.2

KB Financial Group Inc.

Separate Interim Financial Statements

June 30, 2026 and 2025

(Unaudited)

 

KB Financial Group Inc.

 

		Page(s)
Report on Review of Condensed Separate Interim Financial Statements			1-2
Separate Interim Financial Statements
Separate Interim Statements of Financial Position			3
Separate Interim Statements of Comprehensive Income			4
Separate Interim Statements of Changes in Equity			5
Separate Interim Statements of Cash Flows			6
Notes to the Separate Interim Financial Statements			7-53

 

Report on Review of Condensed Separate Interim Financial Statements

(English Translation of a Report Originally Issued in Korean)

To the Shareholders and the Board of Directors of

KB Financial Group Inc.

Reviewed Financial Statements

We have reviewed the accompanying condensed separate interim financial statements of KB Financial Group Inc. (the “Company”). These condensed separate interim financial statements consist of the separate interim statement of financial position of the Company as at June 30, 2026, and the related separate interim statements of comprehensive income for the three-month and six month periods ended June 30, 2026 and 2025, and separate interim statements of changes in equity and cash flows for the six-month periods ended June 30, 2026 and 2025, 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 separate interim financial statements in accordance with International Financial Reporting Standards as adopted by the Republic of Korea (Korean IFRS) 1034 Interim Financial Reporting, and for such internal control as management determines is necessary to enable the preparation of condensed separate interim financial statements that are free from material misstatement, whether due to fraud or error.

Auditor’s Responsibility

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

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

Conclusion

Based on our review, nothing has come to our attention that causes us to believe the accompanying condensed separate interim financial statements are not prepared, in all material respects, in accordance with Korean IFRS 1034 Interim Financial Reporting.

 

1

 

www.samil.com		Samil PricewaterhouseCoopers, 100 Hangang-daero, Yongsan-gu, Seoul 04386, Korea

Other Matters

We have audited the separate statement of financial position of the Company as at December 31, 2025, and the related separate 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 6, 2026. The separate statement of financial position as at December 31, 2025, presented herein for comparative purposes, is consistent, in all material respects, with the above audited statement of financial position as at December 31, 2025.

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

August 14, 2026

 

This report is effective as of August  14, 2026, the review report date. Certain subsequent events or circumstances, which may occur between the review report date and the time of reading this report, could have a material impact on the accompanying condensed separate interim financial statements and notes thereto. Accordingly, the readers of the review report should understand that there is a possibility that the above review report may have to be revised to reflect the impact of such subsequent events or circumstances, if any.

 

2

KB Financial Group Inc.

Separate Interim Statements of Financial Position

June 30, 2026 and December 31, 2025

(In millions of Korean won)

 

		Notes				June 30, 2026 (Unaudited)				December 31, 2025
Assets
Cash and due from financial institutions			4,5,6,22			W	482,142			W	974,585
Financial assets at fair value through profit or loss			4,5,7				984,897				1,251,607
Loans measured at amortized cost			4,5,8				349,112				349,112
Investments in subsidiaries			9				27,867,817				26,867,817
Property and equipment							4,240				2,896
Intangible assets							12,559				13,207
Net defined benefit assets			12				2,703				3,058
Deferred income tax assets			10				14,283				9,354
Other assets			4,5				887,119				1,381,504
Total assets						W	30,604,872			W	30,853,140
Liabilities
Debentures			4,5,11				5,509,479				4,520,297
Current income tax liabilities							372,894				544,056
Other liabilities			4,5				544,593				853,551
Total liabilities							6,426,966				5,917,904
Equity			13
Share capital							2,090,558				2,090,558
Hybrid securities							4,206,589				4,359,256
Capital surplus							7,247,126				14,751,591
Accumulated other comprehensive loss							(8,196	)			(8,601	)
Retained earnings							10,817,843				5,643,970
Treasury shares							(176,014	)			(1,901,538	)
Total equity							24,177,906				24,935,236
Total liabilities and equity						W	30,604,872			W	30,853,140

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

 

3

KB Financial Group Inc.

Separate Interim Statements of Comprehensive Income

Three-Month and Six-Month Periods Ended June 30, 2026 and 2025

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

 

		Notes				2026 (Unaudited)								2025 (Unaudited)
						Three months				Six months				Three months				Six months
Interest income						W	5,398			W	12,530			W	10,549			W	16,076
Interest income from financial instruments at amortized cost							4,380				10,516				9,533				14,218
Interest income from financial instruments at fair value through profit or loss							1,018				2,014				1,016				1,858
Interest expense							(36,167	)			(69,573	)			(30,214	)			(58,905	)
Net interest expense			15				(30,769	)			(57,043	)			(19,665	)			(42,829	)
Fee and commission income							513				984				518				990
Fee and commission expense							(4,170	)			(5,791	)			(2,071	)			(4,333	)
Net fee and commission expense			16				(3,657	)			(4,807	)			(1,553	)			(3,343	)
Net gains on financial instruments at fair value through profit or loss			17				9,748				17,222				22,461				47,912
Net other operating income			18				100,000				1,365,231				—				2,355,586
General and administrative expenses			19				(28,252	)			(57,483	)			(28,165	)			(50,333	)
Operating income (expense) before provision for credit losses							47,070				1,263,120				(26,922	)			2,306,993
Provision for credit losses							(7	)			(6	)			(7	)			(6	)
Net operating income (expense)							47,063				1,263,114				(26,929	)			2,306,987
Net non-operating income (expense)							106				596				(174	)			(107	)
Profit (loss) before tax							47,169				1,263,710				(27,103	)			2,306,880
Income tax benefit (expense)			20				5,023				5,650				809				(6,581	)
Profit (loss) for the period							52,192				1,269,360				(26,294	)			2,300,299
Items that will not be reclassified to profit or loss:
Remeasurements of net defined benefit liabilities							467				405				36				25
Other comprehensive income for the period, net of tax							467				405				36				25
Total comprehensive income (expense) for the period						W	52,659			W	1,269,765			W	(26,258	)		W	2,300,324
Earnings per share			21
Basic earnings per share						W	29			W	3,322			W	(219	)		W	5,954
Diluted earnings per share							29				3,296				(217	)			5,900

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

 

4

KB Financial Group Inc.

Separate Interim Statements of Changes in Equity

Six-Month Periods Ended June 30, 2026 and 2025

(In millions of Korean won)

 

		Share capital				Hybrid securities				Capital surplus				Accumulated other comprehensive income				Retained earnings				Treasury shares				Total equity
Balance as of January 1, 2025		W	2,090,558			W	5,082,359			W	14,754,475			W	(8,316	)		W	4,305,542			W	(1,236,060	)		W	24,988,558
Comprehensive income for the period
Profit for the period			—				—				—				—				2,300,299				—				2,300,299
Remeasurements of net defined benefit liabilities			—				—				—				25				—				—				25
Total comprehensive income for the period			—				—				—				25				2,300,299				—				2,300,324
Transactions with shareholders
Annual dividends			—				—				—				—				(298,285	)			—				(298,285	)
Quarterly dividends			—				—				—				—				(334,339	)			—				(334,339	)
Acquisition of treasury shares			—				—				—				—				—				(820,000	)			(820,000	)
Retirement of treasury shares			—				—				—				—				(814,522	)			814,522				—
Issuance of hybrid securities			—				404,013				—				—				—				—				404,013
Redemption of hybrid securities			—				(324,099	)			—				—				—				—				(324,099	)
Dividends on hybrid securities			—				—				—				—				(103,317	)			—				(103,317	)
Others			—				—				(901	)			—				—				—				(901	)
Total transactions with shareholders			—				79,914				(901	)			—				(1,550,463	)			(5,478	)			(1,476,928	)
Balance as of June 30, 2025 (Unaudited)		W	2,090,558			W	5,162,273			W	14,753,574			W	(8,291	)		W	5,055,378			W	(1,241,538	)		W	25,811,954
Balance as of January 1, 2026		W	2,090,558			W	4,359,256			W	14,751,591			W	(8,601	)		W	5,643,970			W	(1,901,538	)		W	24,935,236
Comprehensive income for the period
Profit for the period			—				—				—				—				1,269,360				—				1,269,360
Remeasurements of net defined benefit liabilities			—				—				—				405				—				—				405
Total comprehensive income for the period			—				—				—				405				1,269,360				—				1,269,765
Transactions with shareholders
Annual dividends			—				—				—				—				(573,768	)			—				(573,768	)
Quarterly dividends			—				—				—				—				(405,088	)			—				(405,088	)
Acquisition of treasury shares			—				—				—				—				—				(804,294	)			(804,294	)
Retirement of treasury shares			—				—				—				—				(2,529,818	)			2,529,818				—
Issuance of hybrid securities			—				431,952				—				—				—				—				431,952
Redemption of hybrid securities			—				(584,619	)			—				—				—				—				(584,619	)
Dividends on hybrid securities			—				—				—				—				(86,813	)			—				(86,813	)
Transfer to retained earnings			—				—				(7,500,000	)			—				7,500,000				—				—
Others			—				—				(4,465	)			—				—				—				(4,465	)
Total transactions with shareholders			—				(152,667	)			(7,504,465	)			—				3,904,513				1,725,524				(2,027,095	)
Balance as of June 30, 2026 (Unaudited)		W	2,090,558				4,206,589				7,247,126				(8,196	)			10,817,843				(176,014	)			24,177,906

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

 

5

KB Financial Group Inc.

Separate Interim Statements of Cash Flows

Six-Month Periods Ended June 30, 2026 and 2025

(In millions of Korean won)

 

		Notes				2026 (Unaudited)				2025 (Unaudited)
Cash flows from operating activities
Profit for the period						W	1,269,360			W	2,300,299
Adjustment for non-cash items
Depreciation and amortization expense							2,486				2,799
Provision for credit losses							6				6
Share-based payments							11,774				10,651
Net interest expense							2,333				11,233
Losses (gains) from changes in fair value of financial assets at fair value through profit or loss							13,775				(13,012	)
Losses on redemption of financial assets at fair value through profit or loss							3,601				—
Net other expense							855				804
							34,830				12,481
Changes in operating assets and liabilities
Deferred income tax assets							(5,082	)			2,682
Other assets							902,902				531,368
Other liabilities							(901,303	)			(527,905	)
							(3,483	)			6,145
Cash flows from operating activities							1,300,707				2,318,925
Cash flows used in investing activities
Acquisition of financial assets at fair value through profit or loss							—				(600,029	)
Disposal of financial assets at fair value through profit of loss							150,272				500,000
Redemption of financial assets at fair value through profit of loss							100,000				—
Acquisition of subsidiaries							(1,000,000	)			—
Acquisition of property and equipment							(1,153	)			(738	)
Acquisition of intangible assets							(615	)			(438	)
Disposal of intangible assets							61				109
Net decrease (increase) in guarantee deposits paid							(5,243	)			3,646
Cash flows used in investing activities							(756,678	)			(97,450	)
Cash flows used in financing activities
Increase in borrowings							750,000				—
Decrease in borrowings							(750,000	)			(765,000	)
Increase in debentures							1,297,780				1,477,332
Decrease in debentures							(310,000	)			(580,000	)
Redemption of principal of lease liabilities							(281	)			(292	)
Dividends paid to shareholders							(978,856	)			(632,624	)
Acquisition of treasury shares							(804,294	)			(820,000	)
Issuance of hybrid securities							431,952				404,013
Redemption of hybrid securities							(586,000	)			(325,000	)
Dividends paid on hybrid securities							(86,813	)			(103,317	)
Others							40				32
Cash flows used in financing activities							(1,036,472	)			(1,344,856	)
Net increase (decrease) in cash and cash equivalents							(492,443	)			876,619
Cash and cash equivalents at the beginning of the period			22				974,582				318,388
Cash and cash equivalents at the end of the period			22			W	482,139			W	1,195,007

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

 

6

KB Financial Group Inc.

Notes to the Separate Interim Financial Statements

June 30, 2026 and 2025 (Unaudited), and December 31, 2025

1. The Company

KB Financial Group Inc. (the “Company”), in accordance with the Financial Holding Companies Act, was established on September 29, 2008, through stock transfers with the former shareholders of Kookmin Bank, KB Investment & Securities Co., Ltd., KB Asset Management Co., Ltd., KB Real Estate Trust Co., Ltd., KB Investment Co., Ltd., KB Futures Co., Ltd., KB Credit Information Co., Ltd., and KB Data Systems Co., Ltd., and the Company’s main business purpose is to control subsidiaries that engage in the financial business or subsidiaries closely related to the financial business through the stock ownership. The headquarter is located at 26, Gukjegeumyung-ro 8-gil, Yeongdeungpo-gu, Seoul. The Company’s share capital as of June 30, 2026, is W 2,090,558 million. In 2011, Kookmin Bank spun off its credit card business segment and established a new separate credit card company, KB Kookmin Card Co., Ltd., and KB Investment & Securities Co., Ltd. merged with KB Futures Co., Ltd. The Company established KB Savings Bank Co., Ltd. in January 2012, acquired Yehansoul Savings Bank Co., Ltd. in September 2013, and KB Savings Bank Co., Ltd. merged with Yehansoul Savings Bank Co., Ltd. in January 2014. In March 2014, the Company acquired Woori Financial Co., Ltd. and changed its name to KB Capital Co., Ltd. Meanwhile, the Company included LIG Insurance Co., Ltd. as an associate and changed its name to KB Insurance Co., Ltd. in June 2015, and KB Insurance Co., Ltd. became one of the subsidiaries through a tender offer in May 2017. Also, the Company included Hyundai Securities Co., Ltd. as an associate in June 2016 and included it as a subsidiary in October 2016 by comprehensive exchange of shares. Hyundai Securities Co., Ltd. merged with KB Investment & Securities Co., Ltd. in December 2016 and changed its name to KB Securities Co., Ltd. in January 2017. In August 2020, the Company and subsidiaries (the “Group”) acquired Prudential Life Insurance Company of Korea Ltd. which was classified as a subsidiary and the name was changed to KB Life Insurance Co., Ltd. in December 2022. Then in January 2023, it merged with another existing KB Life Insurance Co., Ltd. The Company sold 100% of the shares of KB Credit Information Co., Ltd. to KB Kookmin Card Co., Ltd. on June 30, 2023.

The Company has been listed on the Korea Exchange (“KRX”) since October 10, 2008, and on the New York Stock Exchange (“NYSE”) for its American Depositary Shares (“ADS”) since September 29, 2008. The number of shares authorized in its Articles of Incorporation is 1,000 million.

2. Basis of Preparation

2.1 Application of Korean IFRS

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

The separate financial statements of the Company have been prepared in accordance with Korean IFRS. Korean IFRS are the standards and related interpretations issued by the International Accounting Standards Board (“IASB”) that have been adopted by the Republic of Korea.

The preparation of separate financial statements requires the use of certain critical accounting estimates. Management also needs to exercise judgment in applying the Company’s accounting policies. The areas that require more complex and higher level of judgment or areas that require significant assumptions and estimates are disclosed in Note 2.4.

The separate financial statements have been prepared in accordance with Korean IFRS No.1027 Separate Financial Statements.

 

7

KB Financial Group Inc.

Notes to the Separate Interim Financial Statements

June 30, 2026 and 2025 (Unaudited), and December 31, 2025

 

2.1 Application of Korean IFRS (cont’d)

 

The Company’s condensed separate interim financial statements for the six-month period ended June 30, 2026, have been prepared in accordance with Korean IFRS No.1034 Interim Financial Reporting and contain less information than is required in annual separate financial statements. Selected explanatory notes include descriptions of transactions or events that are significant in understanding changes in the financial position and financial performance of the Company since the end of the previous annual reporting period. These separate interim financial statements have been prepared in accordance with Korean IFRS that is effective or early adopted as of June 30, 2026.

2.1.1 The Company has applied the following standards and amendments for the first time for their annual reporting period commencing January 1, 2026.

 

-

Amendments to Korean IFRS No.1109 Financial Instruments, Korean IFRS No.1107 Financial Instruments: Disclosures

Korean IFRS No.1109 Financial Instruments and Korean IFRS No.1107 Financial Instruments: Disclosures have been amended to respond to recent questions arising in practice, and to include new requirements. These amendments do not have a significant impact on the financial statements. These amendments:

 

-

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 of impact on the entity and the extent to which the entity is exposed for each type of financial instruments if the timing or amount of contractual cash flow changes due to amendment of contract term; and

 

-

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

 

-

Annual Improvements to Korean IFRS—Volume 11

Annual Improvements to Korean IFRS - Volume 11 should be applied for annual 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 and implementation guidance

 

•

Korean IFRS No.1109 Financial Instruments: Derecognition of lease liabilities and definition of transaction price

 

•

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

 

•

Korean IFRS No.1007 Statement of Cash Flows: Cost method

 

8

KB Financial Group Inc.

Notes to the Separate Interim Financial Statements

June 30, 2026 and 2025 (Unaudited), and December 31, 2025

 

2.1.2 The following are the accounting standards that have been issued but were not mandatory for annual reporting periods ending on December 31, 2026.

 

-

Korean IFRS No.1118 Presentation and Disclosures in Financial Statements

Korean IFRS No.1118 “Presentation and Disclosure in Financial Statements” replaces Korean IFRS No.1001 “Presentation of Financial Statements.” Korean IFRS No.1118 is expected to enhance the comparability of financial performance among similar entities by providing users with more useful information for analyzing and comparing an entity’s performance based on the income statement.

When the Company prepares its financial statements by applying Korean IFRS No.1118, the following material accounting policies are expected to result in significant differences compared to the current financial statements. These items do not include all potential differences and may be subject to change based on further analysis.

 

•

Changes in the presentation of the income statement

Korean IFRS No.1118 requires all income and expenses included in the statement of profit or loss to be classified into one of five categories: operating, investing, financing, income taxes, and discontinued operations. The Standard classifies all income and expenses not attributable to the investing, financing, income tax, or discontinued operations categories as operating and defines operating profit or loss as a residual measure. The Company is required to assess its main business activities in determining the classification of income and expenses. Where the Company’s main business activities include investing in a particular type of asset or providing financing to customers, certain income and expenses that would otherwise be classified as investing or financing are classified as operating. Accordingly, operating profit or loss determined under Korean IFRS No.1118 may differ significantly from that determined under Korean IFRS No.1001.The Standard requires the disclosure, in the notes, of operating profit or loss determined in accordance with Korean IFRS No.1001, as well as a reconciliation between operating profit or loss under Korean IFRS No.1118 and that determined in accordance with Korean IFRS No.1001.

In addition, Korean IFRS No.1118 requires the presentation in the statement of profit or loss of “operating profit or loss,” comprising all income and expenses classified in the operating category; “profit or loss before financing and income taxes,” comprising operating profit or loss and all income and expenses classified in the investing category; and “profit or loss.” However, where the Company’s main business activities include providing financing to customers, the presentation of “profit or loss before financing and income taxes” may not be required, depending on the accounting policy applied.

 

•

Introduction of disclosure of management-defined performance measures

Korean IFRS No.1118 introduces new disclosure requirements for management-defined performance measures (MPMs). MPMs are defined as subtotals of income and expenses that are not specified in paragraph 118 of the Standard and are not otherwise required to be presented or disclosed under Korean IFRS. These measures are used by an entity in public communications outside the financial statements and are intended to communicate management’s view of the entity’s financial performance to users of the financial statements.

When the Company reports MPMs, it is required to disclose the reasons why such measures provide useful information, how those measures are calculated, and a reconciliation between those measures and the most directly comparable subtotal specified in Korean IFRS No.1118. In addition, the Company is required to disclose the income tax effects and the effects on non-controlling interests for each reconciling item.

 

•

Changes in classification of cash flows

Consequential amendments have been made to Korean IFRS No.1007 “Statement of Cash Flows” following the issuance of Korean IFRS No.1118. Under these amendments, the starting point for determining cash flows from operating activities using the indirect method has been changed from profit or loss to operating profit or loss, and the accounting policy choice for the classification of interest and dividends has been eliminated.

 

9

KB Financial Group Inc.

Notes to the Separate Interim Financial Statements

June 30, 2026 and 2025 (Unaudited), and December 31, 2025

 

Korean IFRS No.1118 is effective for annual reporting periods beginning on or after January 1, 2027, with early adoption permitted. In accordance with Korean IFRS No.1008 “Accounting Policies, Changes in Accounting Estimates and Errors,” the Standard is required to be applied retrospectively, and accordingly, the comparative information for the year ending December 31, 2026 will be restated. The amendments to Korean IFRS No.1007 and No.1033, as well as the revised Korean IFRS No.1008 and No.1107 resulting from the issuance of Korean IFRS No.1118, are effective when Korean IFRS No.1118 is applied.

As the mandatory effective date of Korean IFRS No.1118 has not yet been reached, the Company has not applied the Standard and plans to present its first interim financial statements for the period ending March 31, 2027 in accordance with Korean IFRS No.1118. Based on the information available as of June 30, 2026, the Company is in the process of assessing the financial impact of adopting Korean IFRS No.1118, establishing accounting policies, and implementing changes to its accounting systems, and is performing a preliminary overall assessment of the impact of applying the Standard.

2.2 Measurement Basis

The separate financial statements have been prepared under the historical cost convention unless otherwise specified.

2.3 Functional and Presentation Currency

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

2.4 Critical Accounting Estimates

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

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

Uncertainties in estimates and assumptions with significant risks used in the preparation of these condensed separate interim financial statements are the same as 2025 financial statements, except for the method of estimating income tax expense.

 

10

KB Financial Group Inc.

Notes to the Separate Interim Financial Statements

June 30, 2026 and 2025 (Unaudited), and December 31, 2025

 

3. Material Accounting Policies

The material accounting policies and calculation methods applied in the preparation of these condensed separate interim financial statements are the same as those applied to the separate financial statements for the year ended December 31, 2025, except for the impact of changes due to adopting new and amended standards and interpretations, as described in Note 2.1 and below paragraph.

The Company is subject to Pillar 2 income taxes, and has applied the 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 by applying the expected average annual income tax rate applicable on expected total annual income.

 

11

KB Financial Group Inc.

Notes to the Separate Interim Financial Statements

June 30, 2026 and 2025 (Unaudited), and December 31, 2025

 

4. Financial Risk Management

4.1 Summary

4.1.1 Overview of financial risk management policy

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

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

The Company’s risk management system focuses on efficiently supporting long-term strategy and management decisions of the Company by increasing risk transparency, preventing risk transfer between subsidiaries and preemptive response to rapidly changing financial environments. Credit risk, market risk, liquidity risk, operational risk, interest rate risk, insurance risk, credit concentration risk, strategy risk, reputation risk, and foreign exchange settlement risk are recognized as significant risks.

4.1.2 Risk management organization

4.1.2.1 Risk Management Committee

The Risk Management Committee, as the ultimate decision-making body, establishes risk management strategies in accordance with the strategic direction determined by the Board of Directors, determining the affordable level of risk appetite, reviewing the level of risk and the status of risk management activities, approving the application of risk management systems, methodologies, and major improvements, and establishing and approving risk management policies and procedures to timely recognize, measure, monitor, and control risks arising from various transactions by the Company and subsidiaries (the “Group”).

4.1.2.2 Risk Management Council

The Risk Management Council discusses matters delegated by the Risk Management Committee and matters referred for review by the Group Management Committee, as well as detailing matters relating to the implementation of the risk management strategies and procedures established by the Risk Management Committee for each affiliate, monitoring the Group’s risk management status, and establishing and implementing necessary measures.

4.1.2.3 Risk Management Department

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

 

12

KB Financial Group Inc.

Notes to the Separate Interim Financial Statements

June 30, 2026 and 2025 (Unaudited), and December 31, 2025

 

4.2 Credit Risk

4.2.1 Overview of credit risk

Credit risk is the risk of loss from a portfolio of assets held due to a counterparty’s default, breach of contract, and deterioration in credit quality. For risk management purposes, the Company considers the default risk of individual borrowers.

4.2.2 Credit risk management

The Company measures the expected losses on assets subject to credit risk management and uses them as a management indicator.

4.2.3 Maximum exposure to credit risk

The Company’s maximum exposures to credit risk without consideration of collateral values in relation to financial instruments other than equity securities as of June 30, 2026 and December 31, 2025, are as follows:

 

(In millions of Korean won)		June 30, 2026				December 31, 2025
Due from financial institutions		W	482,142			W	974,585
Loans measured at amortized cost *			349,112				349,112
Loans measured at fair value through profit or loss			52,390				54,502
Other financial assets *			60,086				46,688
		W943,730				W 1,424,887

 

*	After netting of allowance

4.2.4 Credit risk of loans

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

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

 

13

KB Financial Group Inc.

Notes to the Separate Interim Financial Statements

June 30, 2026 and 2025 (Unaudited), and December 31, 2025

 

4.2.4 Credit risk of loans (cont’d)

Credit qualities of loans measured at amortized cost as of June 30, 2026 and December 31 2025, are classified as follows:

(In millions of Korean won)

 

		June 30, 2026
		12-month expected credit losses				Lifetime expected credit losses								Not applying expected credit losses				Total
						Not impaired				Impaired
Loans measured at amortized cost *
Corporate
Grade 1		W	350,000			W	—			W	—			W	—			W	350,000
Grade 2			—				—				—				—				—
Grade 3			—				—				—				—				—
Grade 4			—				—				—				—				—
Grade 5			—				—				—				—				—
		W	350,000			W	—			W	—			W	—			W	350,000

(In millions of Korean won)

 

		December 31, 2025
		12-month expected credit losses				Lifetime expected credit losses								Not applying expected credit losses				Total
						Not impaired				Impaired
Loans measured at amortized cost *
Corporate
Grade 1		W	350,000			W	—			W	—			W	—			W	350,000
Grade 2			—				—				—				—				—
Grade 3			—				—				—				—				—
Grade 4			—				—				—				—				—
Grade 5			—				—				—				—				—
		W	350,000			W	—			W	—			W	—			W	350,000

 

*	Before netting of allowance

Credit qualities of loans graded according to the probability of default as of June 30, 2026 and December 31 2025, are as follows:

 

		Range of probability of default (%)
Grade 1		0.0 ~ 1.0
Grade 2		1.0 ~ 5.0
Grade 3		5.0 ~ 15.0
Grade 4		15.0 ~ 30.0
Grade 5		30.0 ~

 

14

KB Financial Group Inc.

Notes to the Separate Interim Financial Statements

June 30, 2026 and 2025 (Unaudited), and December 31, 2025

 

4.2.5 Credit risk of due from financial institutions

Credit qualities of due from financial institutions as of June 30, 2026, and December 31, 2025, are as follows:

(In millions of Korean won)

 

		June 30, 2026
		12-month expected credit losses				Lifetime expected credit losses								Not applying expected credit losses				Total
						Not impaired				Impaired
Due from financial institutions measured at amortized cost
Grade 1		W	482,142			W	—			W	—			W	—			W	482,142
Grade 2			—				—				—				—				—
Grade 3			—				—				—				—				—
Grade 4			—				—				—				—				—
Grade 5			—				—				—				—				—
		W	482,142			W	—			W	—			W	—			W	482,142

(In millions of Korean won)

 

		December 31, 2025
		12-month expected credit losses				Lifetime expected credit losses								Not applying expected credit losses				Total
						Not impaired				Impaired
Due from financial institutions measured at amortized cost
Grade 1		W	974,585			W	—			W	—			W	—			W	974,585
Grade 2			—				—				—				—				—
Grade 3			—				—				—				—				—
Grade 4			—				—				—				—				—
Grade 5			—				—				—				—				—
		W	974,585			W	—			W	—			W	—			W	974,585

 

15

KB Financial Group Inc.

Notes to the Separate Interim Financial Statements

June 30, 2026 and 2025 (Unaudited), and December 31, 2025

 

4.2.6 Credit risk concentration analysis

4.2.6.1 Classifications of corporate loans by industry as of June 30, 2026, and December 31, 2025, are as follows:

 

(In millions of Korean won)		June 30, 2026
		Corporate loans *								%				Allowances								Carrying amount
Financial institutions		W					402,390				100.00			W					(888	)		W					401,502

 

(In millions of Korean won)		December 31, 2025
		Corporate loans *								%				Allowances								Carrying amount
Financial institutions		W					404,502				100.00			W					(888	)		W					403,614

 

*	Amount includes loans measured at fair value through profit or loss and amortized cost.

4.2.6.2 Classifications of due from financial institutions by industry as of June 30, 2026, and December 31 2025, are as follows:

 

(In millions of Korean won)

June 30, 2026

Amount

%

Allowances

Carrying amount

Due from financial institutions measured at amortized cost

Financial institutions

W

482,142

100.00

W

—

W

482,142

 

(In millions of Korean won)

December 31, 2025

Amount

%

Allowances

Carrying amount

Due from financial institutions measured at amortized cost

Financial institutions

W

974,585

100.00

W

—

W

974,585

 

16

KB Financial Group Inc.

Notes to the Separate Interim Financial Statements

June 30, 2026 and 2025 (Unaudited), and December 31, 2025

 

4.3 Liquidity Risk

 

4.3.1 Overview of liquidity risk

Liquidity risk refers to the risk that the Company may face insolvency due to a shortage of funds arising from mismatches in the timing of fund procurement and utilization or unexpected cash outflows, or may incur losses through obtaining high-interest borrowings or disposing of held assets on unfavorable terms in order to resolve such funding shortages. The Company manages its liquidity risk through analysis of the contractual maturity of all financial assets and liabilities and discloses in six categories such as on demand, less than one month, between one month to three months, between three months to one year, between one year to five years, and over five years.

4.3.2. Liquidity risk management

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

4.3.3. Analysis of remaining contractual maturity of financial liabilities

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

Remaining contractual maturity of financial liabilities as of June 30, 2026 and December 31, 2025, are as follows:

(In millions of Korean won)

 

		June 30, 2026
		On Demand				Up to 1 month				1-3 months				3-12 months				1-5 years				Over 5 years				Total
Financial liabilities
Debentures		W	—			W	96,097			W	144,034			W	1,031,960			W	4,492,356			W	131,717			W	5,896,164
Lease liabilities			—				62				102				401				400				—				965
Other financial liabilities			—				14,026				—				16,319				—				—				30,345
		W	—			W	110,185			W	144,136			W	1,048,680			W	4,492,756			W	131,717			W	5,927,474

(In millions of Korean won)

 

		December 31, 2025
		On Demand				Up to 1 month				1-3 months				3-12 months				1-5 years				Over 5 years				Total
Financial liabilities
Debentures		W	—			W	41,812			W	17,285			W	783,422			W	3,736,418			W	234,604			W	4,813,541
Lease liabilities			—				51				89				365				258				—				763
Other financial liabilities			—				2,041				508				—				—				—				2,549
		W	—			W	43,904			W	17,882			W	783,787			W	3,736,676			W	234,604			W	4,816,853

 

17

KB Financial Group Inc.

Notes to the Separate Interim Financial Statements

June 30, 2026 and 2025 (Unaudited), and December 31, 2025

 

4.4 Market Risk

4.4.1 Concept

Market risk refers to the risk of loss arising from fluctuations in market factors such as interest rates, stock prices, and exchange rates. The Company manages market risk separately for those arising from the trading position and those arising from the non-trading position.

4.4.2 Trading position

In accordance with Financial Holding Companies Act, the Company’s main business is to control financial companies or companies closely related to the financial service. And the Company cannot perform any other business other than managing activities as a holding company, therefore there is no risk of trading position.

4.4.3 Non-trading position

Non-trading position refers to the part except trading position, and the main risk the Company is managing is interest rate risk.

4.4.3.1 Interest rate risk

(a) Definition of interest rate risk

Interest rate risk refers to the risk of changes in the value (fair value) of the items in the statement of financial position due to changes in interest rate and the risk of changes in cash flows related to interest income and interest expense arising from investment and financing activities.

(b) Observation method and management indicator on interest rate risk

The main objective of interest rate risk management is to protect the value changes from interest rate fluctuations. The Company uses the Interest Rate Risk in the Banking Book (“IRRBB”) standard methodology required for disclosure to measure interest rate risk.

 

18

KB Financial Group Inc.

Notes to the Separate Interim Financial Statements

June 30, 2026 and 2025 (Unaudited), and December 31, 2025

 

5. Financial Assets and Financial Liabilities

5.1 Classification and Fair Value of Financial Instruments

5.1.1 Carrying amount and fair value of financial assets and liabilities by category as of June 30, 2026 and December 31, 2025, are as follows:

 

(In millions of Korean won)		June 30, 2026
		Carrying amount				Fair value
Financial assets
Financial assets at fair value through profit or loss
Hybrid securities		W	932,507			W	932,507
Loans			52,390				52,390
Financial assets at amortized cost
Due from financial institutions			482,142				482,142
Loans			349,112				349,112
Other financial assets			60,086				60,086
		W	1,876,237			W	1,876,237
Financial liabilities
Financial liabilities at amortized cost
Debentures		W	5,509,479			W	5,386,076
Other financial liabilities			50,252				50,252
		W	5,559,731			W	5,436,328
(In millions of Korean won)		December 31, 2025
		Carrying amount				Fair value
Financial assets
Financial assets at fair value through profit or loss
Hybrid securities		W	1,197,105			W	1,197,105
Loans			54,502				54,502
Financial assets at amortized cost
Due from financial institutions			974,585				974,585
Loans			349,112				349,112
Other financial assets			46,688				46,688
		W	2,621,992			W	2,621,992
Financial liabilities
Financial liabilities at amortized cost
Debentures		W	4,520,297			W	4,460,116
Other financial liabilities			18,220				18,220
		W	4,538,517			W	4,478,336

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

 

19