credit Card Fees

Trusts

Agent Activity Fees

(Incl. Bancassurance)

Represent Securities

(Incl. ITC Products)

Banking Activity Fees

Securities Business

Others

Other Operating Income

Net Non-Interest Income

1Q24

990.1

214.1

103.0

48.5

28.8

47.5

174.5

373.7

270.4

1,260.5

1Q23

914.0

195.1

121.8

52.6

30.2

45.9

137.7

330.7

636.6

1,550.6

YoY

4Q23

8.3 906.7

9.7 198.6

-15.4 124.3

-7.8 40.5

-4.6

25.9

3.5 45.7

26.7 136.1

13.0 335.6 -57.5-492.4

-18.7 414.3

QoQ

9.2

7.8 -17.1

19.8

11.2

3.9

28.2

11.4

N.A.

204.2

34.4%		31.0%
1Q23		1Q24
	65.6%	69.0%

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)

Composition of Fee Income (bn won)

		3,626	3,515	3,674
	2,959	877
		1,113	1,149
	573
2,355	546			914	990
			614
380	401		520		293
262					289
	1,015
	917	785	743
580		157	200
					161	197
1,133	1,068	1,188	1,097	1,168	307	300
2019	2020	2021	2022	2023	1Q23	1Q24
Bank		Securities	Card	Others(incl. adjustment for consolidation)

113

27

Bancassurance

Trusts

Credit Card Services

40			119
23
	253
Bank	Non-Bank
47
			201
50	27
69
Mutual Fund Sales, etc.	Brokerage	Credit Card	Trust
Banking Activities	IB	Others(incl. lease, etc.)
Others(incl. FX, etc.)

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

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

08

III. Financial Analysis _ G&A Expenses & Provision for Credit Losses

Group G&A Expenses

Group Provision for Credit Losses

bn won, %

Employee Benefits

Depreciation & Amortization

Administrative Expenses

Others

G&A Expenses

1Q24

1,020.1

216.9

325.9

65.3

1,628.2

1Q23

949.7

205.5

355.3

55.8

1,566.3

YoY

4Q23

7.4 1,179.1

5.5 232.5

-8.3 455.0

17.0 56.9

4.0 1,923.5

QoQ

-13.5

-6.7

-28.4

14.8

-15.4

bn won, %

Provision for Loan Losses Provision for Guarantees Provision for Unused Commitments Provision for Financial Guarantee Liabilities

Provision for Credit Losses

1Q24

426.4

13.5

-12.4

0.9

428.4

1Q23

643.9

22.6

1.1

0.6

668.2

YoY		4Q23
-33.8	1,381.1
-40.3	-4.2
N.A.	1.9

50.0 -0.6-35.9 1,378.2

QoQ

-69.1

N.A.

N.A.

N.A.

-68.9

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

54.9	54.7										0.67	0.63
49.7
		48.2							0.43	0.40		0.38
50.9								0.26	0.30
49.4			41.0
46.3				0.20
		44.4			36.9				3,146
				35.8				0.26
							0.20	0.21
				37.4
										542
		7,201
	6,833	6,644	6,647
	558
6,271	243						1,848
514	604	436							668
462	626	1,566	1,628				242
		497
								1,043	1,185		3,095		428
									264
5,809	5,964	6,129					670	377
5,543	6,211				1,606
								666	921
2019	2020	2021	2022	2023	1Q23	1Q24	2019	2020	2021	2022	2023	1Q23	1Q24
Non-recurring items	M&A-related items	CIR	CIR(excl. non-recurring items)		FLC-related additional provision	CCR		CCR(excl. non-recurring items)
Note 1) Ratio for 1Q23 is based on IFRS17
Note 2) Non-recurring items: ERP, Digitalization costs, etc.
M&A-related items: financial consolidation effect in relation to the acquisition of Prasac, Prudential Life
Insurance, Bank Bukopin, etc.

09