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6-K 1 d801852d6k.htm FORM 6-K Form 6-K Table of Contents

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

Form 6-K

REPORT OF FOREIGN PRIVATE ISSUER

PURSUANT TO RULE 13a-16 OR 15d-16

UNDER THE SECURITIES EXCHANGE ACT OF 1934

For the month of March 2024

Commission File Number: 000-53445

KB Financial Group Inc.

(Translation of registrant’s name into English)

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

(Address of principal executive office)

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

Form 20-F ☒ Form 40-F ☐

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Audit Report of KB Securities Co., Ltd. for Fiscal Year 2023

On March 6, 2024, KB Financial Group Inc. disclosed audit reports of KB Securities Co., Ltd. (“KB Securities”), its wholly-owned subsidiary, for fiscal year 2023 based on the International Financial Reporting Standards as adopted by the Republic of Korea (including the consolidated and separate financial statements of KB Securities as of and for the years ended December 31, 2023 and 2022 and related notes) received from Samil PricewaterhouseCoopers, its independent auditor. The financial statements in such reports have not been approved by the shareholders of KB Securities and remain subject to change.

KB Financial Group Inc. is furnishing the following documents as exhibits to this Form 6-K filing:


Exhibit 99.1:		An English-language translation of the Consolidated Audit Report of KB Securities for FY 2023.

Exhibit 99.2:		An English-language translation of the Separate Audit Report of KB Securities for FY 2023.

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SIGNATURES

Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized.


				KB Financial Group Inc.
				(Registrant)

Date: March 6, 2024				By: /s/ Jae Kwan Kim
				(Signature)

				Name: Jae Kwan Kim
				Title: Senior Executive Vice President and Chief Finance Officer

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Exhibit 99.1

KB SECURITIES CO., LTD.

and Subsidiaries

Consolidated Financial Statements

December 31, 2023 and 2022

(With Independent Auditor’s Report Thereon)

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KB SECURITIES CO., LTD. and Subsidiaries

Index

December 31, 2023 and 2022


	Page(s)

Independent Auditor’s Report		1~3

Consolidated Financial Statements

Consolidated Statements of Financial Position		4

Consolidated Statements of Profit or Loss		5

Consolidated Statements of Comprehensive Income		6

Consolidated Statements of Changes in Equity		7~8

Consolidated Statements of Cash Flows		9

Notes to the Consolidated Financial Statements		10~147

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Independent Auditor’s Report

(English Translation of a Report Originally Issued in Korean)

To the Board of Directors and Shareholders of KB Securities Co., Ltd.

Opinion

We have audited the accompanying consolidated financial statements of KB Securities Co., Ltd. and its subsidiaries (collectively referred to as the “Group”) which comprise the consolidated statement of financial position as at December 31, 2023, and the consolidated statement of profit or loss, consolidated statement of comprehensive income, consolidated statement of changes in equity and consolidated statement of cash flows for the year then ended, and notes to the consolidated financial statements, including material accounting policy information.

In our opinion, the accompanying consolidated financial statements present fairly, in all material respects, the consolidated financial position of KB Securities Co., Ltd. and its subsidiaries as at December 31, 2023, and its consolidated financial performance and its consolidated cash flows for the year then ended in accordance with International Financial Reporting Standards as adopted by the Republic of Korea (Korean IFRS).

Basis for Opinion

We conducted our audit in accordance with Korean Standards on Auditing. Our responsibilities under those standards are further described in the Auditor’s Responsibilities for the Audit of the Consolidated Financial Statements section of our report. We are independent of the Group in accordance with the ethical requirements of the Republic of Korea that are relevant to our audit of the consolidated financial statements and we have fulfilled our other ethical responsibilities in accordance with the ethical requirements. We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our audit opinion.

Other Matters

The consolidated financial statements of the Group for the year ended December 31, 2022, were audited by KPMG Samjong Accounting Corporation who expressed an unqualified opinion on those statements on March 7, 2023.

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

Responsibilities of Management and Those Charged with Governance for the Consolidated Financial Statements

Management is responsible for the preparation and fair presentation of the consolidated financial statements in accordance with Korean IFRS, and for such internal control as management determines is necessary to enable the preparation of consolidated financial statements that are free from material misstatement, whether due to fraud or error.

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In preparing the consolidated financial statements, management is responsible for assessing the Group’s ability to continue as a going concern, disclosing, as applicable, matters related to going concern and using the going concern basis of accounting unless management either intends to liquidate the Group or to cease operations.

Those charged with governance are responsible for overseeing the Group’s financial reporting process.

Auditor’s Responsibilities for the Audit of the Consolidated Financial Statements

Our objectives are to obtain reasonable assurance about whether the consolidated financial statements as a whole are free from material misstatement, whether due to fraud or error, and to issue an auditor’s report that includes our opinion. Reasonable assurance is a high level of assurance, but is not a guarantee that an audit conducted in accordance with Korean Standards on Auditing will always detect a material misstatement when it exists. Misstatements can arise from fraud or error and are considered material if, individually or in the aggregate, they could reasonably be expected to influence the economic decisions of users taken on the basis of these consolidated financial statements.

As part of an audit in accordance with Korean Standards on Auditing, we exercise professional judgment and maintain professional skepticism throughout the audit. We also:

•

Identify and assess the risks of material misstatement of the consolidated financial statements, whether due to fraud or error, design and perform audit procedures responsive to those risks, and obtain audit evidence that is sufficient and appropriate to provide a basis for our opinion. The risk of not detecting a material misstatement resulting from fraud is higher than for one resulting from error, as fraud may involve collusion, forgery, intentional omissions, misrepresentations, or the override of internal control.

•

Obtain an understanding of internal control relevant to the audit in order to design audit procedures that are appropriate in the circumstances, but not for the purpose of expressing an opinion on the effectiveness of the entity’s internal control.

•

Evaluate the appropriateness of accounting policies used and the reasonableness of accounting estimates and related disclosures made by management.

•

Conclude on the appropriateness of management’s use of the going concern basis of accounting and, based on the audit evidence obtained, whether a material uncertainty exists related to events or conditions that may cast significant doubt on the Group’s ability to continue as a going concern. If we conclude that a material uncertainty exists, we are required to draw attention in our auditor’s report to the related disclosures in the consolidated financial statements or, if such disclosures are inadequate, to modify our opinion. Our conclusions are based on the audit evidence obtained up to the date of our auditor’s report. However, future events or conditions may cause the Group to cease to continue as a going concern.

•

Evaluate the overall presentation, structure and content of the consolidated financial statements, including the disclosures, and whether the consolidated financial statements represent the underlying transactions and events in a manner that achieves fair presentation.

•

Obtain sufficient appropriate audit evidence regarding the financial information of the entities or business activities within the Group to express an opinion on the consolidated financial statements. We are responsible for the direction, supervision and performance of the Group audit. We remain solely responsible for our audit opinion.

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We communicate with those charged with governance regarding, among other matters, the planned scope and timing of the audit and significant audit findings, including any significant deficiencies in internal control that we identify during our audit.

/s/ Samil PricewaterhouseCoopers

Seoul, Korea

March 6, 2024

This report is effective as of March 6, 2024, the audit report date. Certain subsequent events or circumstances, which may occur between the audit report date and the time of reading this report, could have a material impact on the accompanying consolidated financial statements and notes thereto. Accordingly, the readers of the audit report should understand that there is a possibility that the above audit report may have to be revised to reflect the impact of such subsequent events or circumstances, if any.

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KB SECURITIES CO., LTD. and Subsidiaries

Consolidated Statements of Financial Position

December 31, 2023 and 2022


(in Korean won)	Notes		2023		2022
Assets
Cash and deposits		5,36,37,38		2,927,067,229,634		4,537,576,193,522
Financial assets at fair value through profit or loss		6,36,37,38		35,948,948,684,278		29,549,677,943,839
Derivative financial assets		7,36,37,38,39		1,138,492,891,097		1,724,310,257,882
Financial assets at fair value through other comprehensive income		8,36,37,38		5,134,512,868,551		4,800,554,237,532
Investments in associates		9		311,590,371,758		300,342,789,927
Financial assets measured at amortised cost		10,36,37,38,39		10,418,945,936,461		8,907,503,612,196
Property and equipment		11,40		255,140,828,549		270,030,366,596
Investment properties		12		616,922,347,428		560,420,145,484
Intangible assets		13		272,296,277,074		211,868,606,120
Current tax assets				12,562,733,171		9,152,521,243
Deferred tax assets		35		1,023,220,091		1,289,260,036
Other financial assets		14,36,37,38,39		4,072,941,183,368		2,687,932,513,517
Other assets		15		156,475,314,503		256,750,883,711

Total assets				61,266,919,885,963		53,817,409,331,605

Liabilities
Deposit liabilities		16,36,37,38		7,122,595,110,221		6,799,233,076,405
Financial liabilities at fair value through profit or loss		6,36,37,38,39		10,835,881,099,625		12,171,579,477,522
Derivative financial liabilities		7,36,37,38,39		1,816,172,470,767		2,322,476,090,220
Borrowings		17,36,37,38,39		30,640,156,334,629		23,523,195,867,589
Current tax liabilities				2,315,452,033		4,654,028,924
Net defined benefit liabilities		18		62,564,425,198		55,507,137,949
Deferred tax liabilities		35		11,913,920,671		58,351,713,528
Provisions		19,48		212,988,122,952		150,965,405,944
Other financial liabilities		20,36,37,38,39,40		3,894,408,699,725		2,389,541,471,052
Other liabilities		21		371,892,231,675		473,114,503,977

Total liabilities				54,970,887,867,496		47,948,618,773,110

Equity
Share capital		22		1,493,102,120,000		1,493,102,120,000
Hybrid securities		23		626,093,392,000		506,130,312,000
Other paid-in capital		24		1,478,687,978,420		1,478,687,978,420
Retained earnings		25		2,304,302,712,341		2,038,449,776,857
Other components of equity		26		322,497,946,084		323,302,638,251

Equity attributable to shareholders of the Parent Company				6,224.684,148,845		5,839,672,825,528
Non-controlling interest				71,347,869,622		29,117,732,967

Total equity				6,296,032,018,467		5,868,790,558,495

Total liabilities and equity				61,266,919,885,963		53,817,409,331,605

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

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KB SECURITIES CO., LTD. and Subsidiaries

Consolidated Statements of Profit or Loss

Years Ended December 31, 2023 and 2022


(in Korean won)	Notes		2023			2022
Operating income
Fee and commission income		27		946,466,679,740			939,703,781,530
Gain on valuation and disposal of financial instruments		28		7,721,803,264,977			10,675,519,816,357
Interest income		29		1,763,585,063,174			1,160,030,185,663
Interest income from financial instruments at FVTPL				810,712,741,938			543,218,721,819
Interest income in applying of effective interest rate				952,872,321,236			616,811,463,844
Gain on valuation and disposal of financial assets measured at amortised costs		30		8,985,668,089			8,462,529,335
Gain on foreign currency transactions		31		929,983,245,366			1,263,406,410,939
Other operating income		32		214,316,189,404			222,899,833,390

				11,585,140,110,750			14,270,022,557,214

Operating expenses
Fee and commission expense		27		239,341,389,849			194,467,365,522
Loss on valuation and disposal of financial instruments		28		7,488,880,324,414			11,053,322,410,655
Interest expense		29		1,148,794,249,725			618,109,328,244
Loss on valuation and disposal of financial assets measured at amortised costs		30		151,760,490,167			43,726,891,106
Loss on foreign currency transactions		31		874,317,352,206			1,265,719,846,490
Selling and administrative expenses		33		903,560,375,531			822,594,096,508
Other operating expenses		32		98,331,804,366			27,087,370,821

				10,904,985,986,258			14,025,027,309,346

Operating profit				680,154,124,492			244,995,247,868
Non-operating income		34		67,304,397,172			100,717,218,807
Non-operating expenses		34		254,697,064,046			83,385,613,616

Profit before income tax				492,761,457,618			262,326,853,059
Income tax expense		35		104,733,620,558			67,499,190,770

Profit for the year				388,027,837,060			194,827,662,289

Profit attributable to:
Shareholders of the Parent Company				395,015,482,840			193,697,356,041
Non-controlling interest				(6,987,645,780	)		1,130,306,248

The above consolidated statements of profit or loss should be read in conjunction with the accompanying notes.

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KB SECURITIES CO., LTD. and Subsidiaries

Consolidated Statements of Comprehensive Income

Years Ended December 31, 2023 and 2022


(in Korean won)	Notes		2023			2022
Profit for the year				388,027,837,060			194,827,662,289

Other comprehensive income(loss)
Items that will not be reclassified to profit or loss
Net gains on valuation of equity instruments at fair value through other comprehensive income		8,26		24,960,028,697			27,415,825,649
Fair value changes on financial liabilities designated at fair value due to own credit risk		6,26		(52,863,029,391	)		38,855,084,533
Remeasurements of the net defined benefit liabilities		18,26		(5,008,801,399	)		2,738,991,283
Revaluation of property and equipment		26		84,435,863			35,572,043,723
Items that may be subsequently reclassified to profit or loss
Net gains(losses) on valuation of debt instrument at fair value through other comprehensive income		8,26		30,951,147,161			(10,149,158,628	)
Share of other comprehensive income(loss) of associates		9,26		(4,014,207,534	)		(2,562,095,184	)
Gains(losses) on hedge of net investments in foreign operations		7,26		2,297,619,786			(5,750,385,868	)
Exchange difference on translation of foreign operations		26		3,393,879,961			24,454,947,631

Other comprehensive income for the year, net of tax				(198,926,856	)		110,575,253,139

Total comprehensive income for the year				387,828,910,204			305,402,915,428

Total comprehensive income for the year attributable to:
Shareholders of the Parent Company				394,210,790,673			305,090,051,043
Non-controlling interest				(6,381,880,469	)		312,864,385

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

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KB SECURITIES CO., LTD. and Subsidiaries

Consolidated Statements of Changes in Equity

Years Ended December 31, 2023 and 2022


	Attributable to the Shareholder of the Parent Company
	Share Capital		Hybrid Securities		Other Paid In Capital		Retained Earnings			Other Components of Equity			Other Comprehensive Income for the Disposal Group		Total			Non- controlling Interest			Total Equity
Balance at January 1, 2022		1,493,102,120,000		—		1,478,687,978,420		2,247,970,109,154			204,500,516,202			7,670,746,146		5,431,931,469,922			3,624,147,337			5,435,555,617,259
Issuance of hybrid securities		—		506,130,312,000		—		—			—			—		506,130,312,000			—			506,130,312,000
Dividends of hybrid securities		—		—		—		(3,479,007,437	)		—			—		(3,479,007,437	)		—			(3,479,007,437	)
Dividends		—		—		—		(400,000,000,000	)		—			—		(400,000,000,000	)		—			(400,000,000,000	)
Changes in ownership of subsidiaries		—		—		—		—			—			—		—			25,180,721,245			25,180,721,245
Revaluations of property and equipments		—		—		—		261,319,099			(261,319,099	)		—		—			—			—
Total comprehensive income
Profit for the year		—		—		—		193,697,356,041			—			—		193,697,356,041			1,130,306,248			194,827,662,289
Gains on equity instruments at fair value through other comprehensive income		—		—		—		—			17,266,667,021			—		17,266,667,021			—			17,266,667,021
Fair value changes on financial liabilities designated at fair value due to own credit risk		—		—		—		—			38,855,084,533			—		38,855,084,533			—			38,855,084,533
Share of other comprehensive income of associates		—		—		—		—			(2,562,095,184	)		—		(2,562,095,184	)		—			(2,562,095,184	)
Revaluation of property and equipment		—		—				—			35,572,043,723			—		35,572,043,723			—			35,572,043,723
Remeasurements of net defined benefit liabilities		—		—		—		—			2,738,991,283			—		2,738,991,283			—			2,738,991,283
Gains on hedge of net investments in foreign operations		—		—		—		—			(5,750,385,868	)		—		(5,750,385,868	)		—			(5,750,385,868	)
Exchange difference on translation of foreign operations		—		—		—		—			25,272,389,494			—		25,272,389,494			(817,441,863	)		24,454,947,631

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KB SECURITIES CO., LTD. and Subsidiaries

Consolidated Statements of Changes in Equity

Years Ended December 31, 2023 and 2022


Other
Other comprehensive income for the disposal group classified as held for sale	—	—	—	—		7,670,746,146		(7,670,746,146	)	—		—		—

Balance at December 31, 2022	1,493,102,120,000	506,130,312,000	1,478,687,978,420	2,038,449,776,857		323,302,638,251		—		5,839,672,825,528		29,117,732,967		5,868,790,558,495

Balance at January 1, 2023	1,493,102,120,000	506,130,312,000	1,478,687,978,420	2,038,449,776,857		323,302,638,251		—		5,839,672,825,528		29,117,732,967		5,868,790,558,495
Issuance of hybrid securities	—	119,963,080,000	—	—		—		—		119,963,080,000		—		119,963,080,000
Dividends of hybrid securities	—	—	—	(29,162,547,356	)	—		—		(29,162,547,356	)	—		(29,162,547,356	)
Dividends	—	—	—	(100,000,000,000	)	—		—		(100,000,000,000	)	—		(100,000,000,000	)
Changes in scope of consolidation	—	—	—	—		—		—		—		48,612,017,124		48,612,017,124
Total comprehensive income
Profit for the year	—	—	—	395,015,482,840		—		—		395,015,482,840		(6,987,645,780	)	388,027,837,060
Gains on equity instruments at fair value through other comprehensive income	—	—	—	—		55,911,175,858		—		55,911,175,858		—		55,911,175,858
Fair value changes on financial liabilities designated at fair value due to own credit risk	—	—	—	—		(52,863,029,391	)	—		(52,863,029,391	)	—		(52,863,029,391	)
Share of other comprehensive income of associates	—	—	—	—		(4,014,207,534	)	—		(4,014,207,534	)	—		(4,014,207,534	)
Revaluation of property and equipment	—	—		—		84,435,863		—		84,435,863		—		84,435,863
Remeasurements of net defined benefit liabilities	—	—	—	—		(5,008,801,399	)	—		(5,008,801,399	)	—		(5,008,801,399	)
Gains on hedge of net investments in foreign operations	—	—	—	—		2,297,619,786		—		2,297,619,786		—		2,297,619,786
Exchange difference on translation of foreign operations	—	—	—	—		2,788,114,650		—		2,788,114,650		605,765,311		3,393,879,961

Balance at December 31, 2023	1,493,102,120,000	626,093,392,000	1,478,687,978,420	2,304,302,712,341		322,497,946,084		—		6,224,684,148,845		71,347,869,622		6,296,032,018,467

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

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KB SECURITIES CO., LTD. and Subsidiaries

Consolidated Statements of Cash Flows

Years Ended December 31, 2023 and 2022


(in Korean won)	Notes	2023			2022
Cash flows from operating activities
Cash generated from operating activities
Profit for the year			388,027,837,060			194,827,662,289
Adjustment for non-cash items	43		(474,261,573,889	)		(572,686,798,061	)
Changes in operating assets and liabilities	43		(7,088,767,083,053	)		(1,834,957,050,037	)

			(7,175,000,819,882	)		(2,212,816,185,809	)
Interest received			1,660,160,712,396			1,260,692,425,883
Interest paid			(1,115,515,065,847	)		(562,087,561,759	)
Dividends received			63,458,130,553			55,836,918,623
Income taxes paid			(9,860,592,769	)		(204,765,128,344	)

Net cash used in operating activities			(6,576,757,635,549	)		(1,663,139,531,406	)

Cash flows from investing activities
Decrease in long-term deposit			509,078,880,335			485,107,462,569
Acquisition of financial assets at fair value through other comprehensive income			(5,625,833,675,953	)		(5,425,171,579,537	)
Disposal of financial assets at fair value through other comprehensive income			5,403,026,586,760			4,476,887,646,352
Acquisition of investments of associates	9		(40,467,286,821	)		(208,688,630,790	)
Disposal of investment of associates	9		15,007,418,594			42,822,194,202
Net cash flows from the acquisition of subsidiaries			(15,015,552,002	)		423,141,248,509
Net cash flows from the disposal of subsidiaries			20,017,582,788			(23,627,667,983	)
Acquisition of property and equipment	11		(16,959,654,589	)		(29,570,584,652	)
Disposal of property and equipment	11		—			4,951,169,480
Acquisition of intangible assets	13		(84,071,797,962	)		(44,984,648,728	)
Disposal of intangible assets	13		2,026,623,952			1,019,665,000
Acquisition of investment properties	12		(122,917,226,640	)		(1,604,544,643	)
Disposal of investment properties	12		2,203,720,000			568,221,998,917
Disposal of assets held for sale			—			180,716,585,190
Others			(77,219,607	)		(21,285,090,533	)

Net cash provided by investing activities			46,018,398,855			427,935,223,353

Cash flows from financing activities
Increase in borrowings	43		5,258,215,770,958			2,297,792,355,062
Issuance of debentures	43		1,014,244,570,546			—
Repayment of debentures	43		(340,000,000,000	)		(533,914,081,400	)
Increase in guarantee deposit liabilities	43		3,001,964,459			497,469,282
Dividends paid	25		(100,000,000,000	)		(400,000,000,000	)
Decrease of lease liabilities	43		(35,301,268,346	)		(30,267,166,265	)
Issuance of hybrid securities	23		119,963,080,000			506,130,312,000
Dividends of hybrid securities	25		(25,167,500,000	)		(3,437,500,000	)
Increase(decrease) in other liabilities	43		6,473,096,242			(28,794,866,335	)

Net cash provided by financing activities			5,901,429,713,859			1,808,006,522,344

Effect of exchange rate changes on cash and cash equivalents			(569,201,171	)		(4,027,082,739	)

Net increase in cash and cash equivalents			(629,878,724,006	)		568,775,131,552
Cash and cash equivalents at the beginning of the year	5		1,244,629,151,170			675,854,019,618

Cash and cash equivalents in consolidated statement of financial position as at the end of the year	5		614,750,427,164			1,244,629,151,170

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

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KB SECURITIES CO., LTD. and Subsidiaries

Notes to the Consolidated Financial Statements

December 31, 2023 and 2022

1. General Information

General information of KB Securities Co., Ltd. (the “Parent Company” or “KB Securities”) which is a controlling company in accordance with Korean IFRS No.1110 Consolidated Financial Statements, and 90 subsidiaries including KBFG Securities America Inc. is as follows:

The Parent Company was established on June 1, 1962, under the name of Kookil Securities Co., Ltd. On June 5, 1986, the Parent Company changed its name to “Hyundai Securities Co., Ltd.”. After several capital increases, the share capital of the Parent Company amounts to 1,493,102 million as at December 31, 2023.

The Parent Company became a wholly owned subsidiary of KB Financial Group Inc. on October 19, 2016, through a comprehensive exchange of shares. At the end of the reporting period, KB Financial Group Inc. owns 100% of ordinary shares of the Parent Company.

Meanwhile, the Parent Company merged with KB Investment & Securities Co., Ltd. (the “KB Investment & Securities”) on December 30, 2016 as a surviving company and changed its name to KB Securities Co., Ltd. As at December 31, 2023, the Parent Company has 87 branch offices in Korea and one overseas branch office.

Details of the consolidated subsidiaries as at December 31, 2023 and 2022, are as follows:


	2023
Investor	Investee	Percentage of ownership (%)	Location	Date of financial statements	Industry
The Parent Company	KBFG Securities America Inc.	100.00	USA	December	Investment, advisory
	KB Securities Hong Kong Ltd.	100.00	Hong Kong	December	Investment, advisory
	KB Securities Vietnam Joint Stock Company	99.81	Vietnam	December	Investment, advisory
	KB FINA Joint Stock Company	77.82	Vietnam	December	IT(Fintech)
	PT. KB Valbury Sekuritas	65.00	Indonesia	December	Investment, advisory
	KB Digital Innovation&growth New Technology Business Investment Fund 1	20.00	Korea	December	Other financial
	KB Pre-IPO 2nd (TCB) New Technology Business Investment Fund 1	42.86	Korea	December	Other financial
	JB New Jersey Private Real Estate Fund 1	98.15	Korea	December	Funds
	LB Ireland Private Real Estate Investment Trust 8	96.64	Korea	December	Funds
	Pacific US BlackRock Private Placement Real Estate Fund Investment Trust No. 15	98.51	Korea	December	Funds
	Vestas Qualified Investors’ Private Real Estate Fund Investment Trust No. 38	53.25	Korea	December	Funds
	JB Dry Street Private Fund 1	100.00	Korea	December	Funds
	JB Australia108 Private Fund 1	100.00	Korea	December	Funds
	JB Forge Private Fund 1	100.00	Korea	December	Funds
	JB Hall Street Private Fund 1	100.00	Korea	December	Funds
	JB Margaret Street Private Fund 1	100.00	Korea	December	Funds
	GH Real Estate I LP	81.00	Guernsey	December	Investment
	GVA Europe Pre-IPO Private Investment Trust No.1	100.00	Korea	December	Funds
	LIFE Global Reits Pre-IPO General Private Investment Trust 1	99.50	Korea	December	Funds
	Able Gwonseon 1st Co., Ltd. 1	—	Korea	December	Asset-backed securitization
	Newstar IP Co., Ltd. 1	—	Korea	December	Asset-backed securitization

Table of Contents

KB SECURITIES CO., LTD. and Subsidiaries

Notes to the Consolidated Financial Statements

December 31, 2023 and 2022


	2023
Investor	Investee	Percentage of ownership (%)	Location	Date of financial statements	Industry
	Newstar Gimpo 1st Co., Ltd 1	—	Korea	December	Asset-backed securitization
	Able Gongpyeong 1st Co.,Ltd 1	—	Korea	December	Asset-backed securitization
	Newstar Believe Co., Ltd. 1	—	Korea	December	Asset-backed securitization
	ABR Joongang2 1st Co.,Ltd 1	—	Korea	December	Asset-backed securitization
	KB Tongyoung 1st Co., Ltd 1	—	Korea	December	Asset-backed securitization
	Able Sewoon Co., Ltd. 1	—	Korea	December	Asset-backed securitization
	Able Gasan 1st Co., Ltd. 1	—	Korea	December	Asset-backed securitization
	Able PT 1st Co., Ltd 1	—	Korea	December	Asset-backed securitization
	Newstar Plus 1st Co., Ltd. 1	—	Korea	December	Asset-backed securitization
	KB MyeongJi 1st Co.,Ltd. 1	—	Korea	December	Asset-backed securitization
	Able Dangjin 1st Co.,Ltd. 1	—	Korea	December	Asset-backed securitization
	KB Osansegyo 2nd Co.,Ltd. 1	—	Korea	December	Asset-backed securitization
	KB Mapo 2nd Co.,Ltd. 1	—	Korea	December	Asset-backed securitization
	Able Wonchang 1st Co., Ltd. 1	—	Korea	December	Asset-backed securitization
	Zitaress 1st Co., Ltd. 1	—	Korea	December	Asset-backed securitization
	Able Beomeo-one Co., Ltd. 1	—	Korea	December	Asset-backed securitization
	KB Infra 2nd Co., Ltd. 1	—	Korea	December	Asset-backed securitization
	Newstar Sina Co., Ltd. 1	—	Korea	December	Asset-backed securitization
	KB Gold 1st Co.,Ltd. 1	—	Korea	December	Asset-backed securitization
	Able MK 1st Co.Ltd 1	—	Korea	December	Asset-backed securitization
	Newstar Gimpo 4th Co.,Ltd. 1	—	Korea	December	Asset-backed securitization
	HD Value 1st Co., Ltd. 1	—	Korea	December	Asset-backed securitization
	Powerplay 1st Co., Ltd. 1	—	Korea	December	Asset-backed securitization
	Able Dosan 1st Co., Ltd 1	—	Korea	December	Asset-backed securitization
	Able Maseok 1st Co., Ltd. 1	—	Korea	December	Asset-backed securitization
	TW Seocho 1st Co., Ltd. 1	—	Korea	December	Asset-backed securitization
	TW Seocho 2nd Co., Ltd. 1	—	Korea	December	Asset-backed securitization
	Newstar Wave 1st Co., Ltd. 1	—	Korea	December	Asset-backed securitization
	Lamdamine 1st Co.,Ltd 1	—	Korea	December	Asset-backed securitization
	Able Next 1st Co., Ltd 1	—	Korea	December	Asset-backed securitization
	Newstar Enerbil 1st Co., Ltd. 1	—	Korea	December	Asset-backed securitization
	YSMC 1st Co., Ltd. 1	—	Korea	December	Asset-backed securitization
	KB SmartSchool 1st Co., Ltd. 1	—	Korea	December	Asset-backed securitization
	Bighouse 7th Co., Ltd. 1	—	Korea	December	Asset-backed securitization

Table of Contents

KB SECURITIES CO., LTD. and Subsidiaries

Notes to the Consolidated Financial Statements

December 31, 2023 and 2022


	2023
Investor	Investee	Percentage of ownership (%)	Location	Date of financial statements	Industry
	Gyeongsan Logis 1st Co., Ltd 1	—	Korea	December	Asset-backed securitization
	Stoke 2nd Corp 1	—	Korea	December	Asset-backed securitization
	KB Samyoung Co., Ltd. 1	—	Korea	December	Asset-backed securitization
	KB Global Contents Private Investment Fund 1	27.27	Korea	December	Other financial
	Newstar Seongnam 1st Co.,Ltd 1	—	Korea	December	Asset-backed securitization
	KPS Sihwa 1st Co., Ltd. 1	—	Korea	December	Asset-backed securitization
	GDIC 2nd co.ltd 1	—	Korea	December	Asset-backed securitization
	Newstar NRB First Co., Ltd. 1	—	Korea	December	Asset-backed securitization
	Able Dongtan 1st Co., Ltd. 1	—	Korea	December	Asset-backed securitization
	Newstar Gimpo 5th Co.,Ltd. 1	—	Korea	December	Asset-backed securitization
	Able Banpo 1st Co., Ltd. 1	—	Korea	December	Asset-backed securitization
	Able Banpo 2nd Co., Ltd. 1	—	Korea	December	Asset-backed securitization
	Able alpha Co., Ltd. 1	—	Korea	December	Asset-backed securitization
	Newstar one-firm 2023-1 3rd. Co., Ltd. 1	—	Korea	December	Asset-backed securitization
	Newstar one-firm 2023-1 4th. Co., Ltd. 1	—	Korea	December	Asset-backed securitization
	Newstar one-firm 2023-1 5th. Co., Ltd. 1	—	Korea	December	Asset-backed securitization
	Star-Lord AlphaFlux General Investors Private Real Estate Investment Company No.11	99.78	Korea	December	Funds
	French Shine 1st Co., Ltd. 1	—	Korea	December	Asset-backed securitization
	Able Yongdap 2nd Co., Ltd. 1	—	Korea	December	Asset-backed securitization
	KB Securities ESG Value Enhancement Fund	93.75	Korea	December	Other financial
	Able Bonri 1st Co., Ltd. 1	—	Korea	December	Asset-backed securitization
	Newstar JH Center Co., Ltd. 1	—	Korea	December	Asset-backed securitization
	Able TY 2nd Co., Ltd. 1	—	Korea	December	Asset-backed securitization
	Keppel Private Real Estate Investment Trust No.13	75.85	Korea	December	Funds
	Able Eunhwasam 2nd Co., Ltd. 1	—	Korea	December	Asset-backed securitization
	Newstar Yangju Station 1st Co., Ltd. 1	—	Korea	December	Asset-backed securitization
	Able Chowall 2nd Co., Ltd. 1	—	Korea	December	Asset-backed securitization
	Newstar Sina Co., Ltd. 1	—	Korea	December	Asset-backed securitization
	Mangrove Feeder Fund	86.06	Cayman Islands	December	Funds
Mangrove Feeder Fund	Mangrove Master Fund	100.00	Cayman Islands	December	Funds
KB Securities Hong Kong Ltd.	Global Investment Opportunity Limited	100.00	Malaysia	December	Financial & Real-estate
JB New Jersey Private Real Estate Fund 1	Able NJ DSM Investment REIT	99.18	USA	December	Real-estate Investment
Able NJ DSM Investment REIT	ABLE NJ DSM LLC	100.00	USA	December	Real-estate Investment
PT. KB Valbury Sekuritas	PT. Valbury Capital Management	79.00	Indonesia	December	Investment

Table of Contents

KB SECURITIES CO., LTD. and Subsidiaries

Notes to the Consolidated Financial Statements

December 31, 2023 and 2022


	2023
Investor	Investee	Percentage of ownership (%)	Location	Date of financial statements	Industry
Newstar one-firm 2023-1 3rd. Co., Ltd.	Newstar one-firm 2023-1 1st. Co., Ltd. 1	—	Korea	December	Asset-backed securitization
Newstar one-firm 2023-1 4th. Co., Ltd.
Newstar one-firm 2023-1 5th., Ltd.
The Parent Company. YSMC 1st Co., Ltd.	K-1 23th Yeoksam Real Estate Investment Trust Company	60.88	Korea	December	Real-estate Investment

1	The Group has a substantive power over the special purpose entities (“SPEs”) or investment trusts and is exposed to variable returns. Accordingly, these SPEs and investment trusts are included in subsidiaries although the Group’s ownership is less than 50%.


	2022
Investor	Investee	Percentage of ownership (%)	Location	Date of financial statements	Industry
The Parent Company	KBFG Securities America Inc.	100.00	USA	December	Investment, advisory
	KB Securities Hong Kong Ltd.	100.00	Hong Kong	December	Investment, advisory
	KB Securities Vietnam Joint Stock Company	99.81	Vietnam	December	Investment, advisory
	KB FINA Joint Stock Company	77.82	Vietnam	December	IT(Fintech)
	PT. KB Valbury Sekuritas	65.00	Indonesia	December	Investment, advisory
	KB Digital Innovation&growth New Technology Business Investment Fund 1	20.00	Korea	December	Other financial
	KB Pre-IPO 2nd (TCB) New Technology Business Investment Fund 1	42.86	Korea	December	Other financial
	JB New Jersey Private Real Estate Fund 1	98.15	Korea	December	Funds
	LB Ireland Private Real Estate Investment Trust 8	96.64	Korea	December	Funds
	Pacific US BlackRock Private Placement Real Estate Fund Investment Trust No. 15	98.51	Korea	December	Funds
	DAOL KTB Aircraft Private Investment Trust No.21-1	99.61	Korea	December	Funds
	Vestas General Private Real Estate Fund Investment Trust No. 38	54.92	Korea	December	Funds
	JB Dry Street Private Fund 1	100.00	Korea	December	Funds
	JB Australia108 Private Fund 1	100.00	Korea	December	Funds
	JB Forge Private Fund 1	100.00	Korea	December	Funds
	JB Hall Street Private Fund 1	100.00	Korea	December	Funds
	JB Margaret Street Private Fund 1	100.00	Korea	December	Funds
	GH Real Estate I LP	81.00	Guernsey	December	Investment
	Hanwha US Equity Strategy Private Real Estate Fund 3	99.95	Korea	December	Funds
	GVA Europe Pre-IPO Private Investment Trust No.1	100.00	Korea	December	Funds
	LIFE Global Reits Pre-IPO General Private Investment Trust 1	99.50	Korea	December	Funds
	KB KBSTAR US Short-Term IG Corporate Bond ETF	59.88	Korea	December	Funds
	Able Gwonseon 1st Co., Ltd. 1	—	Korea	December	Asset-backed securitization
	Paradise Yeongjong 2nd Co., Ltd. 1	—	Korea	December	Asset-backed securitization
	Newstar IP Co., Ltd. 1	—	Korea	December	Asset-backed securitization
	Songdo PFive 2nd Co., Ltd. 1	—	Korea	December	Asset-backed securitization
	Newstar Gimpo 1st Co., Ltd. 1	—	Korea	December	Asset-backed securitization

Table of Contents

KB SECURITIES CO., LTD. and Subsidiaries

Notes to the Consolidated Financial Statements

December 31, 2023 and 2022


	2022
Investor	Investee	Percentage of ownership (%)	Location	Date of financial statements	Industry
	Able Gongpyeong 1st Co., Ltd. 1	—	Korea	December	Asset-backed securitization
	Able Chowall 1st Co., Ltd. 1	—	Korea	December	Asset-backed securitization
	FN Gasan 1st Co., Ltd. 1	—	Korea	December	Asset-backed securitization
	Newstar Believe Co., Ltd. 1	—	Korea	December	Asset-backed securitization
	ABR Joongang2 1st Co., Ltd. 1	—	Korea	December	Asset-backed securitization
	KB Tongyoung 1st Co., Ltd. 1	—	Korea	December	Asset-backed securitization
	Able Sky 1st Co., Ltd. 1	—	Korea	December	Asset-backed securitization
	Able Poongdong 1st Co., Ltd. 1	—	Korea	December	Asset-backed securitization
	Able Sewoon Co., Ltd. 1	—	Korea	December	Asset-backed securitization
	Able Gasan 1st Co., Ltd. 1	—	Korea	December	Asset-backed securitization
	Able PT 1st Co., Ltd. 1	—	Korea	December	Asset-backed securitization
	Newstar Plus 1st Co., Ltd. 1	—	Korea	December	Asset-backed securitization
	KB MyeongJi 1st Co., Ltd. 1	—	Korea	December	Asset-backed securitization
	Able Dangjin 1st Co., Ltd. 1	—	Korea	December	Asset-backed securitization
	KB Osansegyo 2nd Co., Ltd. 1	—	Korea	December	Asset-backed securitization
	KB Mapo 2nd Co., Ltd. 1	—	Korea	December	Asset-backed securitization
	Able Wonchang 1st Co., Ltd. 1	—	Korea	December	Asset-backed securitization
	Zitaress 1st Co., Ltd. 1	—	Korea	December	Asset-backed securitization
	Able Beomeo-one Co., Ltd. 1	—	Korea	December	Asset-backed securitization
	KB Infra 2nd Co., Ltd. 1	—	Korea	December	Asset-backed securitization
	Newstar Sina Co., Ltd. 1	—	Korea	December	Asset-backed securitization
	KB Gold 1st Co., Ltd. 1	—	Korea	December	Asset-backed securitization
	Inspire Gold 2nd Co., Ltd. 1	—	Korea	December	Asset-backed securitization
	Able MK 1st Co., Ltd. 1	—	Korea	December	Asset-backed securitization
	Newstar Gimpo 4th Co., Ltd. 1	—	Korea	December	Asset-backed securitization
	HD Value 1st Co., Ltd. 1	—	Korea	December	Asset-backed securitization
	Powerplay 1st Co., Ltd. 1	—	Korea	December	Asset-backed securitization
	Able Wonsi 1st Co., Ltd. 1	—	Korea	December	Asset-backed securitization
	Able Dosan 1st Co., Ltd. 1	—	Korea	December	Asset-backed securitization
	Newstar Gimpopoongmoo Co., Ltd. 1	—	Korea	December	Asset-backed securitization
	Able Maseok 1st Co., Ltd. 1	—	Korea	December	Asset-backed securitization
	TW Seocho 1st Co., Ltd. 1	—	Korea	December	Asset-backed securitization
	TW Seocho 2nd Co., Ltd. 1	—	Korea	December	Asset-backed securitization
	Newstar Wave 1st Co., Ltd. 1	—	Korea	December	Asset-backed securitization

Table of Contents

KB SECURITIES CO., LTD. and Subsidiaries

Notes to the Consolidated Financial Statements

December 31, 2023 and 2022


	2022
Investor	Investee	Percentage of ownership (%)	Location	Date of financial statements	Industry
	Lamdamine 1st Co., Ltd. 1	—	Korea	December	Asset-backed securitization
	Able Next 1st Co., Ltd. 1	—	Korea	December	Asset-backed securitization
	Able Dongil 1st Co., Ltd. 1	—	Korea	December	Asset-backed securitization
	Newstar Shiny 1st Co., Ltd. 1	—	Korea	December	Asset-backed securitization
	Newstar Enerbil 1st Co., Ltd. 1	—	Korea	December	Asset-backed securitization
	YSMC 1st Co., Ltd. 1	—	Korea	December	Asset-backed securitization
	HJ Galaxy 3rd Co., Ltd. 1	—	Korea	December	Asset-backed securitization
	KB SmartSchool 1st Co., Ltd. 1	—	Korea	December	Asset-backed securitization
	Bighouse 7th Co., Ltd. 1	—	Korea	December	Asset-backed securitization
	Newstar Energy 1st Co., Ltd. 1	—	Korea	December	Asset-backed securitization
	Gyeongsan Logis 1st Co., Ltd. 1	—	Korea	December	Asset-backed securitization
	Stoke 2nd Corp 1	—	Korea	December	Asset-backed securitization
	KB Samyoung Co., Ltd. 1	—	Korea	December	Asset-backed securitization
	KB Global Contents Private Investment Fund 1	27.27	Korea	December	Other financial
	Newstar Seongnam 1st Co., Ltd. 1	—	Korea	December	Asset-backed securitization
	KPS Sihwa 1st Co., Ltd. 1	—	Korea	December	Asset-backed securitization
	KB NY 1st Co., Ltd. 1	—	Korea	December	Asset-backed securitization
	GDIC 2nd Co., Ltd. 1	—	Korea	December	Asset-backed securitization
	Newstar NRB First Co., Ltd. 1	—	Korea	December	Asset-backed securitization
	Able Dongtan 1st Co., Ltd. 1	—	Korea	December	Asset-backed securitization
	Newstar Gimpo 5th Co., Ltd. 1	—	Korea	December	Asset-backed securitization
	Cassiopeia 1st Co., Ltd. 1	—	Korea	December	Asset-backed securitization
	Able Banpo 1st Co., Ltd. 1	—	Korea	December	Asset-backed securitization
	Able Banpo 2nd Co., Ltd. 1	—	Korea	December	Asset-backed securitization
	Able Gyeonggi Gwangju 1st Co., Ltd. 1	—	Korea	December	Asset-backed securitization
	Newstar Byeongjeom 1st Co., Ltd. 1	—	Korea	December	Asset-backed securitization
	Piggarden 1st Co., Ltd. 1	—	Korea	December	Asset-backed securitization
	Mangrove Feeder Fund	92.88	Cayman Islands	December	Funds
Mangrove Feeder Fund	Mangrove Master Fund	100.00	Cayman Islands	December	Funds
KB Securities Hong Kong Ltd.	Global Investment Opportunity Limited	100.00	Malaysia	December	Financial & real-estate
LB Ireland Private Real Estate Investment Trust 8	Beckett Acquisition Limited	100.00	Ireland	December	Real-estate Investment
JB New Jersey Private Real Estate Fund 1	ABLE NJ DSM Investment REIT	99.18	USA	December	Real-estate Investment
Able NJ DSM Investment REIT	ABLE NJ DSM, LLC	100.00	USA	December	Real-estate Investment

Table of Contents

KB SECURITIES CO., LTD. and Subsidiaries

Notes to the Consolidated Financial Statements

December 31, 2023 and 2022


	2022
Investor	Investee	Percentage of ownership (%)	Location	Date of financial statements	Industry
Vestas General Private Real Estate Fund Investment Trust No. 38	Lumen International Developments	100.00	Luxemburg	December	Real-estate Investment
Lumen International Developments	VREF Shaftesbury ScSp	100.00	Luxemburg	December	Real-estate Investment
PT. KB Valbury Sekuritas	PT. Valbury Capital Management	79.00	Indonesia	December	Investment

1	The Group has a substantive power over the special purpose entities (“SPEs”) or investment trusts and is exposed to variable returns. Accordingly, these SPEs and investment trusts are included in subsidiaries although the Group’s ownership is less than 50%.

Summarized financial information of major subsidiaries as at and for the years ended December 31, 2023 and 2022, is as follows:


(in thousands of Korean won)	December 31, 2023				2023
Name of subsidiary	Assets		Liabilities		Operating profit		Profit (loss) for the year			Total comprehensive income(loss)
KBFG Securities America Inc.		20,947,929		3,611,764		3,370,524		(1,033,048	)		(705,752	)
KB Securities Hong Kong Ltd.		277,977,210		25,915,033		19,808,163		8,546,530			12,164,272
KB Securities Vietnam Joint Stock Company		645,271,727		426,808,037		72,721,548		7,384,814			5,183,349
KB FINA Joint Stock Company		10,942,716		183,325		57,908		(1,740,192	)		(1,806,383	)
PT. KB Valbury Sekuritas		121,609,292		41,258,453		20,193,903		3,459,924			3,459,924
JB New Jersey Private Real Estate Fund 1		16,308,668		1,136		5,231		350,581			350,581
LB Ireland Private Real Estate Investment Trust 8		73,131		3,902,978		5,250,012		(71,202,621	)		(70,780,001	)
Mangrove Feeder Fund		35,058,926		29,213		80,817		(3,706,303	)		(8,559,407	)
Mangrove Master Fund		42,319,887		7,264,757		3,794,645		(5,809,709	)		(10,589,615	)
GH Real Estate I LP		28,372,761		1,130,136		—		(167,745	)		1,279,191
Global Investment Opportunity Limited		210,157		—		1,540		(13,260	)		(9,271	)
Beckett Acquisition Limited 1		—		—		7,529,302		(63,105,673	)		(63,528,609	)
Able NJ DSM Investment REIT		19,605,204		156,615		69,388		290,726			617,545
ABLE NJ DSM LLC		37,360,239		35,565,177		3,840,243		420,041			440,507
Pacific US BlackRock Private Placement Real Estate Fund Investment Trust No. 15		14,797,323		689,607		1,964,546		(1,420,674	)		(1,420,674	)
DAOL KTB Aircraft Private Investment Trust No.21-1 1		—		—		766,243		759,295			759,295
KB Digital Innovation & growth New Technology Business Investment Fund		7,998,206		167,987		181,214		(1,142,829	)		(1,142,829	)
KB Pre-IPO 2nd (TCB) New Technology Business Investment Fund		33,610,983		128,874		5,870,046		5,201,805			5,201,805
Able Gwonseon 1st Co., Ltd.		11,145,645		11,160,702		745,750		55,849			55,849
Paradise Yeongjong 2nd Co., Ltd. 1		—		—		301,315		113,242			113,242
Vestas Qualified Investors’ Private Real Estate Fund Investment Trust No. 38		5,281,192		348,321		24,258,341		(197,406,412	)		(196,283,032	)
Lumen International Developments 1		—		—		—		(13,164,758	)		(14,536,353	)
VREF Shaftesbury ScSp 1		—		—		23,898,293		(37,830,310	)		(49,320,462	)
Newstar IP Co., Ltd.		50,009,515		50,678,605		3,197,763		238,119			238,119
JB Dry Street Private Fund 1		219,053		9,237		1,042,051		860,601			860,601
JB Australia108 Private Fund 1		143,048		3,554		730,007		603,628			603,628
JB Forge Private Fund 1		102,535		2,882		521,465		430,983			430,983
JB Hall Street Private Fund 1		214,429		3,221		985,511		818,350			818,350
JB Margaret Street Private Fund 1		59,522		673		278,998		231,555			231,555
Hanwha US Equity Strategy Private Real Estate Fund 3 1		—		—		47,498		(1,759,446	)		(1,759,446	)
PT. Valbury Capital Management		987,145		1,128,893		68,014		(1,042,141	)		(1,042,141	)

Table of Contents

KB SECURITIES CO., LTD. and Subsidiaries

Notes to the Consolidated Financial Statements

December 31, 2023 and 2022


(in thousands of Korean won)	December 31, 2023				2023
Name of subsidiary	Assets		Liabilities		Operating profit		Profit (loss) for the year			Total comprehensive income(loss)
Songdo PFive 2nd Co., Ltd 1		—		—		5,124,127		(55,268	)		(55,268	)
Newstar Gimpo 1st Co., Ltd		16,988,422		26,939,448		1,262,209		(9,864,588	)		(9,864,588	)
Able Gongpyeong 1st Co.,Ltd		17,527,763		17,693,325		647,319		(196,806	)		(196,806	)
Able Chowall 1st Co., Ltd.1		—		—		583,688		133,053			133,053
FN Gasan 1st Co., Ltd. 1		—		—		130,584		30,368			30,368
Newstar Believe Co., Ltd.		5,744,309		6,646,068		254,920		(604,872	)		(604,872	)
ABR Joongang2 1st Co.,Ltd		19,401,055		18,908,578		1,660,744		201,904			201,904
KB Tongyoung 1st Co., Ltd		21,804,297		21,346,230		1,719,366		739,047			739,047
Able Sky 1st Co., Ltd. 1		—		—		839,918		705,154			705,154
Able Poongdong 1st Co., Ltd. 1		—		—		333,975		(12,358	)		(12,358	)
Able Sewoon Co., Ltd.		35,024,562		34,877,184		1,572,721		(84,626	)		(84,626	)
Able Gasan 1st Co., Ltd.		24,812,807		24,697,095		2,683,714		324,308			324,308
Able PT 1st Co., Ltd		5,595,738		5,371,802		520,274		538,965			538,965
Newstar Plus 1st Co., Ltd.		16,613,732		16,000,000		1,094,286		343,675			343,675
KB MyeongJi 1st Co.,Ltd.		15,809,084		15,458,414		1,217,002		252,430			252,430
Able Dangjin 1st Co.,Ltd.		22,597,253		22,274,657		1,923,039		(195,205	)		(195,205	)
KB Osansegyo 2nd Co.,Ltd.		4,123,012		4,096,052		391,578		28,397			28,397
KB Mapo 2nd Co.,Ltd.		9,693,542		10,505,102		609,787		86,719			86,719
Able Wonchang 1st Co., Ltd.		8,686,872		10,034,356		659,995		(1,301,333	)		(1,301,333	)
Zitaress 1st Co., Ltd.		25,686,630		25,540,113		1,338,260		324,608			324,608
Able Beomeo-one Co., Ltd.		31,430,332		31,708,659		1,741,290		(64,223	)		(64,223	)
KB Infra 2nd Co., Ltd.		26,218,769		26,245,000		856,031		(340,163	)		(340,163	)
Newstar Sina Co., Ltd.		27,752,055		28,045,317		2,462,046		315,529			315,529
KB Gold 1st Co.,Ltd.		21,525,289		20,739,066		2,150,393		771,182			771,182
Inspire Gold 2nd Co., Ltd. 1		—		—		226,422		76,321			76,321
Able MK 1st co.ltd		41,492,789		41,748,477		1,373,873		(154,234	)		(154,234	)
Newstar Gimpo 4th Co.,Ltd.		592,598		7,274,528		532,092		(6,673,059	)		(6,673,059	)
HD Value 1st Co., Ltd.		102,726,240		102,739,113		5,044,823		(3,473	)		(3,473	)
Powerplay 1st Co., Ltd.		6,167,369		5,965,134		130,991		(85,805	)		(85,805	)
Able Dosan 1st Co., Ltd		16,318,461		15,402,065		1,865,056		701,963			701,963
Able Maseok 1st Co., Ltd.		45,776,808		47,650,800		2,973,609		(1,573,026	)		(1,573,026	)
TW Seocho 1st Co., Ltd.		154,285,407		158,083,402		9,438,647		(3,567,975	)		(3,567,975	)
TW Seocho 2nd Co., Ltd.		30,627,915		31,377,281		2,656,837		(399,456	)		(399,456	)
Newstar Wave 1st Co., Ltd.		88,025,880		91,106,853		3,982,049		(2,295,729	)		(2,295,729	)
Lamdamine 1st Co.,Ltd		62,494,267		67,302,151		6,252,531		(4,660,912	)		(4,660,912	)
Able Next 1st Co., Ltd		21,066,194		21,114,190		2,367,850		943,762			943,762
Newstar Enerbil 1st Co., Ltd.		100,748,534		101,233,860		4,668,659		(302,720	)		(302,720	)
YSMC 1st Co., Ltd.		47,548,662		48,500,000		2,589,744		(59,089	)		(59,089	)
HJ Galaxy 3rd Co., Ltd. 1		—		—		1,478,975		629,392			629,392
KB SmartSchool 1st Co., Ltd.		16,209,718		15,624,288		1,609,736		1,049,996			1,049,996
Bighouse 7th Co., Ltd.		138,732,519		132,810,797		17,865,600		6,906,992			6,906,992
Newstar Energy 1st Co., Ltd. 1		—		—		3,034,984		914,859			914,859
Gyeongsan Logis 1st Co., Ltd		25,528,040		25,358,949		914,708		(388,431	)		(388,431	)
Stoke 2nd Corp		74,640,194		73,860,462		5,394,011		135,934			135,934
KB Samyoung Co., Ltd.		6,141,254		5,992,627		431,794		121,990			121,990
KB Global Contents Private Investment Fund		16,016,816		68,788		7,254		(258,640	)		(258,640	)
Newstar Seongnam 1st Co.,Ltd		18,595,462		19,517,477		1,439,876		(1,214,736	)		(1,214,736	)
KPS Sihwa 1st Co., Ltd.		242,632,519		244,591,483		10,802,574		(5,528,495	)		(5,528,495	)
KB NY 1st Co., Ltd. 1		—		—		1,073,718		(3,272,256	)		(3,272,256	)
GDIC 2nd co.ltd		23,253,402		31,347,930		2,047,990		(7,586,500	)		(7,586,500	)
Newstar NRB First Co., Ltd.		28,179,164		29,873,057		2,340,277		114,398			114,398
Able Dongtan 1st Co., Ltd.		21,684,637		28,742,409		2,435,779		(6,186,155	)		(6,186,155	)
Newstar Gimpo 5th Co.,Ltd.		668,891		36,774,648		2,558,090		(34,624,739	)		(34,624,739	)
GVA Europe Pre-IPO Private Investment Trust No.1		29,906,756		18,094		5,128		2,069,696			2,069,696

Table of Contents

KB SECURITIES CO., LTD. and Subsidiaries

Notes to the Consolidated Financial Statements

December 31, 2023 and 2022


(in thousands of Korean won)	December 31, 2023				2023
Name of subsidiary	Assets		Liabilities		Operating profit		Profit (loss) for the year			Total comprehensive income(loss)
LIFE Global Reits Pre-IPO General Private Investment Trust 1		59,629,904		34,790		6,935		4,127,598			4,127,598
KB KBSTAR US Short-Term IG Corporate Bond ETF 1		—		—		5,584,427		5,031,065			5,031,065
Cassiopeia 1st Co., Ltd. 1		—		—		443,768		(44,939	)		(44,939	)
Able Banpo 1st Co., Ltd.		14,115,040		17,259,046		1,944,117		(2,944,492	)		(2,944,492	)
Able Banpo 2nd Co., Ltd.		8,635,523		10,905,953		942,311		(2,092,994	)		(2,092,994	)
Able Gyeonggi Gwangju 1st Co., Ltd. 1		—		—		664,800		(22,902	)		(22,902	)
Piggarden 1st Co., Ltd. 1		—		—		1,232,877		254,666			254,666
Newstar copper 2nd Co., Ltd. 1		—		—		2,855,624		202,297			202,297
Newstar copper 3rd Co., Ltd. 1		—		—		2,755,505		202,175			202,175
Star-Lord AlphaFlux General Investors Private Real Estate Investment Company No.11		130,527,942		92,292,106		1,165		(6,764,164	)		(6,764,164	)
Able alpha Co., Ltd.		19,155,865		19,499,839		1,191,614		(343,974	)		(343,974	)
Newstar one-firm 2023-1 1st. Co., Ltd.		366,173,524		367,220,017		23,032,564		(1,046,502	)		(1,046,502	)
Newstar one-firm 2023-1 3rd. Co., Ltd.		21,111,940		21,083,044		1,216,721		28,886			28,886
Newstar one-firm 2023-1 4th. Co., Ltd.		53,237,451		53,130,420		3,441,847		107,021			107,021
Newstar one-firm 2023-1 5th. Co., Ltd.		77,249,336		77,511,098		7,124,652		(261,772	)		(261,772	)
K-1 23th Yeoksam Real Estate Investment Trust Company		307,706,597		169,366,780		9,952,766		(3,722,200	)		(3,722,200	)
French Shine 1st Co., Ltd.		31,324,688		31,349,938		1,867,744		(25,250	)		(25,250	)
Themis 1st Co., Ltd. 1		—		—		1,276,457		(316,456	)		(316,456	)
Able Yongdap 2nd Co., Ltd.		29,313,986		29,405,062		1,549,057		(91,086	)		(91,086	)
Shinhan Motor Term Loan B 1st Co., Ltd. 1		—		—		1,491,378		194,984			194,984
Global Funding Segregated Portfolio Co. 1		—		—		3,358,625		(5,033,326	)		(5,033,326	)
KB Securities ESG Value Enhancement Fund		1,045,029		24,436		320		(45,407	)		(45,407	)
Keppel Private Real Estate Investment Trust No.13		187,217,054		105,063,410		2,362,223		(2,746,356	)		(2,746,356	)
Able Bonri 1st Co., Ltd.		144,272,497		142,927,036		6,631,417		1,345,451			1,345,451
Newstar JH Center Co., Ltd.		48,872,193		48,910,204		2,386,169		(38,012	)		(38,012	)
Able TY 2nd Co., Ltd.		12,799,793		16,069,805		852,487		(3,270,022	)		(3,270,022	)
Able TY 1st Co., Ltd. 1		—		—		356,164		(3,159,024	)		(3,159,024	)
Able Eunhwasam 2nd Co., Ltd.		103,326,781		106,374,520		2,740,990		(3,047,740	)		(3,047,740	)
Newstar Yangju Station 1st Co., Ltd.		8,351,658		8,344,959		210,130		6,698			6,698
Able Chowall 2nd Co., Ltd.		13,430,010		13,297,222		468,175		132,778			132,778
Newstar Sina Co., Ltd.		64,687,242		65,681,468		1,478,161		(994,236	)		(994,236	)
Able Dongil 1st Co., Ltd 1		—		—		—		—			—
Newstar Byeongjeom 1st Co., Ltd. 1		—		—		—		—			—
Able Wonsi 1st Co., Ltd. 1		—		—		—		—			—
Newstar Shiny 1st Co., Ltd. 1		—		—		—		—			—
Newstar Gimpopoongmoo Co., Ltd. 1		—		—		—		—			—

1	These companies are excluded from subsidiaries as at December 31, 2023.


(in thousands of Korean won)	December 31, 2022				2022
Name of subsidiary	Assets		Liabilities		Operating profit		Profit (loss) for the year			Total comprehensive income(loss)
KBFG Securities America Inc.		21,974,646		3,932,730		3,376,122		(541,989	)		667,213
KB Securities Hong Kong Ltd.		267,947,007		28,049,102		20,468,272		(2,268,070	)		13,435,805
KB Securities Vietnam Joint Stock Company		538,755,846		325,475,504		67,884,410		12,933,143			18,583,701
KB FINA Joint Stock Company		12,636,459		70,685		275,791		(2,614,764	)		(2,098,000	)
PT. KB Valbury Sekuritas		117,639,923		43,149,901		20,385,908		5,827,047			5,827,047

Table of Contents

KB SECURITIES CO., LTD. and Subsidiaries

Notes to the Consolidated Financial Statements

December 31, 2023 and 2022


(in thousands of Korean won)	December 31, 2022				2022
Name of subsidiary	Assets		Liabilities		Operating profit		Profit (loss) for the year			Total comprehensive income(loss)
KB Star Galaxy Towers REIT 1		—		—		2,553,341		(10,206,009	)		(10,206,009	)
Star Galaxy S.Comm 1		—		—		—		(6,080,923	)		(6,080,923	)
Star Galaxy GP SRL 1		—		—		—		—			—
JB New Jersey Private Real Estate Fund 1		16,374,263		13,853		161,708		242,976			242,976
Heungkuk Global Highclass Private Real Estate Trust 23 1		—		—		2,839		(865,715	)		(865,715	)
DGB General Private Real Estate Investment Trust No.8 1		—		—		232,303		216,175			216,175
LB Ireland Private Real Estate Investment Trust 8		71,328,058		4,377,904		4,112,389		4,154,362			4,056,902
MS Sejong 4th Co., Ltd. 1		—		—		125,771		110,439			110,439
KB UK Center 1st Co., Ltd. 1		—		—		372,353		(1,149,601	)		(1,149,601	)
Mangrove Feeder Fund		76,109,836		63,422		951,672		(6,940,076	)		(1,459,706	)
Mangrove Master Fund		88,568,284		12,377,851		716,348		(6,874,702	)		(1,421,334	)
GH Real Estate I LP		26,871,702		908,269		—		(174,061	)		(1,887	)
Global Investment Opportunity Limited		219,427		—		5		(17,868	)		(2,232	)
Beckett Acquisition Limited		145,620,628		139,138,011		6,217,847		(1,688,563	)		(1,627,346	)
Able NJ DSM Investment REIT		19,268,400		135,044		51,041		106,020			1,343,942
ABLE NJ DSM LLC		36,612,465		34,955,598		3,800,646		415,725			500,080
Pacific US BlackRock Private Placement Real Estate Fund Investment Trust No. 15		21,573,206		717,884		2,571,773		686,191			686,191
DAOL KTB Aircraft Private Investment Trust No.21-1		29,336,296		1,070		2,605,931		2,575,751			2,575,751
KB Digital Innovation&growth New Technology Business Investment Fund		9,059,924		86,877		398,454		(133,573	)		(133,573	)
KB Pre-IPO 2nd (TCB) New Technology Business Investment Fund		29,462,632		132,329		1,419,188		(4,169,037	)		(4,169,037	)
Able Gwonseon 1st Co., Ltd.		11,028,210		11,099,117		877,404		117,500			117,500
AJH 3rd Co., Ltd. 1		—		—		152,869		16,875			16,875
Paradise Yeongjong 2nd Co., Ltd.		19,335,720		20,595,641		834,653		17,276			17,276
Vestas General Private Real Estate Fund Investment Trust No. 38		196,545,423		1,274,568		22,929,571		11,624,590			12,931,030
Lumen International Developments		179,588,369		159,002,766		62		3,038,503			2,075,589
VREF Shaftesbury ScSp		388,861,652		246,797,825		18,142,889		3,035,342			(3,764,987	)
Alpha Spain Real Estate Private Investment Trust 1 1		—		—		6,369,232		(1,884,823	)		(1,884,823	)
Korea Investment US Amazon Logistics Private Real Estate Investment Trust NO. 1 1		—		—		167,264		(843,255	)		(843,255	)
GVA Europe Real Estate Investment Trust No.2 1		—		—		12,547,701		8,153,256			8,153,256
Newstar IP Co., Ltd.		50,393,072		51,300,282		3,338,966		(7,607,556	)		(7,607,556	)
Enewstay 1st Co., Ltd. 1		—		—		313,332		(13,149	)		(13,149	)
Newstar Panorama 1st Co., Ltd. 1		—		—		454,498		103,967			103,967
Newstar Papyrus Co., Ltd. 1		—		—		906,586		158,694			158,694
SJ Jongno 1st Co., Ltd. 1		—		—		50		4,370,130			4,370,130
KB Wise Star Real Estate Feeder Fund 2 1		—		—		360		328,331			328,331
KB Wise Star Jongno Tower Real Estate Master Fund 1		—		—		10,322,976		(979,221	)		(979,221	)
Newstar Ds 1st Co., Ltd 1		—		—		203,425		(168,254	)		(168,254	)
Newstar Ds 2nd Co., Ltd 1		—		—		2,290,393		(322,231	)		(322,231	)
JB Dry Street Private Fund 1		567,526		9,320		107,918		(100,405	)		(100,405	)
JB Australia108 Private Fund 1		390,395		3,652		74,309		(80,466	)		(80,466	)
JB Forge Private Fund 1		279,542		2,956		53,220		(50,479	)		(50,479	)
JB Hall Street Private Fund 1		528,967		3,391		100,727		(87,747	)		(87,747	)
JB Margaret Street Private Fund 1		149,507		706		28,448		(25,134	)		(25,134	)
LB UK Private Real Estate Investment Trust No.18 1		—		—		627,413		1,419,192			1,866,678

Table of Contents

KB SECURITIES CO., LTD. and Subsidiaries

Notes to the Consolidated Financial Statements

December 31, 2023 and 2022


(in thousands of Korean won)	December 31, 2022				2022
Name of subsidiary	Assets		Liabilities		Operating profit		Profit (loss) for the year			Total comprehensive income(loss)
LB UK Private Real Estate Investment Trust No.19 1		—		—		340,636		449,754			592,235
Hillswood Finco Ltd. 1		—		—		690,408		690,089			207,470
Hillswood Holdings Ltd. 1		—		—		—		10,952			(13,302	)
Hillswood Holding Property Unit Trust 1		—		—		—		780,929			(253,550	)
Hillswood Property Unit Trust 1		—		—		3,231,826		695,416			1,268,691
Hanwha US Equity Strategy Private Real Estate Fund 3		3,326,142		98,615		5,657,760		6,112,708			13,952,708
PT. Valbury Capital Management		1,202,897		356,410		186,815		(727,509	)		(727,509	)
Able Gamsam 1st Co., Ltd. 1		—		—		1,477,943		(118,996	)		(118,996	)
Songdo PFive 2nd Co., Ltd.		116,595,449		115,764,831		6,851,381		(468,239	)		(468,239	)
Newstar Gimpo 1st Co., Ltd.		26,658,736		26,745,174		1,262,574		(22,685	)		(22,685	)
Able Gongpyeong 1st Co., Ltd.		15,400,321		15,369,078		714,177		(60,621	)		(60,621	)
Able Chowall 1st Co., Ltd.		16,538,631		16,547,285		1,268,946		206,774			206,774
FN Gasan 1st Co., Ltd.		3,632,778		3,481,433		255,378		153,254			153,254
Newstar Believe Co., Ltd.		6,159,745		6,456,631		230,276		(33,039	)		(33,039	)
Able Electronics 1st Co., Ltd. 1		—		—		1,057,606		128,001			128,001
KB Echo 1st Co., Ltd. 1		—		—		249,684		42,039			42,039
ABR Joongang2 1st Co., Ltd.		20,339,878		20,049,306		1,328,288		173,259			173,259
KB Tongyoung 1st Co., Ltd.		23,382,801		23,663,781		1,404,597		(36,954	)		(36,954	)
Able Sky 1st Co., Ltd.		30,992,071		30,786,965		2,036,676		667,791			667,791
Able Poongdong 1st Co., Ltd.		2,250,844		2,230,755		535,360		37,955			37,955
Able Sewoon Co., Ltd.		42,324,593		42,092,589		1,871,110		1,350,270			1,350,270
KB Infra 1st Co., Ltd. 1		—		—		495,506		303,769			303,769
Able Gasan 1st Co., Ltd.		56,261,340		56,469,935		2,248,974		(159,209	)		(159,209	)
Able PT 1st Co., Ltd.		5,357,328		5,672,357		410,380		(155,986	)		(155,986	)
JOSH Bujeon 1st Co., Ltd. 1		—		—		749,518		161,958			161,958
Newstar Plus 1st Co., Ltd.		16,425,333		16,155,277		946,049		(21,792	)		(21,792	)
KB MyeongJi 1st Co., Ltd.		14,845,247		14,747,007		1,133,331		51,334			51,334
Able Dangjin 1st Co., Ltd.		21,240,500		20,722,700		2,039,533		601,973			601,973
KB Osansegyo 2nd Co., Ltd.		8,331,040		8,332,477		367,678		18,856			18,856
Able Hyeongok Co., Ltd. 1		—		—		435,511		76,408			76,408
KB Mapo 2nd Co., Ltd.		9,660,645		10,558,924		600,086		(1,017,998	)		(1,017,998	)
GDIC 1st Co., Ltd. 1		—		—		687,659		113,676			113,676
Able Wonchang 1st Co., Ltd.		7,413,923		7,460,083		593,202		180,359			180,359
Zitaress 1st Co., Ltd.		30,459,310		30,637,401		2,481,796		554,295			554,295
KB PF 3rd Co., Ltd. 1		—		—		60,371		(16,590	)		(16,590	)
Able Beomeo-one Co., Ltd.		31,314,357		31,528,461		1,740,919		(149,114	)		(149,114	)
Able Yucheon 1st Co., Ltd. 1		—		—		1,189,618		70,338			70,338
KB Infra 2nd Co., Ltd.		25,913,932		25,600,000		3,554,664		2,449,424			2,449,424
KB Illite 1st. Co., Ltd. 1		—		—		62,662		42,928			42,928
Newstar Sina Co., Ltd.		26,169,067		26,777,858		3,461,385		(239,635	)		(239,635	)
KB Gold 1st Co., Ltd.		19,649,512		19,634,471		1,052,179		(24,389	)		(24,389	)
Inspire Gold 2nd Co., Ltd.		6,511,331		6,724,045		414,404		81,999			81,999
Able MK 1st Co., Ltd.		16,028,254		16,129,707		542,536		(62,319	)		(62,319	)
Yeoksam The Gallery KB 1st Co., Ltd. 1		—		—		247,250		107,440			107,440
Able Hagunri 2nd Co., Ltd. 1		—		—		219,746		(222,462	)		(222,462	)
Able Hagunri 1st Co., Ltd. 1		—		—		607,111		(461,916	)		(461,916	)
Newstar Gimpo 4th Co., Ltd.		7,454,744		7,463,615		1,563,374		(8,881	)		(8,881	)
Mobius 1st Co., Ltd. 1		—		—		3,492,403		(1,471,211	)		(1,471,211	)
Able Wonsi 1st Co., Ltd.		14,559,454		15,357,586		613,555		(798,134	)		(798,134	)
HD Value 1st Co., Ltd.		103,745,143		103,754,543		3,401,791		(9,410	)		(9,410	)
Able iFood Co., Ltd. 1		—		—		192,877		(67,044	)		(67,044	)
Powerplay 1st Co., Ltd.		936,550		648,510		315,472		288,040			288,040
Able Dosan 1st Co., Ltd.		30,776,101		30,561,669		3,121,893		214,432			214,432
Newstar Gimpopoongmoo Co., Ltd.		12,963,604		12,803,820		831,422		159,774			159,774

Table of Contents

KB SECURITIES CO., LTD. and Subsidiaries

Notes to the Consolidated Financial Statements

December 31, 2023 and 2022


(in thousands of Korean won)	December 31, 2022				2022
Name of subsidiary	Assets		Liabilities		Operating profit		Profit (loss) for the year			Total comprehensive income(loss)
Able Eunhwasam 1st Co., Ltd. 1		—		—		95,517		(593,461	)		(593,461	)
Able Maseok 1st Co., Ltd.		37,001,664		37,302,631		1,797,458		(300,967	)		(300,967	)
TW Seocho 1st Co., Ltd.		127,729,286		127,959,304		7,129,984		(230,020	)		(230,020	)
TW Seocho 2nd Co., Ltd.		31,151,796		31,501,706		2,433,454		(349,911	)		(349,911	)
HJ Galaxy 2nd Co., Ltd. 1		—		—		4		(2,469,661	)		(2,469,661	)
HJ Galaxy 1st Co., Ltd. 1		—		—		4		(2,469,661	)		(2,469,661	)
Newstar Wave 1st Co., Ltd.		82,544,796		83,330,039		2,943,812		(785,244	)		(785,244	)
Lamdamine 1st Co., Ltd.		116,843,965		116,990,938		5,880,378		(146,983	)		(146,983	)
Able Cheongdam 1st Co., Ltd. 1		—		—		38,500		(1,535,710	)		(1,535,710	)
Able Next 1st Co., Ltd.		19,966,621		20,958,379		646,331		(991,759	)		(991,759	)
Able Dongil 1st Co., Ltd.		34,259,463		34,383,502		1,046,244		(124,039	)		(124,039	)
KB Infra 3rd Co., Ltd. 1		—		—		20,360,506		546,464			546,464
Newstar Shiny 1st Co., Ltd.		11,617,906		11,814,211		3,251,029		(196,305	)		(196,305	)
Newstar Enerbil 1st Co., Ltd.		100,745,544		100,928,150		4,195,532		(182,607	)		(182,607	)
YSMC 1st Co., Ltd.		48,024,951		48,917,200		485,395		(892,251	)		(892,251	)
HJ Galaxy 3rd Co., Ltd.		46,923,255		46,693,790		2,153,728		229,463			229,463
KB SmartSchool 1st Co., Ltd.		19,882,283		20,346,849		830,186		(464,567	)		(464,567	)
Bighouse 7th Co., Ltd.		128,038,169		129,023,438		5,469,280		(985,271	)		(985,271	)
Newstar Energy 1st Co., Ltd.		141,323,880		146,942,708		4,235,971		(5,618,829	)		(5,618,829	)
Gyeongsan Logis 1st Co., Ltd.		5,699,700		5,142,180		1,109,798		557,521			557,521
Stoke 2nd Corp		68,517,144		67,873,346		3,617,438		643,797			643,797
KB Samyoung Co., Ltd.		6,127,059		6,100,421		253,579		26,637			26,637
KB Global Contents Private Investment Fund		16,269,051		62,384		3,665		(293,332	)		(293,332	)
Able Sungsoo 1st Co., Ltd. 1		—		—		118,634		(307,677	)		(307,677	)
Newstar Seongnam 1st Co., Ltd.		19,861,686		19,568,965		1,269,626		292,711			292,711
KPS Sihwa 1st Co., Ltd.		111,513,923		107,944,392		8,827,790		3,569,530			3,569,530
KB Baegun 1st Co., Ltd. 1		—		—		91,672		(165,149	)		(165,149	)
KB NY 1st Co., Ltd.		89,697,004		91,404,086		2,057,296		(1,707,083	)		(1,707,083	)
GDIC 2nd Co., Ltd.		28,393,137		28,901,165		829,935		(508,029	)		(508,029	)
Newstar NRB First Co., Ltd.		23,379,924		25,188,216		959,720		(1,808,302	)		(1,808,302	)
Able Dongtan 1st Co., Ltd.		41,734,980		42,606,597		2,157,554		(871,617	)		(871,617	)
Galaxy properties SA 1		—		—		—		—			—
Newstar Gimpo 5th Co., Ltd.		738,430		2,219,448		3,306,120		(1,481,028	)		(1,481,028	)
Polar EH 1st Co., Ltd 1		—		—		—		—			—
Polar EH 2nd Co., Ltd 1		—		—		—		—			—
ABR Mareuk 1st Co., Ltd 1		—		—		—		—			—
Able Guwol 1st Co., Ltd. 1		—		—		—		—			—
Newstar Gimpo 2nd Co., Ltd. 1		—		—		—		—			—
Able Hyosung 1st Co., Ltd. 1		—		—		—		—			—
Intgreen 1st Inc. 1		—		—		—		—			—
Able Pocheon 1st Co., Ltd. 1		—		—		—		—			—
Newstar Seotan Co., Ltd. 1		—		—		—		—			—
Unbroken 1st Co., Ltd. 1		—		—		—		—			—
Able Yongdap 1st Co., Ltd. 1		—		—		—		—			—
Inspire Gold 1st Co., Ltd. 1		—		—		—		—			—
Y Three Ulsan Sinjeong 1st Co., Ltd. 1		—		—		—		—			—
498 Seventh KOR Holdco LP 1		—		—		—		—			—
498 Seventh KOR LLC 1		—		—		—		—			—
Multiasset PR Private Fund 4 1		—		—		—		—			—
GVA Europe Pre-IPO Private Investment Trust No.1		29,981,695		21,250		5,910		(39,555	)		(39,555	)
LIFE Global Reits Pre-IPO General Private Investment Trust 1		59,725,094		40,778		3,145		(85,683	)		(85,683	)
KB KBSTAR US Short-Term IG Corporate Bond ETF		79,748,964		32,248		1,469,729		(3,783,284	)		(3,783,284	)
Newstar Everyday 1st Co., Ltd. 1		—		—		93,622		(43,869	)		(43,869	)

Table of Contents

KB SECURITIES CO., LTD. and Subsidiaries

Notes to the Consolidated Financial Statements

December 31, 2023 and 2022


(in thousands of Korean won)	December 31, 2022				2022
Name of subsidiary	Assets		Liabilities		Operating profit		Profit (loss) for the year			Total comprehensive income(loss)
Cassiopeia 1st Co., Ltd.		30,678,964		30,909,850		646,125		(230,886	)		(230,886	)
Able Banpo 1st Co., Ltd.		17,117,224		17,316,738		604,933		(199,514	)		(199,514	)
Able Banpo 2nd Co., Ltd.		10,852,267		11,029,704		289,383		(177,437	)		(177,437	)
Able Gyeonggi Gwangju 1st Co., Ltd.		41,299,147		41,679,524		917,840		(380,379	)		(380,379	)
Newstar Byeongjeom 1st Co., Ltd.		51,336,358		51,495,155		1,540,423		(158,806	)		(158,806	)
Piggarden 1st Co., Ltd.		51,230,153		51,542,651		134,894		(312,508	)		(312,508	)

1	These companies are excluded from subsidiaries as at December 31, 2022.

The details of changes in scope for consolidation for the year ended December 31, 2023, are as follows:

(a)	Subsidiaries newly included in the consolidation


Name of entity		Reason
Newstar copper 2nd Co., Ltd.		Holding power over the relevant activities in the event of default and being a provider of credit facilities or purchase commitments, or being exposed to significant variable gains from the acquisition of subordinated bonds.
Newstar copper 3rd Co., Ltd.
Able alpha Co., Ltd.
Newstar one-firm 2023-1 1st. Co., Ltd.
Newstar one-firm 2023-1 3rd. Co., Ltd.
Newstar one-firm 2023-1 4th. Co., Ltd.
Newstar one-firm 2023-1 5th. Co., Ltd.
K-1 23th Yeoksam Real Estate Investment Trust Company
French Shine 1st Co., Ltd.
Themis 1st Co., Ltd.
Able Yongdap 2nd Co., Ltd.
Shinhan Motor Term Loan B 1st Co., Ltd.
Global Funding Segregated Portfolio Co.
Able Bonri 1st Co., Ltd.
Newstar JH Center Co., Ltd.
Able TY 1st Co., Ltd.
Able TY 2nd Co., Ltd.
Able Eunhwasam 2nd Co., Ltd.
Newstar Yangju Station 1st Co., Ltd.
Able Chowall 2nd Co., Ltd.
Newstar Sina Co., Ltd.
Star-Lord Alpha Flux General Investors Private Real Estate Investment Company No.11		Holding power over the related activities of subsidiaries and being exposed to significant variable profits
K-1 23th Yeoksam Real Estate Investment Trust Company
KB Securities ESG Value Enhancement Fund
CapitaLand Korea General Investors Private Real Estate Investment Trust No.1

Table of Contents

KB SECURITIES CO., LTD. and Subsidiaries

Notes to the Consolidated Financial Statements

December 31, 2023 and 2022

(b)	Subsidiaries excluded from the consolidation


Name of entity		Reason
Able Dongil 1st Co., Ltd		End of payment guarantee contract
Newstar Byeongjeom 1st Co., Ltd.		End of payment guarantee contract
Able Wonsi 1st Co., Ltd.		End of Loan contract
Newstar Shiny 1st Co., Ltd.		End of payment guarantee contract
Newstar Gimpopoongmoo Co., Ltd.		End of payment guarantee contract
Able Gyeonggi Gwangju 1st Co., Ltd.		End of payment guarantee contract
Cassiopeia 1st Co., Ltd.		End of payment guarantee contract
HJ Galaxy 3rd Co., Ltd.		End of payment guarantee contract
KB KBSTAR US Short-Term IG Corporate Bond ETF		Disposal
Paradise Yeongjong 2nd Co., Ltd.		End of payment guarantee contract
Piggarden 1st Co., Ltd.		End of payment guarantee contract
Able Sky 1st Co., Ltd.		End of payment guarantee contract
Newstar Energy 1st Co., Ltd.		End of payment guarantee contract
FN Gasan 1st Co., Ltd.		End of payment guarantee contract
Inspire Gold 2nd Co., Ltd.		End of payment guarantee contract
KB NY 1st Co., Ltd.		End of payment guarantee contract
Hanwha US Equity Strategy Private Real Estate Fund 3		Disposal
Able Poongdong 1st Co., Ltd.		End of payment guarantee contract
DAOL KTB Aircraft Private Investment Trust No.21-1		Disposal
Able TY 1st Co., Ltd.		End of payment guarantee contract
Songdo PFive 2nd Co., Ltd		End of payment guarantee contract
Able Chowall 1st Co., Ltd.		End of payment guarantee contract
Beckett Acquisition Limited		End of power over relevant activities of subsidiaries
Lumen International Developments		Disposal
VREF Shaftesbury ScSp		Disposal
Newstar copper 2nd Co., Ltd.		End of power over relevant activities of subsidiaries
Newstar copper 3rd Co., Ltd.		End of power over relevant activities of subsidiaries
Global Funding Segregated Portfolio Co.		End of power over relevant activities of subsidiaries
Themis 1st Co., Ltd.		End of power over relevant activities of subsidiaries
Shinhan Motor Term Loan B 1st Co., Ltd.		End of power over relevant activities of subsidiaries

Table of Contents

KB SECURITIES CO., LTD. and Subsidiaries

Notes to the Consolidated Financial Statements

December 31, 2023 and 2022

2. Material Accounting Policies

The material accounting policies applied in the preparation of these consolidated financial statements are set out below. These policies have been consistently applied to all the years presented, unless otherwise stated.

2.1 Basis of Preparation

The Group maintains its accounting records in Korean won and prepares statutory consolidated 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 consolidated financial statements have been condensed, restructured and translated into English from the Korean language financial statements.

Certain information attached to the Korean language financial statements, but not required for a fair presentation of the Group’s financial position, financial performance or cash flows, is not presented in the accompanying consolidated financial statements.

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

The consolidated financial statements have been prepared on the historical cost basis except for the following items:

•

Certain financial assets and liabilities (including derivatives instruments), certain classes of property, plant and equipment and investment properties measured at fair value

•

Assets held for sale measured at fair value less costs to sell, and

•

Defined benefit obligation and plan assets measured at fair value

The preparation of the consolidated financial statements requires the use of certain significant accounting estimates. Management also needs to exercise judgement in applying the Group’s accounting policies. The areas involving a higher degree of judgment or complexity, or areas where assumptions and estimates are significant to the consolidated financial statements are disclosed in Note 3.

2.2 Changes in Accounting Policy and Disclosures

2.2.1 New and amended standards adopted by the Group

The Group has applied the following amended standards for the first time for its annual reporting period commencing January 1, 2023.

•

Amendments to Korean IFRS No.1001 Presentation of Financial Statements – Accounting Policy Disclosure

The amendments require an entity to define and disclose its material accounting policy information (material accounting policy information means the level that has effects on the decision-making of the primary users of the financial statements, combined with other information contained in financial statements). These amendments do not have a significant impact on the consolidated financial statements.

Table of Contents

KB SECURITIES CO., LTD. and Subsidiaries

Notes to the Consolidated Financial Statements

December 31, 2023 and 2022

•

Amendments to Korean IFRS No.1001 Presentation of Financial Statements—Disclosure of gains or losses on valuation of financial liabilities with exercise price adjustment conditions

The amendments require disclosures about the book amount and gains or losses on valuation occurred during the reporting period, if all or part of the financial instrument whose exercise price is adjusted due to the issuers’ stock price fluctuations, is classified as financial liabilities. These amendments do not have a significant impact on the consolidated financial statements.

•

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

The amendments introduce the definition of accounting estimates and clarify how to distinguish changes in accounting estimates from changes in accounting policies. These amendments do not have a significant impact on the consolidated financial statements.

•

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

The amendments narrow the scope of the deferred tax recognition exemption so that it no longer applies to transactions that, on initial recognition, give rise to equal taxable and deductible temporary differences. These amendments do not have a significant impact on the consolidated financial statements.

•

Enactment of Korean IFRS No.1117 Insurance Contract

Korean IFRS No.1117, ‘Insurance Contracts’, which replaces Korean IFRS No.1104, ‘Insurance Contracts’, is effective for fiscal years beginning on or after January 1, 2023. The main features of Korean IFRS No.1117 are the estimation of all cash flows according to insurance contracts, measurement of insurance liabilities using a discount rate that reflects assumptions and risks at the reporting date, and recognition of revenue on an accrual basis by reflecting the services (insurance coverage) provided to policyholders each fiscal year. In addition, investment elements (surrender/maturity refund) paid to policyholders regardless of insurance events are excluded from insurance profits, and insurance profit and loss and investment profit and loss are displayed separately so that primary users of financial statements can check the source of profit and loss. The enactment of this standard does not have a significant impact on the consolidated financial statements.

•

Amendments to Korean IFRS No. 1012 Income Taxes – Pillar 2 model rules for reforming international taxation

This amendments temporarily exempt the accounting treatment of deferred tax arising from the enforcement of laws reflecting the Pillar 2 model rules for reforming international taxation of multinational companies and require disclosure of related current corporate tax effects. Analysing the impact of the amendments to this standard on the consolidated financial statements is in progress.

Table of Contents

KB SECURITIES CO., LTD. and Subsidiaries

Notes to the Consolidated Financial Statements

December 31, 2023 and 2022

2.2.2 The following amended standards have been published that are not mandatory for December 31, 2023 reporting periods and have not been early adopted by the Group.

•

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

The amendments clarify that liabilities are classified as either current or non-current, depending on the substantive rights that exist at the end of the reporting period. Classification is unaffected by the likelihood that an entity will exercise the right to defer settlement of the liability or the management’s expectations thereof. Also, the settlement of liability includes the transfer of the entity’s own equity instruments; however, it would be excluded if an option to settle the liability by the transfer of the entity’s own equity instruments is recognized separately from the liability as an equity component of a compound financial instrument. In addition, agreements that the Group must comply with after the end of the reporting period do not affect the classification of the relevant liabilities at the end of the reporting period; further, if liabilities that must comply with agreements within 12 months after the reporting period are classified as non-current liabilities as of the end of the reporting period, the entity should disclose the risk that the liabilities may be repaid within 12 months after the reporting period. The amendments should be applied for annual reporting periods beginning on or after January 1, 2024, and earlier application is permitted. The Group does not expect that these amendments have a significant impact on the consolidated financial statements.

•

Amendments to Korean IFRS No.1007 Cash flow statements and Korean IFRS No.1107 Financial Instruments—Disclosure — Disclosure of information of supplier finance Arrangements

The amendments request that if the supplier finance arrangements are applied, information on the supplier finance arrangements must be disclosed so that users of financial statements can evaluate the impact of the supplier finance arrangements on the company’s liabilities, cash flow, and liquidity risk exposure. The amendments should be applied for annual reporting periods beginning on or after January 1, 2024, and earlier application is permitted. The Group does not expect that these amendments have a significant impact on the consolidated financial statements.

•

Amendments to Korean IFRS No.1116 Leases – Lease liabilities arising from sale and leaseback

The amendments clarify the method of subsequently measuring the lease liability arising from a sale and leaseback, the lease fee or modified lease fee is calculated in a manner that does not recognize the profit or loss related to the usage rights held by the seller-lessee. The amendments should be applied for annual reporting periods beginning on or after January 1, 2024, and earlier application is permitted. The Group does not expect that these amendments have a significant impact on the consolidated financial statements.

•

Amendments to Korean IFRS No. 1001 Presentation of Financial Statements –Disclosure of virtual assets

The amendments clarify additional disclosure requirements in the case of holding virtual assets or holding virtual assets on behalf of customers or issuing virtual assets. The amendments should be applied for annual reporting periods beginning on or after January 1, 2024, and earlier application is permitted. The Group does not expect that these amendments have a significant impact on the consolidated financial statements.

Table of Contents

KB SECURITIES CO., LTD. and Subsidiaries

Notes to the Consolidated Financial Statements

December 31, 2023 and 2022

2.3 Consolidation

The Group has prepared the consolidated financial statements in accordance with Korean IFRS No.1110 Consolidated Financial Statements.

(a)	Subsidiaries

Subsidiaries are all entities over which the Group has control. The Group controls an entity when the Group is exposed to, or has rights to, variable returns from its involvement with the entity and has the ability to affect those returns through its power to direct the activities of the entity. Subsidiaries are fully consolidated from the date on which control is transferred to the Group. They are deconsolidated from the date that control ceases.

The acquisition method of accounting is used to account for business combinations by the Group. The consideration transferred is measured at the fair values of the assets transferred, and identifiable assets acquired and liabilities and contingent liabilities assumed in a business combination are measured initially at their fair values at the acquisition date. The Group recognizes any non-controlling interest in the acquired entity on an acquisition-by-acquisition basis either at fair value or at the non-controlling interest’s proportionate share of the acquired entity’s net identifiable assets. All other non-controlling interests are measured at fair values, unless otherwise required by other standards. Acquisition-related costs are expensed as incurred.

Meanwhile, the Group applies the book-value method to account for business combinations of entities under common control. Identifiable assets acquired and liabilities assumed in a business combination are measured at their book values on the consolidated financial statements of the ultimate parent entity. In addition, the difference between the sum of consolidated book values of the assets and liabilities transferred and accumulated other comprehensive income; and the consideration paid is recognized as capital surplus.

The excess of consideration transferred, amount of any non-controlling interest in the acquired entity and acquisition-date fair value of any previous equity interest in the acquired entity over the fair value of the net identifiable assets acquired is recorded as goodwill. If those amounts are less than the fair value of the net identifiable assets of the business acquired, the difference is recognized directly in the profit or loss as a bargain purchase.

Intergroup transactions, balances and unrealized gains on transactions between group companies are eliminated. Unrealized losses are also eliminated unless the transaction provides evidence of an impairment of the transferred asset. Accounting policies of subsidiaries have been changed where necessary to ensure consistency with the policies adopted by the Group.

(b)	Associates

Associates are entities over which the Group has significant influence but not control or joint control. Investments in associates are accounted for using the equity method of accounting, after initially being recognized at cost. Unrealized gains on transactions between the Group and its associates are eliminated to the extent of the Group’s interest in the associates. If the Group’s share of losses of an associate equals or exceeds its interest in the associate (including long-term interests that, in substance, form part of the Group’s net investment in the associate), the Group discontinues recognizing its share of further losses. After the Group’s interest is reduced to zero, additional losses are provided for, and a liability is recognized, only to the extent that the Group has incurred legal or constructive obligations or made payments on behalf of the associate.

If there is objective evidence of impairment on the investment in the associate, the Group recognizes the difference between the recoverable amount of the associate and its book amount as impairment loss.

Table of Contents

KB SECURITIES CO., LTD. and Subsidiaries

Notes to the Consolidated Financial Statements

December 31, 2023 and 2022

If an associate uses accounting policies other than those of the Group for the identical transactions and events in similar circumstances, if necessary, adjustments shall be made to make the associate’s accounting policies conform to those of the Group when the associate’s financial statements are used by the Group in applying the equity method.

(c)	Joint Arrangements

A joint arrangement, wherein two or more parties have joint control, is classified as either a joint operation or a joint venture. A joint operator has rights to the assets, and obligations for the liabilities, relating to the joint operation and recognizes the assets, liabilities, revenues and expenses relating to its interest in a joint operation. A joint-venturer has rights to the net assets relating to the joint venture and accounts for that investment using the equity method.

2.4 Foreign Currency Translation

(a) Functional and presentation currency

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

(b) Transactions and balances

Foreign currency transactions are translated into the functional currency using the exchange rates prevailing at the dates of the transactions or valuation where items are remeasured. Foreign exchange gains and losses resulting from the settlement of such transactions and from the translation at year-end exchange rates of monetary assets and liabilities denominated in foreign currencies are recognized in profit or loss. They are deferred in other comprehensive income if they relate to qualifying cash flow hedges and qualifying effective portion of hedge of net investments in foreign operations, or are attributable to monetary part of the net investment in a foreign operation.

Non-monetary items that are measured at fair value in a foreign currency are translated using the exchange rates at the date when the fair value was determined. Translation differences on assets and liabilities carried at fair value are reported as part of the fair value gain or loss. For example, translation differences on non-monetary assets and liabilities such as equities held at fair value through profit or loss are recognized in profit or loss as part of the fair value gain or loss and translation differences on non-monetary assets such as equities held at fair value through other comprehensive income are recognized in other comprehensive income.

2.5 Recognition and Measurement of Financial Instruments

2.5.1 Classification

The Group classifies financial assets as follows.

•

Those to be measured at fair value (through profit or loss or other comprehensive income)

•

Those to be measured at amortised cost

The classification depends on the Group’s business model for managing the financial assets and the contractual terms of the cash flows.

For financial assets measured at fair value, gains and losses will either be recorded in profit or loss or other comprehensive income. For investments in debt instruments, this will depend on the business model in which the investment is held. The Group reclassifies debt investments when, and only when its business model for managing those assets changes.

Table of Contents

KB SECURITIES CO., LTD. and Subsidiaries

Notes to the Consolidated Financial Statements

December 31, 2023 and 2022

For investments in equity instruments that are not held for trading, this will depend on whether the Group has made an irrevocable election at the time of initial recognition to account for the equity investment at fair value through other comprehensive income. Changes in fair value of non-designated equity investment are recognized in profit or loss.

2.5.2 Measurement

At initial recognition, the Group measures a financial asset at its fair value plus, in the case of a financial asset not at fair value through profit or loss, transaction costs that are directly attributable to the acquisition of the financial asset. Transaction costs of financial assets carried at fair value through profit or loss are expensed in profit or loss.

Financial assets with embedded derivatives are considered in their entirety when determining whether their cash flows are solely payment of principal and interest.

2.5.2.1 Debt instruments

Subsequent measurement of debt instruments depends on the Group’s business model for managing the asset and the cash flow characteristics of the asset. The Group classifies its debt instruments into one of the following three measurement categories:

(a)	Amortised cost

Assets that are held for collection of contractual cash flows where those cash flows represent solely payments of principal and interest are measured at amortised cost. A gain or loss on a debt investment that is subsequently measured at amortised cost and is not part of a hedging relationship is recognized in profit or loss when the asset is derecognized or impaired. Interest income from these financial assets is included in ‘interest income’ using the effective interest rate method.

(b)	Fair value through other comprehensive income

Assets that are held for collection of contractual cash flows and for selling the financial assets, where the assets’ cash flows represent solely payments of principal and interest, are measured at fair value through other comprehensive income. Movements in the carrying amount are taken through other comprehensive income, except for the recognition of impairment loss (reversal of impairment loss), interest income and foreign exchange gains and losses which are recognized in profit or loss. When the financial asset is derecognized, the cumulative gain or loss previously recognized in other comprehensive income is reclassified from equity to profit or loss. Interest income from these financial assets is included in ‘interest income’ using the effective interest rate method. Foreign exchange gains and losses are presented in ‘gain or loss on foreign currency transaction’ and impairment losses are presented in ‘loss on valuation and disposal of financial instrument’.

(c)	Fair value through profit or loss

Assets that do not meet the criteria for amortised cost or fair value through other comprehensive income are measured at fair value through profit or loss. A gain or loss on a debt investment that is subsequently measured at fair value through profit or loss and is not part of a hedging relationship is recognized in profit or loss and presented net in the statement of profit or loss within ‘gain or loss on valuation and disposal of financial instrument’ in the year in which it arises.

Table of Contents

KB SECURITIES CO., LTD. and Subsidiaries

Notes to the Consolidated Financial Statements

December 31, 2023 and 2022

2.5.2.2 Equity instruments

The Group subsequently measures all equity investments at fair value. Where the Group’s management has elected to present fair value gains and losses on equity investments in other comprehensive income, there is no subsequent reclassification of fair value gains and losses to profit or loss following the derecognition of the investment. Dividend income from such investments continues to be recognized in profit or loss when the right to receive payments is established.

Changes in the fair value of financial assets at fair value through profit or loss are recognized in ‘gain or loss on valuation and disposal of financial instrument’ in the statement of profit or loss. Impairment loss (reversal of impairment loss) on equity investments measured at fair value through other comprehensive income are not reported separately from other changes in fair value.

2.5.3 Impairment

The Group assesses on a forward-looking basis expected credit losses associated with its debt instruments carried at amortised cost and fair value through other comprehensive income. The impairment methodology applied depends on whether there has been a significant increase in credit risk.

Expected credit losses are a probability-weighted estimate of credit losses (i.e. the present value of all cash shortfalls) over the expected life of the financial instrument. The Group measures expected credit losses by reflecting reasonable and supportable information that is reasonably available at the reporting date without undue cost or effort, including information about past events, current conditions and forecasts of future economic conditions.

The Group uses the following three measurement techniques in accordance with Korean IFRS:

•

General approach: for financial assets and off-balance-sheet unused credit line that below two approaches are not applied

•

Simplified approach: for receivables, contract assets and lease receivables

•

Credit-impaired approach: for purchased or originated credit-impaired financial assets

Different measurement approaches are applied depending on significant increase in credit risk. 12 month expected credit losses is recognized when credit risk has not significantly increased since initial recognition. A loss allowance at an amount equal to lifetime expected credit losses is recognized when credit risk has significantly increased since initial recognition. Lifetime is presumed to be a period to the contractual maturity date of a financial asset (the expected life of the financial asset).

The Group determines whether the credit risk has increased significantly since initial recognition using the following information. One or more of the following circumstances is deemed significant increase in credit risk.

•

More than 30 days past due;

•

Decline in credit rating at period end by more than certain notches as compared to that at initial recognition;

•

Decline in ratings below certain level in the early warning system;

Under simplified approach, the Group shall always measure the loss allowance at an amount equal to lifetime expected credit losses. Under credit-impaired approach, the Group shall only recognize the cumulative changes in lifetime expected credit losses since initial recognition as a loss allowance for purchased or originated credit-impaired financial assets.

The Group generally deems credit-impaired in case of one or more of the following circumstances:

•

90 days or more past due;

•

Legal proceedings related to collection;

•

Refinancing;

•

Corporate borrowers that are rated C or D;

•

Debt restructuring.

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KB SECURITIES CO., LTD. and Subsidiaries

Notes to the Consolidated Financial Statements

December 31, 2023 and 2022

2.5.3.1 Forward-looking information

The Group uses forward-looking information, when it determines whether the credit risk has increased significantly since initial recognition and measures expected credit losses.

The Group assumes the risk component has a certain correlation with the business cycle, and calculates the expected credit loss by reflecting the forward-looking information with macroeconomic variables on the measurement inputs.

Forward-looking information used in calculation of expected credit loss is derived after comprehensive consideration of a variety of factors including scenario in management planning, risk situation scenario for stress test, third party forecast, and others.

2.5.3.2 Measuring expected credit losses on financial assets at amortised cost

The amount of the loss on financial assets at amortised cost is measured as the difference between the asset’s carrying amount and the present value of estimated future cash flows discounted at the financial asset’s original effective interest rate. The Group estimates expected future cash flows for financial assets that are individually significant (individual assessment of impairment).

For financial assets that are not individually significant, the Group collectively estimates expected credit loss by grouping loans with homogeneous credit risk profile (collective assessment of impairment).

•

Individual assessment of impairment

Individual assessment of impairment losses are calculated using management’s best estimate on present value of expected future cash flows. The Group uses all the available information including operating cash flow of the borrower and net realizable value of any collateral held.

•

Collective assessment of impairment

Collective assessment of loss allowance involves historical loss experience along with incorporation of forward-looking information. Such process incorporates factors such as type of collateral, product and borrowers, credit rating, size of portfolio and recovery period and applies ‘probability of default’ (PD) on a company of assets and ‘loss given default’ (LGD) by type of recovery method. Also, the expected credit loss model involves certain assumption to determine input based on loss experience and forward-looking information. These models and assumptions are periodically reviewed to reduce gap between loss estimate and actual loss experience.

2.5.3.3 Measuring expected credit losses on financial assets at fair value through other comprehensive income

Measuring method of expected credit losses on financial assets at fair value through other comprehensive income is equal to the method of financial assets at amortised cost, except for loss allowances that are recognized as other comprehensive income. Amounts recognized in other comprehensive income for sale or repayment of financial assets at fair value through other comprehensive income are reclassified to profit or loss.

2.5.4 Recognition and Derecognition

Regular way purchases and sales of financial assets are recognized or derecognized on trade-date, the date on which the Group commits to purchase or sell the asset. Financial assets are derecognized when the rights to receive cash flows from the financial assets have expired or have been transferred and the Group has transferred substantially all the risks and rewards of ownership.

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KB SECURITIES CO., LTD. and Subsidiaries

Notes to the Consolidated Financial Statements

December 31, 2023 and 2022

If a transfer does not result in derecognition because the Group has retained substantially all the risks and rewards of ownership of the transferred asset, the Group continues to recognize the transferred asset in its entirety and recognizes a financial liability for the consideration received. The Group classified the financial liability as “borrowings” in the statement of financial position.

The Group writes off the carrying amount and allowance of financial assets in its entirety or to a portion thereof when the principal and interest are determined to be no longer recoverable. In general, the Group considers write-off when it is determined that the debtor does not have sufficient resources or income to cover the principal and interest, and this write-off decision is made in accordance with internal regulations.

2.5.5 Offsetting of financial instruments

Financial assets and liabilities are offset and the net amount reported in the statements of financial position where there is a legally enforceable right to offset the recognized amounts and there is an intention to settle on a net basis or realize the assets and settle the liability simultaneously. The legally enforceable right must not be contingent on future events and must be enforceable in the normal course of business and in the event of default, insolvency or bankruptcy of the Group or the counterparty.

2.6 Financial Liabilities

2.6.1 Classification and Measurement

The Group classifies non-derivative financial liabilities, except for financial liabilities at fair value through profit or loss, financial guarantee contracts and financial liabilities that arise when a transfer of financial assets does not qualify for derecognition, as financial liabilities carried at amortised cost and present as ‘deposits liabilities’, ‘borrowings’, and ‘other financial liabilities’ in the statement of financial position.

2.6.2 Derecognition

Financial liabilities are removed from the statement of financial position when it is extinguished; for example, when the obligation specified in the contract is discharged or canceled or expired or when the terms of an existing financial liability are substantially modified. The difference between the carrying amount of a financial liability extinguished or transferred to another party and the consideration paid (including any non-cash assets transferred or liabilities assumed) is recognized in profit or loss.

The Group’s financial liabilities at fair value through profit or loss are financial instruments held for trading. A financial liability is held for trading if it is incurred principally for the purpose of repurchasing in the near term. A derivative that is not a designated as hedging instruments and an embedded derivative that is separated are also classified as held for trading. Financial liabilities designated the financial liabilities at fair value through profit or loss is the structured financial liabilities containing embedded derivatives issued by the Group.

The changes in fair value of financial liabilities at fair value through profit or loss due to the change of credit risk is recognized as other comprehensive income(instead of profit and loss) and this other comprehensive income can not be transferred to profit and loss in subsequent events.

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KB SECURITIES CO., LTD. and Subsidiaries

Notes to the Consolidated Financial Statements

December 31, 2023 and 2022

2.7 Derivative Financial Instruments

The Group enters into numerous derivative financial instrument contracts such as stock options, stock swaps, interest rate swaps and others for trading purposes or sale and issue of derivative combined securities. These derivative financial instruments are presented as derivative financial instruments within the financial statements irrespective of transaction purpose and subsequent measurement requirement.

Derivatives are initially recognized at fair value on the date a derivative contract enters into and are subsequently re-measured at their fair value. The changes of the fair value of derivatives financial instruments held for trading are recognized in profit or loss as ‘gain or loss on valuation and disposal of financial instrument’.

Fair value of derivative instrument traded in active market is a quoted price. In case of fair value of relatively simple derivative instruments such as options, interest rate or currency swaps and others is calculated using one or more valuation techniques like cash flow discount model, option pricing model which is based on observable data and appropriate considering the nature of objects.

Also, fair value of more complex derivative instrument is calculated using valuation techniques based on unobservable data in the market. The accuracy of the valuation techniques is approved by periodical review.

2.7.1 Day 1 Profit and Loss

Accordance with Korean IFRS, if there is no available price from active market and if the Group uses a valuation technique that uses unobservable valuation parameters from market for the fair value at initial recognition of financial instruments, there could be a difference between the transaction price and the amount determined using that valuation technique. In these circumstances, the fair value of financial instruments is recognized as the transaction price and the difference is amortised by using the straight line method over the life of the financial instruments.

2.7.2 Credit risk adjustments

In case of exchange-traded derivative instrument, credit risk is not reflected on the fair value because exchange-traded derivative instrument is traded in public exchange, and it is not available to identify certain counterparties. Fair value of OTC derivative instrument only reflects credit risk.

2.7.3 Hedge accounting

The accounting treatment of changes of fair value for the derivatives varies as the character of hedging items and the purpose of hedging. The Group holds derivative contracts for the purpose of hedging the risk and the Group designates certain derivatives as hedging instruments to hedge the risk as follows.

(a)	Fair value hedge : a hedge of the exposure to changes in fair value of a recognised asset or liability or an unrecognised firm commitment

(b)	Cash flow hedge : a hedge of the exposure to variability in cash flows that is attributable to a particular risk associated with all, or a component of, the recognised asset or liability or a highly probable forecast transaction

(c)	Hedge of net investments in foreign operations

On initial designation of the hedge, the Group formally documents the relationship between the hedging instrument(s) and hedged items, including the risk management objectives and strategy in undertaking the hedge transaction, together with the methods that will be used to assess the effectiveness of the hedging relationship.

The fair value of derivatives for hedge is disclosed in note 37.

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KB SECURITIES CO., LTD. and Subsidiaries

Notes to the Consolidated Financial Statements

December 31, 2023 and 2022

Changes in the fair value of a derivative hedging instrument designated as a fair value hedge are recognized in profit or loss. The gain or loss from remeasuring the hedging instrument at fair value and the gain or loss on the hedged item attributable to the hedged risk are recognized in profit or loss

If the hedge no longer meets the criteria for hedge accounting, the adjustment to the carrying amount of a hedged item is fully amortised to profit or loss by the maturity of the financial instrument using the effective interest method.

The accounting treatments of hedge of net investments in foreign operations are similar to those of cash flow hedge.

If hedging instruments qualify for a hedge of net investments in foreign operations, the effective portion of changes in fair value of hedging instrument is recognized in other comprehensive income or loss and the ineffective portion is recognized in profit or loss. The gain or loss on the hedging instrument relating to the effective portion of the hedge that has been recognized in other comprehensive income will be reclassified from other comprehensive income or loss to profit or loss as a reclassification adjustment on the disposal or partial disposal of the foreign operation.

2.8 Property and Equipment

All property and equipment except for land are recognized at its cost less any accumulated depreciation and any accumulated impairment losses. The cost of property and equipment includes any costs directly attributable to bringing the asset to the location and condition necessary for it to be capable of operating in the manner intended by management and the initial estimate of the costs of dismantling and removing the item and restoring the site on which it is located.

Land is measured at fair value on the basis of the valuation performed by an independent valuer. Revaluations are performed with sufficient regularity to ensure that the carrying amount does not differ materially from that which would be determined using fair value at the end of the reporting period.

If an asset’s carrying amount is increased as a result of a revaluation, the increase is recognized in other comprehensive income and the amount is accumulated in equity under the heading of revaluation surplus after netting deferred tax. However, the increase is recognized in profit or loss to the extent that it reverses a revaluation decrease of the same asset previously recognized in profit or loss. If an asset’s carrying amount is decreased as a result of a revaluation, the decrease is recognized in profit or loss. However, the decrease is recognized in other comprehensive income to the extent of any credit balance existing in the revaluation surplus in respect of that asset. The decrease recognized in other comprehensive income reduces the amount accumulated in equity under the heading of revaluation surplus. The revaluation surplus included in equity in respect of an item of property and equipment is transferred directly to retained earnings when the asset is derecognized.

Depreciation of all property and equipment, except for land, is calculated using the following method to allocate their cost or revalued amounts, net of their residual values, over their estimated useful lives as follows:


Property and equipment	Estimated useful lives	Depreciation method
Buildings	40 years	Straight-line method
Vehicles	4 years	Straight-line method
Furniture and equipment	4 years	Straight-line method
Other	4 years	Straight-line method
Right-of-use assets	1~10 years (initial date of the contract entered into ~ maturity date)	Straight-line method

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KB SECURITIES CO., LTD. and Subsidiaries

Notes to the Consolidated Financial Statements

December 31, 2023 and 2022

The residual value, the useful life and the depreciation method applied to an asset are reviewed at least at each financial year-end and, if needed, the changes are accounted for as a change in an accounting estimate.

2.9 Investment Property

Property held to earn rentals or for capital appreciation or both is classified as investment property. Investment property is measured initially at its cost. After recognition as an asset, investment property is carried at cost less accumulated depreciation and impairment losses. Investment property, except for land, is depreciated using the straight-line method over their useful lives of 40 years.

2.10 Intangible Assets

Intangible assets are measured initially at cost and subsequently carried at their cost less any accumulated amortization and any accumulated impairment losses.

Intangible assets, except for goodwill, comprise software and membership rights, and are amortised using the straight-line method with no residual value over following estimated useful economic life since the asset is available for use. However, goodwill and membership rights are not amortised by considering their useful life as indefinite, because there is no expectable limit to period for use.


Intangible assets	Estimated useful lives	Amortization method
Development costs	4 years	Straight-line method
Software	4 years	Straight-line method

The amortization period and the amortization method for intangible assets with a finite useful life are reviewed at the end of each financial year. The management reviews the useful life of intangible assets that is not being amortised each period to determine whether events and circumstances continue to support an indefinite useful life. If management judges that previous estimates should be adjusted, the change is accounted for as a change in an accounting estimate.

2.11 Impairment of Non-financial Assets

Goodwill or intangible assets with indefinite useful lives are not subject to amortization and are tested annually for impairment. Assets that are subject to amortization are reviewed for impairment whenever events or changes in circumstances indicate that the carrying amount may not be recoverable. An impairment loss is recognized for the amount by which the asset’s carrying amount exceeds its recoverable amount. The recoverable amount is the higher of an asset’s fair value less costs to sell and value in use. Non-financial assets, other than goodwill, that suffered impairment are reviewed for possible reversal of the impairment at the end of each reporting period.

2.12 Lease

Lease income from operating leases where the Group is a lessor is recognized on a straight-line basis over the lease term. Initial direct costs incurred in obtaining an operating lease are added to the carrying amount of the underlying asset and recognized as expense over the lease term on the same basis as lease income. The respective leased assets are included in the statement of financial position based on their nature.

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KB SECURITIES CO., LTD. and Subsidiaries

Notes to the Consolidated Financial Statements

December 31, 2023 and 2022

The Group should assess whether a contract is, or contains a lease at the date the contract entered into and the initial application date under Korean IFRS No.1116. But the Group may elect not to reassess whether a contract is, or contains a lease for the contract entered into before the transition date by applying practical expedient permitted by Korean IFRS No.1116. The Group has gone through all the contract to assess whether the contract is, or contains, a lease at the date the contract entered into after the date of initial application.

A lessee is required to recognize a right-of-use asset (lease asset) representing its right to use the underlying leased asset and a lease liability representing its obligation to make lease payments. Assets and liabilities arising from a lease are initially measured on a present value basis.

Lease liabilities include the net present value of the following lease payments:

•

Fixed payments (including in-substance fixed payments), less any lease incentives receivable

•

Variable lease payment that are based on an index or a rate

•

Amounts expected to be payable by the lessee under residual value guarantees

•

The exercise price of a purchase option if the lessee is reasonably certain to exercise that option, and

•

Payments of penalties for terminating the lease, if the lease term reflects the lessee exercising an option to terminate the lease

The lease payments are discounted using the interest rate implicit in the lease, if that rate can be readily determined. If that rate can not be readily determined, the lessee’s incremental borrowing rate is used, being the rate that the lessee would have to pay to borrow the funds necessary to obtain an asset of similar value to the right-of-use asset in a similar economic environment with similar terms and conditions.

Right-of-use assets are measured at cost comprising the following:

•

The amount of the initial measurement of lease liability

•

Any lease payments made at or before the commencement date less any lease incentives received

•

Any initial direct costs incurred by the lessee, and

•

An estimate of restoration costs

However, short-term lease (lease that, at the commencement date, has a lease term of 12 months or less) and lease of low-value assets (For example, underlying leased asset under $ 5,000) are permitted to elect exceptional conditions.

The right-of-use asset is depreciated over the shorter of the asset’s useful life and the lease term.

Related to sale and leaseback, the Group (seller-lessee) is required to apply the Korean IFRS No.1115 ‘Revenue from Contracts with Customers’ to determine whether the transfer of an asset is accounted for as a sale of that asset. However, the Group shall not reassess sale and leaseback transactions entered into before the date of initial application.

Large number of lease contracts held by the Group have extension option and termination option. These conditions are generally used for maximizing the flexibility of lease operation in a view of managing the contracts. Extension option or termination option included in the lease contracts are generally owned by the Group, not lessor. The Group re-evaluated the lease term of the lease contracts by taking into account the contract type, operation plan for branch offices, and costs related to lease termination . As a result, no significant change in the existing lease term has occurred.

2.13 Provisions

Provisions are measured at the present value of the expenditures expected to be required to settle the obligation and the increase in the provision due to passage of time is recognized as interest expense.

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KB SECURITIES CO., LTD. and Subsidiaries

Notes to the Consolidated Financial Statements

December 31, 2023 and 2022

2.14 Financial Guarantee Contracts

Financial guarantees contracts provided by the Group are initially measured at fair value on the date the guarantee was given. Subsequent to initial recognition, the Group’s liabilities under such guarantees are measured at the higher of the amounts below and recognized as ‘other financial liabilities’:

•

Loss allowance in accordance with Korean IFRS No.1109, ‘Financial Instruments’

•

The amount initially recognized less, when appropriate, the cumulative amount of income recognized in accordance with the principles of Korean IFRS No.1115, ‘Revenue from Contracts with Customers’

2.15 Revenue Recognition

The Group recognizes revenues in accordance with the following five-step revenue recognition standard (Korean IFRS No.1115 Revenue from Contracts with Customers).

•

Step 1: Identify the contract with a customer.

•

Step 2: Identify the performance obligations in the contract.

•

Step 3: Determine the transaction price.

•

Step 4: Allocate the transaction price to the performance obligations in the contract.

•

Step 5: Recognize revenue when (or as) the entity satisfies a performance obligation.

2.16 Employee Benefits

2.16.1 Retirement benefit liabilities: Defined benefit plans and Defined contribution plans

The Group has both defined benefit and defined contribution plans. A defined contribution plan is a pension plan under which the Group pays fixed contributions into a separate entity. The contributions are recognized as employee benefit expenses when an employee has rendered service. A defined benefit plan is a pension plan that is not a defined contribution plan.

Typically defined benefit plans define an amount of pension benefit that an employee will receive on retirement, usually dependent on one or more factors such as age, years of service and compensation. The liability recognized in the statement of financial position in respect of defined benefit pension plans is the present value of the defined benefit obligation at the end of the reporting period less the fair value of plan assets. The defined benefit obligation is calculated annually by independent actuaries using the projected unit credit method. The present value of the defined benefit obligation is determined by discounting the estimated future cash outflows using interest rates of high-quality corporate bonds that have terms to maturity approximating to the terms of the related pension obligation. The remeasurements of the net defined benefit liability are recognized in other comprehensive income.

If any plan amendments, curtailments, or settlements occur, past service costs or any gains or losses on settlement are recognized as profit or loss for the year.

2.16.2 Short-term employee benefits

Short-term employee benefits, which are expected to be settled wholly before 12 months after the end of the annual reporting period in which the employees render the service, are recognized in profit or loss at the undiscounted amount of short-term employee benefits expected to be paid in exchange for that service.

The expected cost of profit-sharing and bonus payments are recognized as liabilities when the Group has a present legal or constructive obligation to make such payments as a result of past events rendered by employees and a reliable estimate of the obligation can be made.

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KB SECURITIES CO., LTD. and Subsidiaries

Notes to the Consolidated Financial Statements

December 31, 2023 and 2022

2.16.3 Share-based payment

The Group is under share-based payment arrangements that grant shares to the executives of the Group. When the arrangements are exercised, the Group provides share or cash equal to the monetary value of the share.

The Group measures the services acquired and the liability incurred at fair value, and the fair value is recognized as expense and accrued expenses over the vesting period. Until the liability is settled, the Group remeasures the fair value of the liability at the end of each reporting period and at the date of settlement, with any changes in fair value recognized in profit or loss as share-based payments.

2.17 Income Tax Expenses

Income tax expense comprises current income tax and deferred income tax and is recognized in profit or loss for the year, except to the extent that the tax arises from (a) a transaction or event which is recognized either in other comprehensive income or directly in equity and (b) a business combination.

2.17.1 Current income tax

Current income tax is the amount of income taxes payable (recoverable) in respect of the taxable profit (tax loss) for a period. A difference between the taxable profit and accounting profit may arise when income or expense is included in accounting profit in one period but is included in taxable profit in a different period. Differences may also arise if there is revenue that is exempt from taxation or expenses that is not deductible in determining taxable profit (tax loss). Current income tax liabilities (assets) for the current and prior periods are measured at the amount expected to be paid to (recovered from) the taxation authorities, using the tax rates (and tax laws) that have been enacted or substantively enacted by the end of the reporting period.

The Group offsets current income tax assets and current income tax liabilities if, and only if, the Group (a) has a legally enforceable right to set off the recognized amounts and (b) intends to settle on a net basis.

2.17.2 Deferred income tax

Deferred income tax is recognized, using the asset-liability method, on temporary differences arising between the tax bases of assets and liabilities and their carrying amount in the financial statements. Deferred income tax liabilities are recognized for all taxable temporary differences and deferred income tax assets are recognized for all deductible temporary differences to the extent that it is probable that taxable profit will be available against which the deductible temporary difference can be utilized. However, deferred income tax liabilities are not recognized if they arise from the initial recognition of goodwill; deferred income tax is not accounted for if it arises from initial recognition of an asset or liability in a transaction other than a business combination that at the time of the transaction affects neither accounting profit nor taxable profit or loss.

Deferred income tax is recognized on temporary differences arising from investments in subsidiaries and associates, except where the timing of the reversal of the temporary difference is controlled by the Group and it is probable that the temporary difference will not reverse in the foreseeable future.

The carrying amount of a deferred income tax asset is reviewed at the end of each reporting period. The Group reduces the carrying amount of a deferred income tax asset to the extent that it is no longer probable that sufficient taxable profit will be available to allow the benefit of part or all of that deferred income tax asset to be utilized.

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KB SECURITIES CO., LTD. and Subsidiaries

Notes to the Consolidated Financial Statements

December 31, 2023 and 2022

Deferred income tax assets and liabilities are measured at the tax rates that are expected to apply to the period when the asset is realized or the liability is settled, based on tax rates (and tax laws) that have been enacted or substantively enacted by the end of the reporting period. The measurement of deferred income tax liabilities and deferred income tax assets reflects the tax consequences that would follow from the manner in which the Group expects, at the end of the reporting period, to recover or settle the carrying amount of its assets and liabilities.

Deferred income tax assets and liabilities are offset when there is a legally enforceable right to offset current tax assets against current tax liabilities and when the deferred income taxes assets and liabilities relate to income taxes levied by the same taxation authority on either the same taxable entity or different taxable entities where there is an intention to settle the balances on a net basis.

Current income tax and deferred income tax are included in the calculation of income tax expense. Income taxes related to prior period are included in current income tax.

Deferred income taxes, recognized directly in equity or arisen from business combination, are directly deducted from equity or goodwill.

2.18 Operating Segment Reporting

Operating segments are components of the Group, about which separate internal reporting information is evaluated regularly by the chief operating decision makers including Board of Directors in deciding how to allocate resources and to assess performance. Each segment is a strategic business unit that offers different products and services, and is managed separately because each business has different risks and opportunities, different technology required and marketing strategies.

Segment information includes the items which are directly attributable and reasonably allocated to the segment.

2.19 Other Receivables and Payables Related to Brokerage Transactions

Regarding customer brokerage transactions, the Group recognizes the receivable from and payable to the Korea Exchange (Clearing and settlement organization) and customers in total amounts, which the Group recognizes as other financial assets and other financial liabilities. The Group offsets the receivable and payable that arise between Korea Exchange and the Group within the same day.

2.20 Business Combinations

The Group applies the book-value method to account for business combinations of entities under common control. Identifiable assets acquired and liabilities assumed in a business combination are measured at their book values on the consolidated financial statements of the ultimate parent entity. In addition, the difference between the sum of book values of the assets and liabilities transferred and accumulated other comprehensive income; and the consideration paid is recognized as capital surplus.

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KB SECURITIES CO., LTD. and Subsidiaries

Notes to the Consolidated Financial Statements

December 31, 2023 and 2022

2.21 Approval of Issuance of the Financial Statements

The issuance of the December 31, 2023 consolidated financial statements of the Group was approved by the Board of Directors on March 6, 2024, which is subject to change with approval at the annual shareholder’s meeting.

3. Critical Accounting Estimates and Assumptions

The preparation of financial statements requires the Group to make estimates and assumptions concerning the future. Management also needs to exercise judgement in applying the Group’s accounting policies. Estimates and assumptions are continually evaluated and are based on historical experience and other factors, including expectations of future events that are believed to be reasonable under the circumstances. As the resulting accounting estimates will, by definition, seldom equal the related actual results, it can contain a significant risk of causing a material adjustment.

The estimates and assumptions that have a significant risk of causing a material adjustment to the carrying amounts of assets and liabilities within the next financial year are addressed below. Additional information of significant judgment and assumptions of certain items are included in relevant notes.

3.1 Income taxes

The Group recorded, based on its best estimate, current taxes and deferred taxes that the Group will be liable in the future for the operating results at the end of the reporting period. However, the final tax outcome in the future may be different from the amounts that were initially recorded. Such differences will impact the current and deferred income tax assets and liabilities in the period in which the final tax outcome is determined.

If certain portion of the taxable income is not used for investments or increase in wages in accordance with the Special Taxation for Facilitation of Investment and Mutually-Beneficial Cooperation, the Group is liable to pay additional income tax calculated based on the tax law. Accordingly, the measurement of current and deferred income tax is affected by the tax effects from such tax law. As the Group’s income tax is dependent on the investments and increase in wages, there exists uncertainty with regard to measuring the final tax effects.

3.2 Fair value of financial instruments

The fair value of financial instruments where no active market exists or where quoted prices are not otherwise available is determined by using valuation techniques. Financial instruments, which are not actively traded in the market and those with less transparent market prices, will have less objective fair values and require broad judgment on liquidity, concentration, uncertainty in market factors and assumptions in price determination and other risks.

As described in Note 2.5, ‘Recognition and Measurement of Financial Instruments’, diverse valuation techniques are used to determine the fair value of financial instruments, from generally accepted market valuation models to internally developed valuation models that incorporate various types of assumptions and variables.

3.3 Impairment of financial assets

In accordance of Korean IFRS No.1109, the provision for impairment for financial assets are based on assumptions about risk of default and expected loss rates. The Group uses judgment in making these assumptions and selecting the inputs to the impairment calculation based on the Group’s past history, existing market conditions as well as forward-looking estimates at the end of each reporting period (Note 2.5).

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KB SECURITIES CO., LTD. and Subsidiaries

Notes to the Consolidated Financial Statements

December 31, 2023 and 2022

3.4 Measurement of defined benefit obligation

The present value of the defined benefit liability depends on a number of factors that are determined on an actuarial basis using a number of assumptions. The assumptions used in determining the net cost (income) for pensions include the discount rate. Any changes in these assumptions will impact the carrying amount of the defined benefit liability. The Group determines the appropriate discount rate at the end of the reporting period. This is the interest rate that is used to determine the present value of estimated future cash outflows expected to be required to settle the defined benefit liability. In determining the appropriate discount rate, the Group considers the interest rates of high-quality corporate bonds that are denominated in the currency in which the pension benefits will be paid, and that have terms to maturity approximating to the terms of the related pension liability. Other key assumptions for defined benefit liability are based in part on current market conditions.

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KB SECURITIES CO., LTD. and Subsidiaries

Notes to the Consolidated Financial Statements

December 31, 2023 and 2022

4. Segment Information

4.1 Types of services from which each reportable segment derives its revenues

Management of the Group decides operating segment based on the information, which is to be reported to the Group’s chief executive officer, in order to allocate resources to the segment and evaluate performance of the segment. The Group’s operating segments consist of brokerage and wealth management, investment banking, trading and other business.

In accordance with Korean IFRS No.1108, reporting segments of the Group by type of services categories are as follows:


Reporting segment		Main business activities
Brokerage and wealth management		Sales and services relating to wealth management and brokerage provided to individuals, corporations and institutional investors

Investment banking		Underwriting and advisory services related to bond issuance, structured finance, initial public offering, and mergers and acquisition

Trading		Trading of securities and derivatives, and proprietary trading

Others		Other services and support services

4.2 Revenue and income of segment reporting

Financial information by operating segment for the years ended December 31, 2023 and 2022, are as follows:


(in thousands of Korean won)
	2023
	Operating income		Operating expense		Operating profit (loss)			Non-operating income(expense)			Income tax expense(income)			Profit(loss) for the year
Brokerage and wealth management		4,261,242,111		3,995,796,550		265,445,561			(15,071,272	)		4,939,523			245,434,766
Investment banking		1,140,541,809		980,639,957		159,901,852			(160,227,030	)		6,222			(331,400	)
Trading		5,818,380,116		5,783,227,424		35,152,692			14,908,258			890,854			49,170,096
Others1		364,976,075		145,322,055		219,654,020			(27,002,623	)		98,897,022			93,754,375

		11,585,140,111		10,904,985,986		680,154,125			(187,392,667	)		104,733,621			388,027,837

1 The income tax expenses which have a difficulty of reasonable allocation are allocated to the others segment.
	2022
	Operating income		Operating expense		Operating profit (loss)			Non-operating income(expense)			Income tax expense(income)			Profit(loss) for the year
Brokerage and wealth management		2,408,296,357		2,259,020,997		149,275,360			(19,539,482	)		3,876,679			125,859,199
Investment banking		1,002,087,699		868,341,524		133,746,175			70,922,603			(424,484	)		205,093,262
Trading		10,665,451,383		10,786,517,633		(121,066,250	)		2,688,303			—			(118,377,947	)
Others1		194,187,118		111,147,155		83,039,963			(36,739,819	)		64,046,996			(17,746,852	)

		14,270,022,557		14,025,027,309		244,995,248			17,331,605			67,499,191			194,827,662

1	The income tax expenses which have a difficulty of reasonable allocation are allocated to the others segment.

The above reported operating income is generated from external customers and inter-segment transactions, and expense includes expenses that can be directly attributed or reasonably allocated to each segment including internal interests. Segment profit represents the profit earned by each segment, reported to the chief executive officer to determine the allocation of resources and to measure the respective segments’ performance.

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KB SECURITIES CO., LTD. and Subsidiaries

Notes to the Consolidated Financial Statements

December 31, 2023 and 2022

4.3 Assets and liabilities of segments

Total assets and liabilities by each segment as at December 31, 2023 and 2022, are as follows:


	2023
(in thousands of Korean won)	Total assets		Total liabilities
Brokerage and wealth management		9,345,980,477		7,884,747,630
Investment banking		5,304,636,428		2,529,523,378
Trading		26,049,912,039		18,355,101,830
Others		20,566,390,942		26,201,515,029

		61,266,919,886		54,970,887,867


	2022
(in thousands of Korean won)	Total assets		Total liabilities
Brokerage and wealth management		8,033,999,999		6,815,076,741
Investment banking		4,906,240,013		2,289,794,909
Trading		24,196,618,231		18,931,136,515
Others		16,680,551,089		19,912,610,608

		53,817,409,332		47,948,618,773

4.4 Information on principal customers

No single customer contributed 10% or more to the Group’s revenue for the years ended December 31, 2023 and 2022.

5. Cash and Deposits

The details of cash and deposits as at December 31, 2023 and 2022, are as follows:


(in thousands of Korean won)	2023			2022
Cash and cash equivalents
Cash on hand		262			14,217
Cash in foreign currency		431,615			120,717
Time deposits and installment savings deposits		21,500,000			—
Demand deposits		263,547,704			736,305,237
Checking deposit		4,781,337			12,052,931
Foreign currency deposits		154,516,735			365,559,515
Certificates of deposit		11,604,600			39,298,100
MMDA		93,156,066			86,530,578
Accommodation notes		65,212,108			4,747,856

		614,750,427			1,244,629,151

Deposits
Deposits for securities subscription		2,166,493			1,007,522
Reserve for claims of customers’ deposits		434,840,018			457,235,271
Guarantee deposits for securities lending and borrowing		203,006,941			120,336,120
Deposits for exchange-traded derivatives		642,870,695			1,139,399,469
Guarantee deposits for KSFC trading		529,659			2,513,154
Long-term deposits		93,670,397			602,713,044
Restricted due from financial institutes		44,500			42,500
Others		935,478,329			970,345,187
Allowances for credit losses of deposits		(290,229	)		(645,224	)

		2,312,316,803			3,292,947,043

		2,927,067,230			4,537,576,194

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KB SECURITIES CO., LTD. and Subsidiaries

Notes to the Consolidated Financial Statements

December 31, 2023 and 2022

Restricted deposits as at December 31, 2023 and 2022, are as follows:


(in thousands of Korean won)	2023		2022
Deposits for securities subscription 1		2,166,493		1,007,522
Reserve for claims of customers’ deposits 2		434,840,018		457,235,271
Guarantee deposits for securities lending and borrowing 3		203,006,941		120,336,120
Deposits for exchange-traded derivatives 4		642,870,695		1,139,399,469
Guarantee deposits for KSFC trading 5		529,659		2,513,154
Long-term deposits 6		69,000,000		569,000,000
Restricted due from financial institutes 7		44,500		42,500
Others 8		935,478,329		970,345,187

		2,287,936,635		3,259,879,223

Subscription deposits are subscription margin of investors and the Group that are separately deposited at Korea Securities Finance Corporation(KSFC) or other relevant financial institutions until due date for payment for the subscription of the newly issued or sold securities in accordance with the provisions of Article 4-44 of the Regulation on Financial Investment Business.

2	The reserve for claims of customers’ deposits is deposited separately in a form of trust in KSFC to meet the demands of investors, such as return of deposit and others, in accordance with Article 74 of the Financial Investment Services and Capital Markets Act.

3	Deposited in Korea Securities Depository to guarantee for securities lending and borrowing.

4	The deposits for exchange-traded derivatives that the investors and the Group pay for foreign futures option trading to KEB Hana Bank and Forex Dealer Member.

5	In the case of an investor’s loan transaction, a certain portion of the price of securities sold is deposited at KSFC as margin.

6	Pledged deposits provided for securities lending and borrowing, repurchase agreements between institutions and retail payment through investment & securities companies are included.

7	Guarantee deposits for checking accounts

8	Deposits in foreign currency and others consist of the margin accounts for trading financial instruments in foreign markets and deposits to court.

Changes in allowances for credit losses of deposits for the years ended December 31, 2023 and 2022, are as follows:


	2023
	12-month expected credit losses			Lifetime expected credit losses
(in thousands of Korean won)	12-month expected credit losses			Non-impaired		Impaired
Beginning		645,224			—		—
Reversal of provision		(354,995	)		—		—

		290,229			—		—


	2022
	12-month expected credit losses		Lifetime expected credit losses
(in thousands of Korean won)	12-month expected credit losses		Non-impaired		Impaired
Beginning		632,624		—		—
Provision		12,598		—		—
Others (foreign exchange and etc.)		2		—		—

		645,224		—		—

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KB SECURITIES CO., LTD. and Subsidiaries

Notes to the Consolidated Financial Statements

December 31, 2023 and 2022

6. Financial Instruments at FVTPL

The details of financial instruments at FVTPL as at December 31, 2023 and 2022, are as follows:


(in thousands of Korean won)	Financial Assets at FVTPL				Financial Liabilities at FVTPL
(in thousands of Korean won)	2023		2022		2023		2022
Financial assets required to be mandatorily measured at FVTPL		35,948,948,684		29,549,677,944		2,860,033,642		2,082,979,265
Financial assets designated at FVTPL		—		—		7,975,847,458		10,088,600,213

		35,948,948,684		29,549,677,944		10,835,881,100		12,171,579,478

6.1 Financial assets required to be mandatorily measured at FVTPL

The details of financial assets required to be mandatorily measured at FVTPL as at December 31, 2023 and 2022, are as follows:


(in thousands of Korean won)	2023		2022
Deposits
Reserve for claims of customers’ deposits (trust) 1		4,708,118,940		4,531,756,555
Equity instruments
Stocks		956,436,643		676,021,174
Debt instruments
Government and local government bonds		3,903,440,137		4,092,627,487
Special bonds		2,981,409,472		1,793,814,905
Corporate bonds		5,907,122,398		4,093,880,890
Corporate commercial papers		6,502,635,311		5,196,584,584
Asset-backed short-term bonds		2,257,642,941		2,345,571,118
Hybrid bond with security-like features		253,634,969		229,833,526
Investment in partnerships		581,762,940		440,156,234
Collective investment securities		4,762,077,497		3,563,298,865
Hybrid stock with bond-like features		148,101,449		148,375,859
Loans
Privately placed bonds		—		42,604,988
Loan receivables		235,977		1,884,215
Derivative linked securities
Equity-linked securities		9,129,439		31,899,039
Other derivative linked securities		615,830,815		331,528,412
Other OTC derivative combined contract		187,620,544		236,574,425
Securities in foreign currency
Stocks in foreign currency		32,947,516		42,399,169
Bonds in foreign currency		848,585,456		788,520,400
Investment in partnerships in foreign currency		44,768,900		43,983,023
Collective investment securities in foreign currency		211,642,556		229,349,884
Collective fund for default loss		83,483,822		82,667,524
Hybrid bonds		522,625,044		606,272,079
Exchange traded notes		10,540		73,589
Other short-term securities held for sale		429,685,378		—

		35,948,948,684		29,549,677,944

The reserve for claims of customers’ deposits is restricted to use because this reserve is deposited separately in a form of trust in KSFC to meet the demands of investors, such as return of deposit and others, in accordance with Article 74 of the Financial Investment Services and Capital Markets Act. Among the reserve for claims of customers’ deposits deposited in a form of trust in KSFC, beneficiaries amount to 98,000 million are provided as a collateral for the payment to Kookmin Bank which is an agent bank of payment, in accordance with Article 72 Clause 3 of the Financial Investment Services and Capital Markets Act.

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KB SECURITIES CO., LTD. and Subsidiaries

Notes to the Consolidated Financial Statements

December 31, 2023 and 2022

Details of securities sold which are classified as financial liabilities at FVTPL as at December 31, 2023 and 2022, are as follows:


(in thousands of Korean won)	2023		2022
Equity Securities
Stocks		585,888,153		428,935,822
Collective investment securities		2,771,484		2,268,236
Debt Securities
Government and local government bonds		2,271,374,005		1,651,775,207

		2,860,033,642		2,082,979,265

The details of financial assets pledged as collateral as at December 31, 2023 and 2022, are as follows:


(in thousands of Korean won)	Description1	2023	2022	Security right holder
Financial assets at FVTPL	Guarantee deposits for lending and borrowing securities and bonds	10,076,739,059	7,063,541,100	Korea Securities Depository, etc.
	Margin required and guarantee deposits for derivatives trading	1,556,234,283	1,129,757,669	Korea Stock Exchange, etc.
	Guarantee deposits for clearing fund	—	1,458,725	Korea Securities Depository
	Guarantee deposits for reverse repurchase agreements	3,200,510,963	3,724,891,983	Customer, Institution
	Guarantee deposits for agency of balance payments	98,000,000	98,000,000	Kookmin Bank
Financial assets at FVOCI	Guarantee deposits for lending and borrowing securities and bond	1,719,208,234	1,592,460,037	Korea Securities Depository, etc.
	Guarantee deposits for derivatives trading	167,879,197	136,701,325	Hana Securities Co., Ltd., etc.
	Guarantee deposits for reverse repurchase agreements	2,509,724,246	2,234,882,535	Customer, Institution
Other Financial Assets	Guarantee deposits for lending and borrowing securities and bonds	—	47,850,000	KSFC

		19,328,295,982	16,029,543,374

1	As at December 31, 2023 and 2022, the accrued interests related to debt securities provided as collateral of 344,448 million and 228,578 million, respectively, are excluded.

The Group provides 7,916,155 million and 4,986,339 million of its borrowing securities held as collateral to KSFC and others as at December 31, 2023 and 2022, respectively.

As at December 31, 2023 and 2022, the fair values of collaterals sold or repledged as collateral regardless of default are as follows:


(in thousands of Korean won)	Securities
(in thousands of Korean won)	2023		2022
Fair value of collateral held		1,475,466,369		771,983,450
Fair value of collaterals sold or re-provided as collateral		—		—

		1,475,466,369		771,983,450

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KB SECURITIES CO., LTD. and Subsidiaries

Notes to the Consolidated Financial Statements

December 31, 2023 and 2022

6.2 Financial liabilities designated at FVTPL

The details of financial liabilities designated at FVTPL as at December 31, 2023 and 2022, are as follows:


(in thousands of Korean won)
(in thousands of Korean won)	2023		2022

Derivative linked securities
Equity-linked securities		5,150,606,199		6,804,836,388
Other derivative linked securities		1,834,571,974		1,636,774,811
Other OTC derivative combined contract		933,983,691		1,611,301,701
Exchange traded notes		56,685,594		35,687,313

		7,975,847,458		10,088,600,213

The differences between the contractual value to be paid at maturity and the carrying amount of financial liabilities at FVTPL as at December 31, 2023 and 2022, are as follows:


(in thousands of Korean won)	2023			2022

Contractual value to be paid at maturity		7,871,014,106			9,973,339,575
Carrying amount		7,975,847,458			10,088,600,213

Differences		(104,833,352	)		(115,260,638	)

Accumulated changes in fair value of financial liabilities at FVTPL due to the change of credit risk as at December 31, 2023 and 2022, are as follows:


	Other comprehensive income recognized from changes of fair value due to the change of credit risk (before tax) 1
(in thousands of Korean won)	2023			2022
Beginning of the year		(55,892,336	)		(3,070,045	)
Change of fair value		71,900,709			(52,822,291	)

End of the year		16,008,373			(55,892,336	)

1	The Group assessed OCI based on the probability of default corresponding to the Group’s credit rating and loss given default. The amount is before tax.

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KB SECURITIES CO., LTD. and Subsidiaries

Notes to the Consolidated Financial Statements

December 31, 2023 and 2022

7. Derivatives and Hedge Accounting

Derivatives owned by the Group as at December 31, 2023 and 2022, are as follows:


	2023
	Assets				Liabilities
(in thousands of Korean won)	Hedging		Trading		Hedging		Trading		Unsettled amount
Exchange-traded derivatives
Interest rate:
Futures		—		6,226,442		—		4,575,801		4,060,134,218
Equity:
Futures		—		11,179,142		—		13,231,866		1,309,051,635
Purchase options		—		6,954,717		—		—		463,629,117
Written options		—		—		—		76,362,413		684,865,465
Currency:
Futures		—		695,841		—		988,763		262,150,197
Goods:
Futures		—		1,304,534		—		105,876		26,037,012

		—		26,360,676		—		95,264,719		6,805,867,644

OTC derivatives
Interest rate:
Forwards		—		501,834,689		—		483,149,733		14,811,295,000
Swaps		—		109,345,316		—		242,414,634		195,202,814,288
Options		—		2,018,458		—		3,037,884		310,000,000
Currency:
Forwards		—		49,134,125		5,307,120		51,416,659		6,078,694,096
Swaps		—		16,012,196		—		18,688,294		676,068,378
Options		—		9,208,609		—		952		412,828,000
Equity:
Swaps		—		330,132,474		—		493,475,311		5,165,522,772
Purchase options		—		71,207,596		—		—		1,864,702,957
Written options		—		—		—		163,911,123		1,854,850,307
Credit:
Swaps		—		17,799,282		—		8,695,443		2,864,356,720
Goods:
Swaps		—		4,348,110		—		4,351,784		31,635,429
Options		—		1,091,360		—		1,146,632		100,484,231
Others:
Swaps		—		—		—		245,312,183		694,541,167

		—		1,112,132,215		5,307,120		1,715,600,632		230,067,793,345

		—		1,138,492,891		5,307,120		1,810,865,351		236,873,660,989

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KB SECURITIES CO., LTD. and Subsidiaries

Notes to the Consolidated Financial Statements

December 31, 2023 and 2022


	2022
	Assets				Liabilities
(in thousands of Korean won)	Hedging		Trading		Hedging		Trading		Unsettled amount
Exchange-traded derivatives
Interest rate:
Futures		—		765,348		—		256,477		2,343,711,058
Equity:
Futures		—		37,455,359		—		89,623,607		1,805,532,521
Purchase options		—		58,416,888		—		—		1,642,156,435
Written options		—		—		—		330,682,246		2,408,934,407
Currency:
Futures		—		36,107		—		2,364,335		363,267,744
Goods:
Futures		—		1,969,714		—		940,729		28,576,813

		—		98,643,416		—		423,867,394		8,592,178,978

OTC derivatives
Interest rate:
Forwards		—		699,505,103		—		585,959,569		9,274,000,000
Swaps		—		103,770,321		—		262,238,369		139,330,656,724
Options		—		8,032,470		—		8,906,536		830,000,000
Currency:
Forwards		—		242,992,102		11,193,570		162,136,418		9,375,928,575
Swaps		—		17,764,588		422,620		14,626,867		726,824,375
Options		—		21,446,632		—		438,473		595,631,000
Equity:
Swaps		—		377,840,090		—		492,274,693		6,649,734,899
Purchase options		—		107,414,599		—		—		1,446,151,498
Written options		—		—		—		28,591,489		1,747,432,558
Credit:
Swaps		—		32,859,630		—		17,468,307		3,006,113,907
Goods:
Options		—		887,437		—		885,284		131,500,117
Others:
Swaps		—		13,153,870		—		313,466,501		909,001,211

		—		1,625,666,842		11,616,190		1,886,992,506		174,022,974,864

		—		1,724,310,258		11,616,190		2,310,859,900		182,615,153,842

The Group entered into the derivative contracts for hedging foreign currency risk of foreign operations and applied hedge of net investments in foreign operations accounting.

Gain or loss on hedge of net investments in foreign operations for the years ended December 31, 2023 and 2022, are as follows:


(in thousands of Korean won)	2023			2022
Gain(loss) on the hedging instrument		(3,879,499	)		(16,003,726	)
Effective portion of changes in fair value of hedging (other comprehensive income)		(3,879,499	)		(16,003,726	)
Ineffective portion of changes in fair value of hedging (profit or loss)		—			—

The effective portion of changes in fair value of hedge of net investments in foreign operations recognized as other comprehensive income for the years ended December 31, 2023 and 2022, are as follows:


(in thousands of Korean won)	2023			2022
Other comprehensive income		(3,879,499	)		(16,003,726	)
Reclassification form other comprehensive income to net income		7,036,511			8,429,967
Tax effect		(859,392	)		1,823,373

Other comprehensive income-net of tax		2,297,620			(5,750,386	)

Table of Contents

KB SECURITIES CO., LTD. and Subsidiaries

Notes to the Consolidated Financial Statements

December 31, 2023 and 2022

The average price related to hedge of net investments in foreign operations as at December 31, 2023 and 2022, are as follows:


(in thousands of Korean won)	2023
	The nominal amount of the hedging instrument		Average price (KRW/USD, Korean won)		Average price (KRW/GBP, Korean won)		Average price (KRW/EUR, Korean won)
1 year		31,332,420		1,071.00		—		—
2 year		—		—		—		—
3 year		207,593,400		1,178.92		—		—
Over 3 year		—		—		—		—

		238,925,820		1,164.76		—		—


(in thousands of Korean won)	2022
	The nominal amount of the hedging instrument		Average price (KRW/USD, Korean won)		Average price (KRW/GBP, Korean won)		Average price (KRW/EUR, Korean won)
1 year		79,875,690		1,071.00		—		1,312.78
2 year		27,498,060		—		1,465.26		—
3 year		—		—		—		—
Over 3 year		204,035,300		1,178.92		—		—

		311,409,050		1,152.84		1,465.26		1,312.78

8. Financial Assets at FVOCI

The details of financial assets at FVOCI as at December 31, 2023 and 2022, are as follows:


(in thousands of Korean won)	2023		2022
Equity instruments
Stocks 1		432,986,576		420,330,275
Investment in partnerships		1,200,000		1,200,000
Other		425,898,551		264,586,560
Debt instruments
Government and municipal government bonds		5,248,842		5,025,406
Special bonds		1,519,494,875		690,761,850
Corporate bonds		2,542,007,878		3,194,758,699
Securities in foreign currency
Debt instruments		203,567,442		222,182,668
Stocks		2,407,680		—
Investment in partnerships		1,701,025		1,708,780

		5,134,512,869		4,800,554,238

1	Equity investment on Korea Stock Exchange and other relative institutions

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KB SECURITIES CO., LTD. and Subsidiaries

Notes to the Consolidated Financial Statements

December 31, 2023 and 2022

Changes in gains and losses on valuation of financial assets at FVOCI (before tax) for the years ended December 31, 2023 and 2022, are as follows:


(in thousands of Korean won)	2023
(in thousands of Korean won)	Beginning balance			Valuation1		Disposal / Transfer		Ending balance
Stocks		373,514,968			12,656,300		—		386,171,268
Government and local government bonds		(195,840	)		252,871		—		57,031
Special bonds		(2,654,207	)		3,686,348		2,654,207		3,686,348
Corporate bonds		(23,558,045	)		19,132,483		11,242,068		6,816,506
Securities in foreign currency		(6,164,532	)		5,080,455		49,013		(1,035,064	)
Other securities in Korean won		(22,900,422	)		21,311,991		—		(1,588,431	)

		318,041,922			62,120,448		13,945,288		394,107,658

1	Provision for credit loss of debt instruments at FVOCI of 693 million and reversal of provision for credit loss of debt instruments at FVOCI of 170 million are excluded.


(in thousands of Korean won)	2022
(in thousands of Korean won)	Beginning balance			Valuation1			Disposal / Transfer			Ending balance
Stocks		318,760,788			54,754,180			—			373,514,968
Government and local government bonds		1,768			(194,598	)		(3,010	)		(195,840	)
Special bonds		(3,852,333	)		(746,312	)		1,944,438			(2,654,207	)
Corporate bonds		(14,256,566	)		(15,405,862	)		6,104,383			(23,558,045	)
Securities in foreign currency		(915,931	)		(5,390,112	)		141,511			(6,164,532	)
Other securities in Korean won		(1,125,111	)		(21,775,311	)		—			(22,900,422	)

		298,612,615			11,241,985			8,187,322			318,041,922

1	Provision for credit loss of debt instruments at FVOCI of 2 million and reversal of provision for credit loss of debt instruments at FVOCI of 477 million are excluded.

There are no equity investments at FVOCI derecognized for the year ended December 31, 2023.

The dividend income from equity investments at FVOCI for the years ended December 31, 2023 and 2022, are as follows;


(in thousands of Korean won)	2023				2022
(in thousands of Korean won)	Derecognised		Held at the end of reporting period		Derecognised		Held at the end of reporting period
Equity investments at FVOCI
Non marketable securities		—		9,216,747		—		9,536,521
Other equity investments		—		17,262,460		—		8,493,303

The Group recognized provision for credit loss of debt instruments at FVOCI amount (before tax) to 1,528 million and 1,004 million, as at December 31, 2023 and 2022, respectively.

Table of Contents

KB SECURITIES CO., LTD. and Subsidiaries

Notes to the Consolidated Financial Statements

December 31, 2023 and 2022

9. Investments in Associates

Investments in associates as at December 31, 2023 and 2022, are as follows:


(in thousands of Korean won)				Percentage of ownership (%)		2023						2022
	Location	Industry	Closing month	Percentage of ownership (%)		Acquisition cost		Net asset amount		Book amount		Acquisition cost		Net asset amount		Book amount
Wise Asset Management Co., Ltd. 1	Korea	Asset Mgt.	—		—		—		—		—		4,629,876		—		—
KB Special Purpose Acquisition Company No.21 2	Korea	SPAC	November		0.13		10,000		20,529		20,529		10,000		20,053		20,053
KB Special Purpose Acquisition Company No.22 2	Korea	SPAC	November		0.19		10,000		20,125		20,125		10,000		19,767		19,767
KB Special Purpose Acquisition Company No.23 2	Korea	SPAC	—		—		—		—		—		5,000		10,060		10,060
KB Special Purpose Acquisition Company No.24 2	Korea	SPAC	—		—		—		—		—		25,000		57,197		57,197
KB Special Purpose Acquisition Company No.25 2	Korea	SPAC	November		0.12		5,000		9,771		9,771		—		—		—
KB Special Purpose Acquisition Company No.26 2	Korea	SPAC	November		0.09		5,000		9,613		9,613		—		—		—
KB Special Purpose Acquisition Company No.27 2	Korea	SPAC	November		0.04		5,000		9,959		9,959		—		—		—
KB New Paradigm Agriculture Venture Fund	Korea	Investment	December		25.00		2,100,000		2,615,088		2,615,088		2,100,000		2,976,845		2,976,845
KB KONEX Market Vitalization Fund	Korea	Investment	December		23.44		615,000		7,633,039		7,633,039		615,000		7,301,375		7,301,375
KB-KDBC New Technology Business Investment Fund	Korea	Investment	December		33.33		1,800,000		3,031,227		3,031,227		1,800,000		2,988,748		2,988,748
KBTS Technology Venture Private Equity Fund 2	Korea	Investment	December		16.00		2,592,000		3,534,896		3,534,896		2,784,000		3,941,180		3,941,180
KB-SJ Tourism Venture Fund 2	Korea	Investment	December		18.52		4,600,000		3,241,734		3,241,734		4,600,000		3,773,125		3,773,125
KB Shinjasanaubo Fund 2	Korea	Investment	December		14.67		1,804,000		1,765,941		1,765,941		1,804,000		1,810,764		1,810,764
UNION Media Commerce Fund	Korea	Investment	December		28.99		1,000,000		952,209		952,209		1,000,000		956,728		956,728
KB-Brain KOSDAQ Scale-Up Fund 2	Korea	Investment	December		15.96		—		2,304,484		2,304,484		4,950,000		6,675,432		6,675,432
KB SPROTT Renewable Private Equity Fund I 2	Korea	Investment	December		7.85		3,682,135		3,337,160		3,337,160		3,682,135		3,374,650		3,374,650
KB-Stonebridge Secondary Private Equity Fund 2	Korea	Investment	December		4.16		4,810,584		5,395,679		5,395,679		6,800,355		7,184,026		7,184,026
KB-SP Private Equity Fund IV 2	Korea	Investment	December		15.37		6,100,000		2,494,808		2,494,808		6,100,000		1,892,224		1,892,224

Table of Contents

KB SECURITIES CO., LTD. and Subsidiaries

Notes to the Consolidated Financial Statements

December 31, 2023 and 2022


KB-UTC Inno-Tech Venture Fund 2	Korea	Investment	December	14.76	6,375,000	5,227,210	5,227,210	7,125,000	6,393,024	6,393,024
KB-NAU Special Situation Corporate Restructuring Private Equity Fund 2	Korea	Investment	December	6.00	4,786,339	8,904,972	8,904,972	5,003,207	6,276,963	6,276,963
December & Company Inc. 2	Korea	System software development	December	—	—	—	—	30,000,000	3,735,016	16,028,831
KB Material and Parts No. 1 PEF 2	Korea	Investment	December	14.47	3,400,000	3,299,669	3,299,669	3,400,000	3,320,637	3,320,637
KB Global Commerce Private Equity Investment Fund 2	Korea	Investment	December	16.28	7,000,000	8,635,840	8,635,840	7,000,000	6,219,107	6,219,107
KB-KTB Technology Venture Fund 2	Korea	Investment	December	18.18	8,000,000	7,639,550	7,639,550	6,000,000	5,806,248	5,806,248
KB Bio Global Expansion Private Equity Fund No.1	Korea	Investment	December	39.47	15,000,000	15,895,111	15,895,111	15,000,000	15,779,019	15,779,019
KB Digital Platform Fund 2	Korea	Investment	December	16.67	18,000,000	17,123,835	17,123,835	9,500,000	9,055,919	9,055,919
KB-SOLIDUS Healthcare Investment Fund 2	Korea	Investment	December	5.10	2,383,333	2,249,721	2,249,721	1,100,000	1,036,176	1,036,176
G Payment Joint Stock Company	Vietnam	Electrinic payment & settlement agency	December	43.49	9,028,760	3,318,951	8,966,066	9,028,760	2,916,905	9,282,131
KB-GeneN Medical Venture Fund 1	Korea	Investment	December	22.52	2,000,000	1,922,291	1,922,291	2,000,000	1,964,512	1,964,512
KB-BridgePole Venture Investment Fund 2	Korea	Investment	December	6.30	136,000	863,129	863,129	850,000	834,741	834,741
KB-Kyobo New Mobility Power Fund	Korea	Investment	December	28.57	3,000,000	2,621,880	2,621,880	3,000,000	2,826,264	2,826,264
DA-Friend Investment Fund II	Korea	Investment	December	27.06	987,633	927,462	927,462	987,633	948,652	948,652
Cornerstone Pentastone IV Fund	Korea	Investment	December	21.52	817,742	774,734	774,734	817,742	792,174	792,174
SKS-VLP Fund No.2	Korea	Investment	December	—	—	—	—	1,155,560	1,121,399	1,121,399
JS Private Equity Fund III	Korea	Investment	December	20.48	1,700,000	1,861,512	1,861,512	1,700,000	1,664,180	1,664,180
Mirae Asset Mobility Investment Fund I	Korea	Investment	December	22.99	2,000,000	1,948,750	1,948,750	2,000,000	1,979,241	1,979,241
KB-FT 1st Green Growth Investment Fund 2	Korea	Investment	December	10.34	2,000,000	1,928,089	1,928,089	2,000,000	1,969,650	1,969,650
THE CHAEUL FUND NO.1 (formerly, SKS IB NEW M&T FUND NO.1)	Korea	Investment	December	31.25	1,000,000	972,191	972,191	1,000,000	989,491	989,491
POSITVE Sobujang Venture Fund #1	Korea	Investment	December	43.96	2,000,000	1,965,090	1,965,090	2,000,000	1,977,209	1,977,209
KB-NP Green ESG New Technology Venture Capital Fund 2	Korea	Investment	December	11.59	8,180,000	7,771,668	7,771,668	3,740,000	3,617,183	3,617,183
Hisstory 2022 Fintech Fund	Korea	Investment	December	34.78	2,000,000	1,937,813	1,937,813	2,000,000	1,980,701	1,980,701

Table of Contents

KB SECURITIES CO., LTD. and Subsidiaries

Notes to the Consolidated Financial Statements

December 31, 2023 and 2022


PEBBLES-MW M·C·E New Technology Investment Fund 1st	Korea	Investment	December	—	—	—	—	2,000,000	1,981,813	1,981,813
KB Star Galaxy REIT	Korea	Investment	December	26.94	134,772,782	120,231,339	120,231,339	134,772,782	136,323,142	136,323,142
KB Bio Private Equity Investment Fund IV	Korea	Investment	December	24.19	7,500,000	6,770,765	6,770,765	7,500,000	7,492,209	7,492,209
Nextrade Co., Ltd. 2	Korea	Other Finance	September	6.64	9,700,000	9,225,312	9,225,312	9,700,000	9,700,000	9,700,000
LAKEWOOD-AVES Fund No.1	Korea	Investment	December	39.06	2,000,000	1,976,715	1,976,715	—	—	—
MW-Pyco NewWave New Technology Investment Fund 4th	Korea	Investment	December	51.28	2,000,000	1,965,019	1,965,019	—	—	—
KB-SUSUNG 1st Investment Fund 2	Korea	Investment	December	10.00	2,000,000	1,968,977	1,968,977	—	—	—
Friend 55 New Technology Business Investment Fund	Korea	Investment	December	53.33	1,200,000	1,182,473	1,182,473	—	—	—
Bitgoeul Cheomdan Green 1st Co., Ltd. 2	Korea	Investment	December	19.00	190,000	165,451	165,451	—	—	—
DSIP-Pharos Bioenergy Fund	Korea	Investment	December	34.10	4,000,000	16,457,868	16,457,868	—	—	—
Shinhan-Eco Venture Fund 2nd	Korea	Investment	December	20.00	1,825,000	1,800,072	1,800,072	—	—	—
Leading H2O Fund 1	Korea	Investment	December	48.23	1,500,000	1,488,980	1,488,980	—	—	—
2023 JB Newtech No.2 Fund	Korea	Investment	December	25.71	1,800,000	1,785,594	1,785,594	—	—	—
U-KB Credit No.1 Private Equity	Korea	Investment	December	23.26	4,813,953	4,779,307	4,779,307	—	—	—
KB-BridgePole Venture Investment Fund #2	Korea	Investment	December	14.29	1,500,000	1,494,373	1,494,373	—	—	—
Sirius Silicon Valley I New Technology Fund	Korea	Investment	December	23.81	500,000	485,282	485,282	—	—	—

					304,235,261	305,943,257	311,590,372	311,296,050	281,683,749	300,342,790

1	The Group recognized the entire book amount as a loss before the year ended December 31, 2021, as loss was expected. Disposal of securities are restricted due to stock lock-up requirements as at December 31, 2023.

2	Although the ownership of the Group is less than 20%, these are included as associates, since the Group has a significant influence over investee’s policy and operations.

Table of Contents

KB SECURITIES CO., LTD. and Subsidiaries

Notes to the Consolidated Financial Statements

December 31, 2023 and 2022

Changes in investments in associates for the years ended December 31, 2023 and 2022, are as follows:


	2023
(in thousands of Korean won)	Beginning balance		Acquisition		Dividends		Disposal			Impairment		Re- classification 1		Changes in equity of associates		Profit (loss) of associates			Ending balance
KB Special Purpose Acquisition Company No.21		20,053		—		—		—			—		—		11		465			20,529
KB Special Purpose Acquisition Company No.22		19,767		—		—		—			—		—		—		358			20,125
KB Special Purpose Acquisition Company No.23		10,060		—		—		(10,060	)		—		—		—		—			—
KB Special Purpose Acquisition Company No.24		57,197		—		—		(57,197	)		—		—		—		—			—
KB Special Purpose Acquisition Company No.25		—		5,000		—		1,722			—		—		3,289		(240	)		9,771
KB Special Purpose Acquisition Company No.26		—		5,000		—		2,734			—		—		1,953		(74	)		9,613
KB Special Purpose Acquisition Company No.27		—		5,000		—		(3,677	)		—		—		8,800		(164	)		9,959
KB New Paradigm Agriculture Venture Fund		2,976,845		—		—		—			—		—		—		(361,757	)		2,615,088
KB KONEX Market Vitalization Fund		7,301,375		—		—		—			—		—		—		331,664			7,633,039
KB-KDBC New Technology Business Investment Fund		2,988,748		—		—		—			—		—		—		42,479			3,031,227
KBTS Technology Venture Private Equity Fund		3,941,180		—		—		(192,000	)		—		—		—		(214,284	)		3,534,896
KB-SJ Tourism Venture Fund		3,773,125		—		—		—			—		—		—		(531,391	)		3,241,734
KB Shinjasanaubo Fund		1,810,764		—		—		—			—		—		—		(44,823	)		1,765,941
UNION Media Commerce Fund		956,728		—		—		—			—		—		—		(4,519	)		952,209
KB-Brain KOSDAQ Scale-Up Fund		6,675,432		—		—		(4,950,000	)		—		—		—		579,052			2,304,484

Table of Contents

KB SECURITIES CO., LTD. and Subsidiaries

Notes to the Consolidated Financial Statements

December 31, 2023 and 2022


KB SPROTT Renewable Private Equity Fund I	3,374,650	—	—		—		—		—		—		(37,490	)	3,337,160
KB-Stonebridge Secondary Private Equity Fund	7,184,026	—	(113,113	)	(1,989,771	)	—		—		—		314,537		5,395,679
KB-SP Private Equity Fund IV	1,892,224	—	—		—		—		—		93,317		509,267		2,494,808
KB-UTC Inno-Tech Venture Fund	6,393,024	—	(2,647	)	(750,000	)	—		—		—		(413,167	)	5,227,210
KB-NAU Special Situation Corporate Restructuring Private Equity Fund	6,276,963	900,000	—		(1,116,868	)	—		—		—		2,844,877		8,904,972
December & Company Inc.	16,028,831	—	—		(2,573,879	)	(12,290,444	)	(1,164,508	)	—		—		—
KB Material and Parts No. 1 PEF	3,320,637	—	(34,000	)	—		—		—		—		13,032		3,299,669
KB Global Commerce Private Equity Investment Fund	6,219,107	—	—		—		—		—		—		2,416,733		8,635,840
KB-KTB Technology Venture Fund	5,806,248	2,000,000	—		—		—		—		—		(166,698	)	7,639,550
KB Bio Global Expansion Private Equity Fund No.1	15,779,019	—	—		—		—		—		—		116,092		15,895,111
KB Digital Platform Fund	9,055,919	8,500,000	—		—		—		—		—		(432,084	)	17,123,835
KB-SOLIDUS Healthcare Investment Fund	1,036,176	1,283,333	—		—		—		—		—		(69,788	)	2,249,721
G Payment Joint Stock Company	9,282,131	—	—		—		—		—		(79,519	)	(236,546	)	8,966,066
KB-GeneN Medical Venture Fund 1	1,964,512	—	—		—		—		—		—		(42,221	)	1,922,291
KB-BridgePole Venture Investment Fund	834,741	—	(637,500	)	(714,000	)	—		—		—		1,379,888		863,129
KB-Kyobo New Mobility Power Fund	2,826,264	—	—		—		—		—		—		(204,384	)	2,621,880
DA-Friend Investment Fund II	948,652	—	—		—		—		—		—		(21,190	)	927,462
Cornerstone Pentastone IV Fund	792,174	—	—		—		—		—		—		(17,440	)	774,734
SKS-VLP Fund No.2	1,121,399	—	—		(1,121,399	)	—		—		—		—		—
JS Private Equity Fund III	1,664,180	—	—		—		—		—		—		197,332		1,861,512
Mirae Asset Mobility Investment Fund I	1,979,241	—	—		—		—		—		—		(30,491	)	1,948,750
KB-FT 1st Green Growth Investment Fund	1,969,650	—	—		—		—		—		—		(41,561	)	1,928,089
THE CHAEUL FUND NO.1(formerly, SKS IB NEW M&T FUND NO.1)	989,491	—	—		—		—		—		—		(17,300	)	972,191

Table of Contents

KB SECURITIES CO., LTD. and Subsidiaries

Notes to the Consolidated Financial Statements

December 31, 2023 and 2022


POSITVE Sobujang Venture Fund #1	1,977,209	—	—		—		—		—		—		(12,119	)	1,965,090
Hisstory 2022 Fintech Fund	1,980,701	—	—		—		—		—		—		(42,888	)	1,937,813
PEBBLES-MW M·C·E New Technology Investment Fund 1st	1,981,813	—	—		(1,981,813	)	—		—		—		—		—
KB-NP Green ESG New Technology Venture Capital Fund	3,617,183	4,440,000	—		—		—		—		—		(285,515	)	7,771,668
KB Star Galaxy REIT	136,323,142	—	(9,643,551	)	—		—		—		(5,434,729	)	(1,013,523	)	120,231,339
KB Bio Private Equity Investment Fund IV	7,492,209	—	—		—		—		—		—		(721,444	)	6,770,765
Nextrade Co., Ltd.	9,700,000	—	—		—		—		—		—		(474,688	)	9,225,312
LAKEWOOD-AVES Fund No.1	—	2,000,000	—		—		—		—		—		(23,285	)	1,976,715
MW-Pyco NewWave New Technology Investment Fund 4th	—	2,000,000	—		—		—		—		—		(34,981	)	1,965,019
KB-SUSUNG 1st Investment Fund	—	2,000,000	—		—		—		—		—		(31,023	)	1,968,977
Friend 55 New Technology Business Investment Fund	—	1,200,000	—		—		—		—		—		(17,527	)	1,182,473
Bitgoeul Cheomdan Green 1st Co., Ltd.	—	190,000	—		—		—		—		(1,040	)	(23,509	)	165,451
DSIP-Pharos Bioenergy Fund	—	4,000,000	—		—		—		—		—		12,457,868		16,457,868
Shinhan-Eco Venture Fund 2nd	—	1,825,000	—		—		—		—		—		(24,928	)	1,800,072
Leading H2O Fund 1	—	1,500,000	—		—		—		—		—		(11,020	)	1,488,980
2023 JB Newtech No.2 Fund	—	1,800,000	—		—		—		—		—		(14,406	)	1,785,594
U-KB Credit No.1 Private Equity	—	4,813,953	—		—		—		—		—		(34,646	)	4,779,307
KB-BridgePole Venture Investment Fund #2	—	1,500,000	—		—		—		—		—		(5,627	)	1,494,373
Sirius Silicon Valley I New Technology Fund	—	500,000	—		—		—		—		—		(14,718	)	485,282

	300,342,790	40,467,286	(10,430,811	)	(15,456,208	)	(12,290,444	)	(1,164,508	)	(5,407,918	)	15,530,185		311,590,372

1	This amount is reclassified from financial assets measured at FVTPL for the year ended December 31, 2023.

Table of Contents

KB SECURITIES CO., LTD. and Subsidiaries

Notes to the Consolidated Financial Statements

December 31, 2023 and 2022


(in thousands of Korean won)	2022
(in thousands of Korean won)	Beginning balance		Acquisition		Dividends		Disposal			Re- classification1		Changes in equity of associates		Profit (loss) of associates			Ending balance
KB Special Purpose Acquisition Company No.17		955		—		—		(955	)		—		—		—			—
KB Special Purpose Acquisition Company No.18		1,955		—		—		(1,955	)		—		—		—			—
KB Special Purpose Acquisition Company No.19		1,906		—		—		(1,906	)		—		—		—			—
KB Special Purpose Acquisition Company No.20		1,913		—		—		(1,913	)		—		—		—			—
KB Special Purpose Acquisition Company No.21		—		10,000		—		(9,379	)		—		19,915		(483	)		20,053
KB Special Purpose Acquisition Company No.22		—		10,000		—		(7,909	)		—		19,361		(1,685	)		19,767
KB Special Purpose Acquisition Company No.23		—		5,000		—		(4,265	)		—		9,962		(637	)		10,060
KB Special Purpose Acquisition Company No.24		—		25,000		—		—			—		32,388		(191	)		57,197
KB New Paradigm Agriculture Venture Fund		2,940,867		—		—		(625,000	)		—		—		660,978			2,976,845
KB KONEX Market Vitalization Fund		5,445,338		—		—		—			—		—		1,856,037			7,301,375
KB-KDBC New Technology Business Investment Fund		5,894,529		—		—		(2,600,000	)		—		—		(305,781	)		2,988,748
KBTS Technology Venture Private Equity Fund		4,808,098		—		—		(1,296,000	)		—		—		429,082			3,941,180
KB-SJ Tourism Venture Fund		4,146,315		—		—		(400,000	)		—		—		26,810			3,773,125
KB Shinjasanaubo Fund		1,897,195		—		—		(132,000	)		—		—		45,569			1,810,764
UNION Media Commerce Fund		958,907		—		—		—			—		—		(2,179	)		956,728

Table of Contents

KB SECURITIES CO., LTD. and Subsidiaries

Notes to the Consolidated Financial Statements

December 31, 2023 and 2022


KB-Brain KOSDAQ Scale-Up Fund	11,125,821	—	—		(4,800,000	)	—	—	349,611		6,675,432
KB SPROTT Renewable Private Equity Fund I	954,286	2,499,360	—		—		—	—	(78,996	)	3,374,650
KB-Stonebridge Secondary Private Equity Fund	6,270,906	1,248,439	(573,020	)	(631,500	)	—	—	869,201		7,184,026
KB-SP Private Equity Fund IV	5,627,717	—	—		—		—	—	(3,735,493	)	1,892,224
KB-UTC Inno-Tech Venture Fund	6,990,821	—	—		—		—	—	(597,797	)	6,393,024
KB-NAU Special Situation Corporate Restructuring Private Equity Fund	7,626,992	660,000	—		(2,352,793	)	—	—	342,764		6,276,963
Project Vanilla Co., Ltd.	525,344	—	—		(525,344	)	—	—	—		—
December & Company Inc.	21,388,370	—	—		(49,239	)	—	42,904	(5,353,204	)	16,028,831
KB Material and Parts No. 1 PEF	3,342,698	—	(34,000	)	—		—	—	11,939		3,320,637
KB Bio Private Equity Fund III Ltd.	9,950,054	—	(6,027,919	)	(3,922,135	)	—	—	—		—
KB Global Commerce Private Equity Investment Fund	6,820,331	—	—		—		—	—	(601,224	)	6,219,107
KB-KTB Technology Venture Fund	1,983,162	4,000,000	—		—		—	—	(176,914	)	5,806,248
KB Bio Global Expansion Private Equity Fund No.1	14,967,033	—	—		—		—	—	811,986		15,779,019
KB Digital Platform Fund	4,499,746	5,000,000	—		—		—	—	(443,827	)	9,055,919
KB-SOLIDUS Healthcare Investment Fund	100,000	1,000,000	—		—		—	—	(63,824	)	1,036,176
G Payment Joint Stock Company	9,350,182	—	—		—		—	296,406	(364,457	)	9,282,131
KB-GeneN Medical Venture Fund 1	—	2,000,000	—		—		—	—	(35,488	)	1,964,512
KB-BridgePole Venture Investment Fund	—	850,000	—		—		—	—	(15,259	)	834,741
KB-Kyobo New Mobility Power Fund	—	3,000,000	—		—		—	—	(173,736	)	2,826,264
Apollo REIT PropCo LLC	—	19,968,049	—		(19,968,049	)	—	—	—		—
DA-Friend Investment Fund II 1	—	—	—		—		987,633	—	(38,981	)	948,652
Cornerstone Pentastone IV Fund 1	—	—	—		—		817,742	—	(25,568	)	792,174
SKS-VLP Fund No.2 1	—	—	—		—		1,155,560	—	(34,161	)	1,121,399
JS Private Equity Fund III	—	1,700,000	—		—		—	—	(35,820	)	1,664,180
Mirae Asset Mobility Investment Fund I	—	2,000,000	—		—		—	—	(20,759	)	1,979,241

Table of Contents

KB SECURITIES CO., LTD. and Subsidiaries

Notes to the Consolidated Financial Statements

December 31, 2023 and 2022


KB-FT 1st Green Growth Investment Fund	—	2,000,000	—		—		—	—		(30,350	)	1,969,650
THE CHAEUL FUND NO.1(former SKS IB NEW M&T FUND NO.1)	—	1,000,000	—		—		—	—		(10,509	)	989,491
POSITIVE Sobujang Venture Fund No.1	—	2,000,000	—		—		—	—		(22,791	)	1,977,209
Hisstory 2022 Fintech Fund	—	2,000,000	—		—		—	—		(19,299	)	1,980,701
PEBBLES-MW M·C·E New Technology Investment Fund 1st	—	2,000,000	—		—		—	—		(18,187	)	1,981,813
KB-NP Green ESG New Technology Venture Capital Fund	—	3,740,000	(89	)	—		—	—		(122,728	)	3,617,183
KB Star Galaxy REIT	—	134,772,782	—		—		—	(2,931,330	)	4,481,690		136,323,142
KB Bio Private Equity Investment Fund IV	—	7,500,000	—		—		—	—		(7,791	)	7,492,209
Nextrade Co., Ltd.	—	9,700,000	—		—		—	—		—		9,700,000

	137,621,441	208,688,630	(6,635,028	)	(37,330,342	)	2,960,935	(2,510,394	)	(2,452,452	)	300,342,790

1	This amount is reclassified from financial assets measured at FVTPL for the year ended December 31, 2022.

Table of Contents

KB SECURITIES CO., LTD. and Subsidiaries

Notes to the Consolidated Financial Statements

December 31, 2023 and 2022

Summarized financial information of the associates as at and for the years ended December 31, 2023 and 2022, are as follows:


	December 31, 2023						2023
(in thousands of Korean won)	Assets		Liabilities		Equity		Operating Revenue		Profit (loss) for the period			Total comprehensive Income(loss)
KB Special Purpose Acquisition Company No.21		17,821,142		1,993,667		15,827,475		670,340		358,716			358,716
KB Special Purpose Acquisition Company No.22		12,269,371		1,763,873		10,505,498		320,731		187,053			187,053
KB Special Purpose Acquisition Company No.25		9,741,210		1,328,681		8,412,529		154,773		55,694			55,694
KB Special Purpose Acquisition Company No.26		11,902,881		1,319,365		10,583,516		140,472		51,593			51,593
KB Special Purpose Acquisition Company No.27		29,633,238		3,929,029		25,704,209		129,687		37,525			37,525
KB New Paradigm Agriculture Venture Fund		10,666,067		205,717		10,460,350		162,184		(1,447,030	)		(1,447,030	)
KB KONEX Market Vitalization Fund		32,567,673		364		32,567,309		3,672,022		1,415,102			1,415,102
KB-KDBC New Technology Business Investment Fund		9,094,707		990		9,093,717		105		127,436			127,436
KBTS Technology Venture Private Equity Fund		28,232,523		6,139,420		22,093,103		835,529		(1,339,272	)		(1,339,272	)
KB-SJ Tourism Venture Fund		18,002,900		497,482		17,505,418		664,167		(2,869,509	)		(2,869,509	)
KB Shinjasanaubo Fund		12,327,788		287,283		12,040,505		165,077		(305,614	)		(305,614	)
UNION Media Commerce Fund		3,318,493		33,371		3,285,122		—		(15,593	)		(15,593	)
KB-Brain KOSDAQ Scale-Up Fund		14,441,479		—		14,441,479		7,610,245		3,628,725			3,628,725
KB SPROTT Renewable Private Equity Fund I		42,868,123		378,558		42,489,565		26,227		(393,950	)		(393,950	)
KB-Stonebridge Secondary Private Equity Fund		129,859,951		203,834		129,656,117		9,697,956		7,558,338			7,558,338
KB-SP Private Equity Fund IV		16,807,398		570,698		16,236,700		3,894,047		4,073,191			4,073,191
KB-UTC Inno-Tech Venture Fund		35,978,162		572,516		35,405,646		1,319,017		(2,798,519	)		(2,798,519	)
KB-NAU Special Situation Corporate Restructuring Private Equity Fund		145,519,150		475,264		145,043,886		58,734,438		47,414,623			47,414,623
KB Material and Parts No. 1 PEF		22,808,490		1,955		22,806,535		450,931		90,071			90,071
KB Global Commerce Private Equity Investment Fund		53,160,689		111,960		53,048,729		14,323,876		14,845,645			14,845,645
KB-KTB Technology Venture Fund		42,263,387		245,864		42,017,523		166,031		(916,841	)		(916,841	)
KB Bio Global Expansion Private Equity Fund No.1		40,373,396		105,781		40,267,615		712,543		294,100			294,100
KB Digital Platform Fund		103,501,602		758,591		102,743,011		649,000		(2,592,505	)		(2,592,505	)
KB-SOLIDUS Healthcare Investment Fund		44,874,894		330,421		44,544,473		36,992		(1,343,524	)		(1,343,524	)
G Payment Joint Stock Company		10,017,756		2,386,229		7,631,527		11,434,257		(539,039	)		(539,039	)
KB-GeneN Medical Venture Fund 1		8,582,957		47,983		8,534,974		152		(187,459	)		(187,459	)
KB-BridgePole Venture Investment Fund		13,780,672		72,157		13,708,515		22,201,768		21,915,866			21,915,866
KB-Kyobo New Mobility Power Fund		9,216,278		39,699		9,176,579		1,454		(715,346	)		(715,346	)
DA-Friend Investment Fund II		3,502,373		74,747		3,427,626		5		(78,311	)		(78,311	)
Cornerstone Pentastone IV Fund		3,623,263		23,118		3,600,145		188		(81,043	)		(81,043	)
JS Private Equity Fund III		9,089,882		1,321		9,088,561		1,135,495		963,447			963,447

Table of Contents

KB SECURITIES CO., LTD. and Subsidiaries

Notes to the Consolidated Financial Statements

December 31, 2023 and 2022


Mirae Asset Mobility Investment Fund I	8,551,322	74,260	8,477,062	19,245	(132,636	)	(132,636	)
KB-FT 1st Green Growth Investment Fund	18,649,437	—	18,649,437	3,458	(402,000	)	(402,000	)
THE CHAEUL FUND NO.1(formerly, SKS IB NEW M&T FUND NO.1)	3,111,012	—	3,111,012	542	(55,358	)	(55,358	)
POSITVE Sobujang Venture Fund #1	4,493,518	22,937	4,470,581	74,660	(27,570	)	(27,570	)
KB-NP Green ESG New Technology Venture Capital Fund	68,227,911	1,192,611	67,035,300	20,638	(2,462,738	)	(2,462,738	)
Hisstory 2022 Fintech Fund	5,611,675	40,462	5,571,213	625	(123,304	)	(123,304	)
KB Star Galaxy REIT	1,069,551,044	623,722,455	445,828,589	52,949,499	(3,762,447	)	19,520,871
KB Bio Private Equity Investment Fund IV	28,148,121	162,291	27,985,830	1,336	(2,981,967	)	(2,981,967	)
Nextrade Co., Ltd.	139,245,364	295,043	138,950,321	—	(7,149,684	)	(7,149,684	)
LAKEWOOD-AVES Fund No.1	5,064,550	4,159	5,060,391	60	(59,609	)	(59,609	)
MW-Pyco NewWave New Technology Investment Fund 4th	3,831,786	—	3,831,786	645	(68,214	)	(68,214	)
KB-SUSUNG 1st Investment Fund	19,689,771	—	19,689,771	47,067	(310,229	)	(310,229	)
Friend 55 New Technology Business Investment Fund	2,220,336	3,200	2,217,136	3,186	(32,863	)	(32,863	)
Bitgoeul Cheomdan Green 1st Co., Ltd.	877,178	6,384	870,794	—	(123,733	)	(123,733	)
DSIP-Pharos Bioenergy Fund	48,307,047	44,349	48,262,698	36,812,985	36,532,698		36,532,698
Shinhan-Eco Venture Fund 2nd	9,067,706	67,346	9,000,360	1,610	(124,641	)	(124,641	)
Leading H2O Fund 1	3,088,472	1,320	3,087,152	4,552	(22,848	)	(22,848	)
2023 JB Newtech No.2 Fund	6,945,965	1,987	6,943,978	1,841	(56,022	)	(56,022	)
U-KB Credit No.1 Private Equity	20,556,751	5,732	20,551,019	345,469	(148,980	)	(148,980	)
KB-BridgePole Venture Investment Fund #2	10,501,807	41,195	10,460,612	2,027	(39,387	)	(39,387	)
Sirius Silicon Valley I New Technology Fund	2,039,751	1,568	2,038,183	734	(61,816	)	(61,816	)

Summarized financial information of associates for which financial information is not available as at December 31, 2023 are excluded.

Table of Contents

KB SECURITIES CO., LTD. and Subsidiaries

Notes to the Consolidated Financial Statements

December 31, 2023 and 2022


	December 31, 2022						2022
(in thousands of Korean won)	Assets		Liabilities		Equity		Operating Revenue		Profit (loss) for the period			Total comprehensive Income(loss)
KB Special Purpose Acquisition Company No.21		17,265,672		1,805,081		15,460,591		—		(104,191	)		(104,191	)
KB Special Purpose Acquisition Company No.22		12,020,318		1,701,873		10,318,445		—		(7,882	)		(7,882	)
KB Special Purpose Acquisition Company No.23		14,294,351		1,970,660		12,323,691		—		(4,383	)		(4,383	)
KB Special Purpose Acquisition Company No.24		9,999,746		6,567,905		3,431,841		—		(11,451	)		(11,451	)
KB New Paradigm Agriculture Venture Fund		12,305,600		398,220		11,907,380		3,882,008		2,643,913			2,643,913
KB KONEX Market Vitalization Fund		31,377,573		225,366		31,152,207		9,710,508		7,919,092			7,919,092
KB-KDBC New Technology Business Investment Fund		9,225,850		259,568		8,966,282		1,698,596		(917,341	)		(917,341	)
KBTS Technology Venture Private Equity Fund		30,347,103		5,714,728		24,632,375		1,042,936		2,681,763			2,681,763
KB-SJ Tourism Venture Fund		20,926,320		551,394		20,374,926		719,109		144,771			144,771
KB Shinjasanaubo Fund		12,499,930		153,811		12,346,119		658,870		310,696			310,696
UNION Media Commerce Fund		3,318,493		17,778		3,300,715		—		(7,518	)		(7,518	)
KB-Brain KOSDAQ Scale-Up Fund		42,537,663		704,909		41,832,754		11,851,369		2,190,892			2,190,892
KB SPROTT Renewable Private Equity Fund I		44,879,342		995,827		43,883,515		138		(1,026,947	)		(1,026,947	)
KB-Stonebridge Secondary Private Equity Fund		172,978,705		348,626		172,630,079		22,444,501		20,886,877			20,886,877
KB-SP Private Equity Fund IV		13,432,211		776,022		12,656,189		5,553		(24,984,937	)		(24,984,937	)
KB-UTC Inno-Tech Venture Fund		44,111,359		809,263		43,302,096		—		(4,049,078	)		(4,049,078	)
KB-NAU Special Situation Corporate Restructuring Private Equity Fund		102,827,078		497,814		102,329,264		21,469,658		5,712,736			5,712,736
December & Company Inc.		35,601,450		13,270,926		22,330,524		868,117		(32,001,912	)		(32,001,912	)
KB Material and Parts No. 1 PEF		22,953,419		1,955		22,951,464		451,111		82,525			82,525
KB Global Commerce Private Equity Investment Fund		38,315,044		111,960		38,203,084		5,907		(3,693,236	)		(3,693,236	)
KB-KTB Technology Venture Fund		32,214,753		280,389		31,934,364		133,987		(973,025	)		(973,025	)
KB Bio Global Expansion Private Equity Fund No.1		40,079,295		105,781		39,973,514		2,465,319		2,057,031			2,057,031
KB Digital Platform Fund		55,090,257		754,741		54,335,516		263,891		(2,662,958	)		(2,662,958	)
KB-SOLIDUS Healthcare Investment Fund		21,483,037		345,040		21,137,997		13,907		(1,302,003	)		(1,302,003	)
G Payment Joint Stock Company		10,176,916		3,523,392		6,653,524		3,400,666		(831,333	)		(831,333	)
KB-GeneN Medical Venture Fund 1		8,770,415		47,983		8,722,432		1,299		(157,568	)		(157,568	)
KB-BridgePole Venture Investment Fund		13,330,305		72,656		13,257,649		4,162		(242,352	)		(242,352	)
KB-Kyobo New Mobility Power Fund		9,931,624		39,699		9,891,925		1,656		(608,075	)		(608,075	)
DA-Friend Investment Fund II		3,526,439		20,502		3,505,937		58		(144,063	)		(144,063	)
Cornerstone Pentastone IV Fund		3,704,358		23,170		3,681,188		250		(118,813	)		(118,813	)
SKS-VLP Fund No.2		4,855,380		2,219		4,853,161		566		(147,839	)		(147,839	)

Table of Contents

KB SECURITIES CO., LTD. and Subsidiaries

Notes to the Consolidated Financial Statements

December 31, 2023 and 2022


JS Private Equity Fund III	8,125,609	495	8,125,114	388	(174,886	)	(174,886	)
Mirae Asset Mobility Investment Fund I	8,682,721	73,023	8,609,698	9,255	(90,302	)	(90,302	)
KB-FT 1st Green Growth Investment Fund	19,051,437	—	19,051,437	4,748	(293,563	)	(293,563	)
THE CHAEUL FUND NO.1(former SKS IB NEW M&T FUND NO.1)	3,166,370	—	3,166,370	—	(33,630	)	(33,630	)
POSITIVE Sobujang Venture Fund No.1	4,521,087	22,937	4,498,150	639	(51,850	)	(51,850	)
KB-NP Green ESG New Technology Venture Capital Fund	31,837,965	637,590	31,200,375	18,534	(1,058,605	)	(1,058,605	)
Hisstory 2022 Fintech Fund	5,694,516	—	5,694,516	250	(55,484	)	(55,484	)
PEBBLES-MW M·C·E New Technology Investment Fund 1st	8,562,125	40,329	8,521,796	322	(78,204	)	(78,204	)
KB Star Galaxy REIT	1,098,631,387	588,956,071	509,675,316	25,232,718	16,637,141		16,637,141
KB Bio Private Equity Investment Fund IV	31,000,301	32,504	30,967,797	301	(32,202	)	(32,202	)
Nextrade Co., Ltd.	146,100,005	—	146,100,005	—	—		—

Summarized financial information of associates for which financial information is not available as at December 31, 2022 are excluded.

Table of Contents

KB SECURITIES CO., LTD. and Subsidiaries

Notes to the Consolidated Financial Statements

December 31, 2023 and 2022

The fair value of marketable Investments in associates as at December 31, 2023 and 2022, are as follows:


(in thousands of Korean won)	2023
	Market value		Carrying amount
KB Special Purpose Acquisition Company No.21		20,000		20,529
KB Special Purpose Acquisition Company No.22		29,100		20,125
KB Special Purpose Acquisition Company No.25		10,400		9,771
KB Special Purpose Acquisition Company No.26		10,050		9,613
KB Special Purpose Acquisition Company No.27		9,305		9,959
KB Star REIT		108,455,795		120,231,339

		108,534,650		120,301,336


(in thousands of Korean won)	2022
	Market value		Carrying amount
KB Special Purpose Acquisition Company No.21		19,800		20,053
KB Special Purpose Acquisition Company No.22		19,850		19,767
KB Special Purpose Acquisition Company No.23		9,900		10,060

		49,550		49,880

10. Loans Measured at Amortised Cost

The details of loans measured at amortised cost as at December 31, 2023 and 2022, are as follows:


	2023
(in thousands of Korean won)	Total amount			Allowances			Book amount
Retails
Broker’s loans		3,383,928,113			(6,005,061	)		3,377,923,052
Loans to employees		13,258,833			—			13,258,833
Present value discount		(17,803	)		—			(17,803	)

		3,397,169,143			(6,005,061	)		3,391,164,082

Corporates
Broker’s loans		274,936,498			—			274,936,498
Securities purchased under repurchase agreements		1,369,600,000			—			1,369,600,000
Loans receivable		5,107,912,302			(160,240,056	)		4,947,672,246
Purchased loans		52,226,101			(381,401	)		51,844,700
Advances for customers		7,564,877			(7,564,877	)		—
Privately placed bonds		363,000,000			(870,547	)		362,129,453
Financial lease receivables		29,544,593			—			29,544,593
Net deferred origination fees and costs		(5,759,466	)		—			(5,759,466	)
Present value discount		(2,186,170	)		—			(2,186,170	)

		7,196,838,735			(169,056,881	)		7,027,781,854

		10,594,007,878			(175,061,942	)		10,418,945,936

Table of Contents

KB SECURITIES CO., LTD. and Subsidiaries

Notes to the Consolidated Financial Statements

December 31, 2023 and 2022


	2022
(in thousands of Korean won)	Total amount			Allowances			Book amount
Retails
Broker’s loans		3,001,361,497			(5,309,305	)		2,996,052,192
Loans to employees		11,975,968			—			11,975,968
Present value discount		(25,619	)		—			(25,619	)

		3,013,311,846			(5,309,305	)		3,008,002,541

Corporates
Broker’s loans		301,209,350			—			301,209,350
Securities purchased under repurchase agreements		730,100,000			—			730,100,000
Loans receivable		4,734,348,931			(52,232,538	)		4,682,116,393
Purchased loans		133,078,510			(3,538,136	)		129,540,374
Advances for customers		7,564,877			(7,564,877	)		—
Privately placed bonds		29,583,500			(299,446	)		29,284,054
Financial lease receivables		35,135,664			—			35,135,664
Net deferred origination fees and costs		(4,820,171	)		—			(4,820,171	)
Present value discount		(3,064,593	)		—			(3,064,593	)

		5,963,136,068			(63,634,997	)		5,899,501,071

		8,976,447,914			(68,944,302	)		8,907,503,612

The changes in book amount of loans measured at amortised cost for the years ended December 31, 2023 and 2022, are as follows:


(in thousands of Korean won)	2023
	Retails								Corporates
	The financial instruments applying 12-month expected credit losses		The financial instruments applying lifetime expected credit losses				The financial instruments applying credit loss model		The financial instruments applying 12-month expected credit losses			The financial instruments applying lifetime expected credit losses						The financial instruments applying credit loss model
			Non-impaired		Impaired							Non-impaired			Impaired
Beginning		3,008,002,541		—		5,309,305		—		5,914,779,283			30,000,000			18,356,785			—
Transfer between stages
Transfer to lifetime expected credit Losses (Non-impaired)		—		—		—		—		(236,445,424	)		236,445,424			—			—
Transfer to lifetime expected credit Losses (impaired)		—		—		—		—		(55,036,957	)		—			55,036,957			—
Write-off		—		—		—		—		—			—			(10,761,359	)		—
Sales		—		—		—		—		(356,502,050	)		—			—			—
Other changes (recover, etc.)		383,161,543		—		695,754		—		1,614,282,957			(10,311,881	)		(3,005,000	)		—

Ending		3,391,164,084		—		6,005,059		—		6,881,077,809			256,133,543			59,627,383			—

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KB SECURITIES CO., LTD. and Subsidiaries

Notes to the Consolidated Financial Statements

December 31, 2023 and 2022


(in thousands of Korean won)	2022
	Retails									Corporates
	The financial instruments applying 12-month expected credit losses			The financial instruments applying lifetime expected credit losses				The financial instruments applying credit loss model		The financial instruments applying 12-month expected credit losses			The financial instruments applying lifetime expected credit losses						The financial instruments applying credit loss model
				Non-impaired		Impaired							Non-impaired			Impaired
Beginning		3,156,055,442			—		29,651		—		4,004,190,706			59,000,000			49,239,871			—
Transfer between stages
Transfer to lifetime expected credit Losses (Non-impaired)		—			—		—		—		(10,000,000	)		10,000,000			—			—
Transfer to lifetime expected credit Losses (impaired)		—			—		—		—		(6,675,000	)		—			6,675,000			—
Write-off		—			—		—		—		—			—			(33,202,354	)		—
Sales		—			—		—		—		(722,881,522	)		—			—			—
Business Combination		9,444,665			—		—		—		21,064,759			—			—			—
Other changes (recover, etc.)		(157,497,567	)		—		5,279,655		—		2,629,080,340			(39,000,000	)		(4,355,732	)		—

Ending		3,008,002,540			—		5,309,306		—		5,914,779,283			30,000,000			18,356,785			—

The changes in allowances for loan losses for the years ended December 31, 2023 and 2022, are as follows:
(in thousands of Korean won)	2023
	Retails									Corporates
	The financial instruments applying 12-month expected credit losses			The financial instruments applying lifetime expected credit losses				The financial instruments applying credit loss model		The financial instruments applying 12-month expected credit losses			The financial instruments applying lifetime expected credit losses						The financial instruments applying credit loss model
				Non-impaired		Impaired							Non-impaired			Impaired
Beginning		—			—		5,309,306		—		45,130,193			1,756,384			16,748,421			—
Transfer between stages
Transfer to lifetime expected credit Losses (Non-impaired)		—			—		—		—		(1,548,515	)		1,548,515			—			—
Transfer to lifetime expected credit Losses (impaired)		—			—		—		—		(885,835	)		—			885,835			—
Write-off		—			—		—		—		—			—			(10,761,359	)		—
Sale		—			—		—		—		(736,955	)		—			—			—
Provision (Reversal)		—			—		—		—		24,804,401			81,859,745			17,687,302			—
Other transfer (changes in for FX rate, etc.)		—			—		695,754		—		(6,367,071	)		(1,064,179	)		—			—

Ending		—			—		6,005,060		—		60,396,218			84,100,465			24,560,199			—

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KB SECURITIES CO., LTD. and Subsidiaries

Notes to the Consolidated Financial Statements

December 31, 2023 and 2022


(in thousands of Korean won)	2022
	Retails								Corporates
	The financial instruments applying 12-month expected credit losses		The financial instruments applying lifetime expected credit losses				The financial instruments applying credit loss model		The financial instruments applying 12-month expected credit losses			The financial instruments applying lifetime expected credit losses						The financial instruments applying credit loss model
			Non-impaired		Impaired							Non-impaired			Impaired
Beginning		—		—		29,651		—		30,678,488			2,567,841			49,031,507			—
Transfer between stages
Transfer to lifetime expected credit Losses (Non-impaired)		—		—		—		—		(138,398	)		138,398			—			—
Transfer to lifetime expected credit Losses (impaired)		—		—		—		—		(3,461,509	)		—			3,461,509			—
Write-off		—		—		—		—		—			—			(33,202,354	)		—
Provision (Reversal)		—		—		—		—		22,103,268			(653,201	)		805,841			—
Other transfer (changes in for FX rate, etc.)		—		—		5,279,655		—		(4,051,657	)		(296,654	)		(3,348,083	)		—

Ending		—		—		5,309,306		—		45,130,192			1,756,384			16,748,420			—

Among the loans which have been written-off, the Group manages loans for which the claims against borrowers have not been lost due to reasons such as incomplete extinctive prescription pursuant to relevant laws and uncollected receivables after writing-off, as the written-off loans. As at December 31, 2023 and 2022, the balances of the written-off loans are 21,186,737 thousand and 9,218,967 thousand, respectively.

Broker’s loan

The Group provides loans for stock purchases with credit period of 180 days (can be extended for six times) for investors using margin transaction. As at December 31, 2023, interest rate of the loan is differentiated from 4.9% to 9.1% based on maturities, and overdue interest rate is 9.9%.

Also, as the Group operates loans secured by securities. At the initial transaction, in case of superior shares and common shares, the Group requires trading securities or cash as collateral, corresponding to 167% and 250% of the loan, respectively. Over 140% collateral of the loan is required. As at December 31, 2023, the interest rate of loans secured by securities is differentiated from Annual Percentage Rate (APR) 6.9% to 9.1% based on maturities, from APR 7.3% to 8.6% based on credit rating, and the loan with past due date is 9.9%.

For margin loans to customers, trading securities or cash is required to be pledged corresponding to 140% of the loan. Because of this condition, the Group pledged securities as collateral which are purchased with the margin loans. If the value of the pledged securities do not reach to 140% of the loan, the Group requires additional cash or trading securities as collateral.

Table of Contents

KB SECURITIES CO., LTD. and Subsidiaries

Notes to the Consolidated Financial Statements

December 31, 2023 and 2022

Advances for Customers

Advances for customers consist of advanced payments on loss compensation and advanced payments for others.

Advanced payments on loss compensation are the monetary amount of claim for reimbursement, paid by the Group, if any losses from embezzlement and arbitrary trading are occurred.

Advanced payments for others consist of two types. The first type is the amount of recourse from paid Investor Protection Fund based on the previous Securities Exchange Act Article 69 Clause 2 or Clause 4. This recourse is driven by preferred payments to the securities company with reasonable reason for taking the preferred payments. The second type is the amount of recourse from Joint Compensation Fund based on Law relating to the Financial Investment Services and Capital Markets Act Article 323 Clause 14 and related Enforcement Decree Article 318 Clause 8. This recourse is driven by preferred payments to the securities company that occurred reasonable reasons for taking the preferred payments.

11.	Property and Equipment

The details of property and equipment as at December 31, 2023 and 2022, are as follows:


	2023
(in thousands of Korean won)	Acquisition cost		Accumulated depreciation			Accumulated revaluation		Book amount
Land		28,369,717		—			83,580,757		111,950,474
Buildings		47,457,596		(21,857,231	)		—		25,600,365
Vehicles		1,179,461		(441,577	)		—		737,884
Furniture and equipment		187,134,248		(152,882,410	)		—		34,251,838
Others		58,636,961		(46,798,343	)		—		11,838,618
Right-of-use assets		172,735,406		(101,973,756	)		—		70,761,650

		495,513,389		(323,953,317	)		83,580,757		255,140,829


	2022
(in thousands of Korean won)	Acquisition cost		Accumulated depreciation			Accumulated revaluation		Book amount
Land		28,242,445		—			83,580,757		111,823,202
Buildings		47,113,828		(20,377,779	)		—		26,736,049
Vehicles		1,127,506		(386,660	)		—		740,846
Furniture and equipment		178,606,269		(139,984,783	)		—		38,621,486
Others		56,604,592		(44,340,837	)		—		12,263,755
Right-of-use assets		146,262,689		(66,417,660	)		—		79,845,029

		457,957,329		(271,507,719	)		83,580,757		270,030,367

The details of right-of-use assets as at December 31, 2023 and 2022, are as follows:


	2023
(in thousands of Korean won)	Acquisition cost		Accumulated depreciation			Book amount
Buildings		164,529,393		(97,854,971	)		66,674,422
Vehicles		4,077,952		(2,387,117	)		1,690,835
Others		4,128,061		(1,731,668	)		2,396,393

		172,735,406		(101,973,756	)		70,761,650

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KB SECURITIES CO., LTD. and Subsidiaries

Notes to the Consolidated Financial Statements

December 31, 2023 and 2022


	2022
(in thousands of Korean won)	Acquisition cost		Accumulated depreciation			Book amount
Buildings		137,398,425		(60,817,498	)		76,580,927
Vehicles		4,039,939		(1,781,351	)		2,258,588
Others		4,824,325		(3,818,811	)		1,005,514

		146,262,689		(66,417,660	)		79,845,029

The changes in property and equipment for the years ended December 31, 2023 and 2022, are as follows:


	2023
(in thousands of Korean won)	Beginning balance		Acquisition		Disposal			Depreciation			Others 1			Ending balance
Land		111,823,202		—		—			—			127,272			111,950,474
Buildings		26,736,049		—		—			(1,494,043	)		358,359			25,600,365
Vehicles		740,846		14,325		—			(226,740	)		209,453			737,884
Furniture and equipment		38,621,486		11,858,591		(8,907	)		(16,663,872	)		444,540			34,251,838
Others		12,263,755		5,086,739		(5,401	)		(5,508,935	)		2,460			11,838,618
Right-of-use assets		79,845,029		20,618,348		(1,674,321	)		(26,746,436	)		(1,280,970	)		70,761,650

		270,030,367		37,578,003		(1,688,629	)		(50,640,026	)		(138,886	)		255,140,829

1	Others consist of reclassification to investment properties, foreign exchange differences and others.


	2022
(in thousands of Korean won)	Beginning balance		Acquisition		Disposal			Re-valuation		Depreciation			Business combination		Others 1			Ending balance
Land		65,029,822		—		(1,115,081	)		47,521,151		—			—		387,310			111,823,202
Buildings		23,398,034		—		(2,147,693	)		—		(1,422,159	)		7,011,613		(103,746	)		26,736,049
Vehicles		—		157,715		—			—		(89,681	)		556,513		116,299			740,846
Furniture and equipment		32,238,604		21,490,998		(5,231	)		—		(15,831,052	)		398,798		329,369			38,621,486
Others		13,389,322		6,364,691		(97,415	)		—		(7,405,465	)		—		12,622			12,263,755
Right-of-use assets		76,700,067		32,036,855		(3,497,264	)		—		(26,292,607	)		473,368		424,610			79,845,029

		210,755,849		60,050,259		(6,862,684	)		47,521,151		(51,040,964	)		8,440,292		1,166,464			270,030,367

1	Others consist of reclassification to investment properties, foreign exchange differences and others.

Table of Contents

KB SECURITIES CO., LTD. and Subsidiaries

Notes to the Consolidated Financial Statements

December 31, 2023 and 2022

The changes in right-of-use assets for the year ended December 31, 2023 and 2022, are as follows:


	2023
(in thousands of Korean won)	Beginning balance		Acquisition		Disposal			Depreciation			Others 1			Ending balance
Buildings		76,580,927		16,904,819		(1,489,415	)		(24,399,773	)		(922,136	)		66,674,422
Vehicles		2,258,588		1,289,527		(207,685	)		(1,334,079	)		(315,516	)		1,690,835
Others		1,005,514		2,424,003		—			(1,012,585	)		(20,539	)		2,396,393

		79,845,029		20,618,349		(1,697,100	)		(26,746,437	)		(1,258,191	)		70,761,650

1	Others consist of foreign exchange differences and others.


	2022
(in thousands of Korean won)	Beginning balance		Acquisition		Disposal			Depreciation			Business combination		Others 1		Ending balance
Buildings		73,419,498		29,366,072		(3,080,026	)		(24,022,595	)		473,368		424,610		76,580,927
Vehicles		1,570,194		2,291,704		(414,827	)		(1,188,483	)		—		—		2,258,588
Others		1,710,375		379,080		(2,412	)		(1,081,529	)		—		—		1,005,514

		76,700,067		32,036,856		(3,497,265	)		(26,292,607	)		473,368		424,610		79,845,029

1	Others consist of foreign exchange differences and others.

The Group applies the revaluation model in relation to the measurement after the initial recognition of the land and the date of revaluation of the land was August 5, 2022. The Group used the assessed price provided by a qualified appraiser for the revaluation of the land.

The land was measured using sales value of similar land, and the access condition, environment condition and other specific factors are considered when the value is adjusted. There is no change in the valuation technique for the year ended December 31, 2023.

Classification of land that is measured at fair value by fair value hierarchy levels as at December 31, 2023 and 2022, are as follows:


	2023
(in thousands of Korean won)	Level 1		Level 2		Level 3		Total
Land		—		—		111,950,474		111,950,474

	2022
(in thousands of Korean won)	Level 1		Level 2		Level 3		Total
Land		—		—		111,823,202		111,823,202

Table of Contents

KB SECURITIES CO., LTD. and Subsidiaries

Notes to the Consolidated Financial Statements

December 31, 2023 and 2022

Changes in land which is classified to Level 3 for the years ended December 31, 2023 and 2022, are as follows:


(in thousands of Korean won)	2023		2022
Beginning balance		111,823,202		65,029,822
Reclassification to property and equipment		127,272		387,310
Reclassification to investment properties		—		—
Disposal		—		(1,115,081	)
Changes in fair-valuation		—		47,521,151

Ending balance		111,950,474		111,823,202

Book amounts of land under cost model as at December 31, 2023 and 2022, are as follows:


	2023				2022
(in thousands of Korean won)	Under revaluation model		Under cost model		Under revaluation model		Under cost model
Land		111,950,474		28,369,717		111,823,202		28,242,445

Changes in other comprehensive income related to the revaluation for the year ended December 31, 2023 and 2022, are as follows:


	2023
(in thousands of Korean won)	Beginning balance			Other Change			Ending balance
Land		84,032,665			—			84,032,665
Income tax effects		(22,366,410	)		84,031			(22,282,379	)

		61,666,255			84,031			61,750,286


	2022
(in thousands of Korean won)	Beginning balance			Reclassification			Ending balance
Land		36,132,409			47,900,256			84,032,665
Income tax effects		(10,034,165	)		(12,332,245	)		(22,366,410	)

		26,098,244			35,568,011			61,666,255

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KB SECURITIES CO., LTD. and Subsidiaries

Notes to the Consolidated Financial Statements

December 31, 2023 and 2022

12. Investment Properties

The details of investment properties as at December 31, 2023 and 2022, are as follows:


	2023
(in thousands of Korean won)	Acquisition cost		Accumulated depreciation			Accumulated impairment			Accumulated revaluation			Book amount
Land		431,900,110		—			(485,836	)		(332,250	)		431,082,024
Buildings		219,869,836		(28,740,203	)		(5,289,310	)		—			185,840,323

		651,769,946		(28,740,203	)		(5,775,146	)		(332,250	)		616,922,347


	2022
(in thousands of Korean won)	Acquisition cost		Accumulated depreciation			Accumulated impairment			Accumulated revaluation			Book amount
Land		329,642,021		—			(332,250	)		(477,509	)		328,832,262
Buildings		283,263,254		(46,476,719	)		—			(5,198,652	)		231,587,883

		612,905,275		(46,476,719	)		(332,250	)		(5,676,161	)		560,420,145

The changes in investment properties for the years ended December 31, 2023 and 2022, are as follows:


	2023
(in thousands of Korean won)	Beginning balance		Acquisition 1		Disposal 2			Depreciation			Impairment			Others 3		Ending balance
Land		328,832,262		419,716,178		(267,612,788	)		—			(71,783,718	)		21,930,090		431,082,024
Buildings		231,587,883		149,310,809		(159,771,364	)		(9,490,947	)		(38,189,375	)		12,393,317		185,840,323

		560,420,145		569,026,987		(427,384,152	)		(9,490,947	)		(109,973,093	)		34,323,407		616,922,347

1	The amount of 290,197,489 thousand of investment properties held by subsidiaries acquired during the year ended December 31, 2023 are included.

2	The amount of 427,384,152 thousand of investment properties held by subsidiaries excluded from the consolidation during the year ended December 31, 2023 are included.

3	Others consist of foreign exchange differences and transfer from/to property and equipment.


	2022
(in thousands of Korean won)	Beginning balance		Acquisition		Disposal			Depreciation			Business Combination		Others 1			Ending balance
Land		756,126,554		—		(414,592,969	)		—			—		(12,701,323	)		328,832,262
Buildings		391,620,426		1,604,545		(153,057,197	)		(9,351,262	)		2,618,618		(1,847,247	)		231,587,883

		1,147,746,980		1,604,545		(567,650,166	)		(9,351,262	)		2,618,618		(14,548,570	)		560,420,145

1	Others consist of foreign exchange differences and transfer from/to property and equipment.

Details of income and expenditure on investment properties for the years ended December 31, 2023 and 2022, are as follows:


(in thousands of Korean won)	2023			2022
Rental income		37,427,218			41,378,496
Expenditure on operating investment properties		(21,101,698	)		(18,058,162	)
Expenditure on non-operating investment properties		(1,939	)		(153,330	)

		16,323,581			23,167,004

Table of Contents

KB SECURITIES CO., LTD. and Subsidiaries

Notes to the Consolidated Financial Statements

December 31, 2023 and 2022

Details of fair value of investment properties as at December 31, 2023 and 2022, are as follows:


	2023				2022
(in thousands of Korean won)	Book amount		Fair value		Book amount		Fair value
Land		431,082,024		485,437,515		328,832,262		325,981,165
Buildings		185,840,323		200,822,830		231,587,883		246,004,136

		616,922,347		686,260,345		560,420,145		571,985,301

The fair values of investment properties as at December 31, 2023 was evaluated by an independent appraiser. The independent appraiser has appropriate qualification and experience in evaluating real estate in the location of investment properties.

The fair value of investment property was measured by using benchmark price of similar properties and discounted cash flow (DCF) method. The fair value of investment property measured by DCF method is assessed by discounting net cash flow from investment property with risk adjusted discount rate, reflecting expected growth rate of rent market, period of empty, proportion of rent, period without rent charge and other cost related to promotion for rent. The factors which are significant but non-observable inputs for fair valuation are expected growth rate of rent market, period of empty, proportion of rent, period without rent charge and risk adjusted discount rate.

The fair value of investment property measured by using sales value of similar land is calculated by analyzing and comparing the sale prices of similar land, and also the access condition, environment condition and other specific factors for the purpose of estimation for fair value are considered.

The fair values of investment properties are classified as Level 3 based upon the inputs, which are used in valuation method.

There is no significant change in the valuation technique for the year ended December 31, 2023.

Details of investment properties provided as collaterals as at December 31, 2023 and 2022 is as follows:


	2023
(in thousands of Korean won)	Secured amount		Secured party	Details
Land and buildings		33,074,209	Signature Bank

		96,000,000	Hanhwa Life Insurance

		38,400,000	Tongyang Life Insurance

		36,480,000	Lotte Capital

		24,000,000	Kyobo Life Insurance

		150,600,000	Kookmin Bank

		22,800,000	Shinhan Bank

		18,000,000	Hana Bank		Collateralized borrowing

		3,600,000	Bukok branch of Uiwang Nonghyup

		2,400,000	Dodram Pig Farmers Cooperative

		1,200,000	Jeju Pig Farm Livestock Cooperative

		2,400,000	Suncheon Nonghyup

		2,400,000	Singimpo Nonghyup

Table of Contents

KB SECURITIES CO., LTD. and Subsidiaries

Notes to the Consolidated Financial Statements

December 31, 2023 and 2022

2022

(in thousands of Korean won)

Secured
amount

Secured party

Details

Land and buildings

33,798,891

Signature Bank

81,882,720

Landesbank Hessen-
Thuringen Girozentrale

Collateralized borrowing

236,788,850

LGIM COMMERCIAL
LENDING LIMITED

Investment properties are provided as collaterals for rental deposits and lease hold right, which amounts to 610,000 thousand and 610,000 thousand as at December 31, 2023 and 2022, respectively.

13. Intangible Assets

The details of intangible assets as at December 31, 2023 and 2022, are as follows:


	2023
(in thousands of Korean won)	Acquisition cost		Accumulated amortization			Accumulated impairment			Book amount
Goodwill		83,778,170		—			—			83,778,170
Development costs		271,791,803		(167,392,492	)		—			104,399,311
Software		128,721,093		(102,572,751	)		—			26,148,342
Memberships		42,995,638		(240,389	)		(8,079,512	)		34,675,737
Others		28,229,291		(4,107,193	)		(827,381	)		23,294,717

		555,515,995		(274,312,825	)		(8,906,893	)		272,296,277


	2022
(in thousands of Korean won)	Acquisition cost		Accumulated amortization			Accumulated impairment			Book amount
Goodwill		83,550,540		—			—			83,550,540
Development costs		186,869,610		(139,522,251	)		—			47,347,359
Software		120,472,571		(90,480,882	)		—			29,991,689
Memberships		37,847,587		(202,382	)		(9,960,904	)		27,684,301
Others		28,144,713		(4,036,797	)		(813,199	)		23,294,717

		456,885,021		(234,242,312	)		(10,774,103	)		211,868,606

The changes in intangible assets for the years ended December 31, 2023 and 2022, are as follows:


	2023
(in thousands of Korean won)	Beginning balance		Acquisition 1		Disposal			Amortization			Impairment 2			Reversal of Impairment 3		Others 4			Ending balance
Goodwill		83,550,540		—		—			—			—			—		227,630			83,778,170
Development costs		47,347,359		84,922,193		—			(27,870,241	)		—			—		—			104,399,311
Software		29,991,689		8,274,650		—			(12,097,652	)		—			—		(20,345	)		26,148,342
Memberships		27,684,301		5,962,498		(586,929	)		(36,866	)		(74,692	)		1,726,399		1,026			34,675,737
Others		23,294,717		—		—			—			—			—		—			23,294,717

		211,868,606		99,159,341		(586,929	)		(40,004,759	)		(74,692	)		1,726,399		208,311			272,296,277

1	Advance payments and others transferred from other accounts are included.

2	Memberships are composed of condominium and golf memberships, which are intangible assets with indefinite useful lives. The Group recognized a impairment loss because the market price of the asset is lower than book amount as at December 31, 2023.

3	Memberships are composed of condominium and golf memberships, which are intangible assets with indefinite useful lives. The Group recognized a reversal of impairment loss because the market price of the asset is higher than book amount as at December 31, 2023.

4	Others consist of foreign exchange differences and others.

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KB SECURITIES CO., LTD. and Subsidiaries

Notes to the Consolidated Financial Statements

December 31, 2023 and 2022


	2022
(in thousands of Korean won)	Beginning balance		Acquisition 1		Disposal			Amortization			Impairment 2			Reversal of Impairment 3		Others 4			Ending balance
Goodwill		72,422,758		10,712,158		—			—			—			—		415,624			83,550,540
Development costs		35,653,328		29,140,791		—			(17,446,759	)		—			—		(1	)		47,347,359
Software		26,255,476		14,098,002		—			(10,393,151	)		—			—		31,362			29,991,689
Memberships		27,646,008		1,745,855		(1,041,665	)		(36,662	)		(1,028,751	)		394,684		4,832			27,684,301
Others		23,294,717		—		—			—			—			—		—			23,294,717

		185,272,287		55,696,806		(1,041,665	)		(27,876,572	)		(1,028,751	)		394,684		451,817			211,868,606

1	Advance payments and others transferred from other accounts are included.

2	Memberships are composed of condominium and golf memberships, which are intangible assets with indefinite useful lives. The Group recognized a impairment loss because the market price of the asset is lower than book amount as at December 31, 2022.

3	Memberships are composed of condominium and golf memberships, which are intangible assets with indefinite useful lives. The Group recognized a reversal of impairment loss because the market price of the asset is higher than book amount as at December 31, 2022.

4	Others consist of foreign exchange differences and others.

14. Other Financial Assets

The details of other financial assets as at December 31, 2023 and 2022, are as follows:


(in thousands of Korean won)	2023			2022
Other receivables		3,382,250,943			2,237,040,540
Accrued income		252,660,082			203,371,150
Accrued interest on bonds		268,457,904			148,382,124
Guarantee deposits		63,224,390			68,149,689
Other		157,061,158			67,835,435
Provision for other financial assets		(50,713,294	)		(36,846,424	)

		4,072,941,183			2,687,932,514

15. Other Assets

The details of other assets as at December 31, 2023 and 2022, are as follows:


(in thousands of Korean won)	2023		2022
Other receivables		1,117		116,417,805
Advance payments		43,645,395		47,713,016
Prepaid expenses		99,249,390		87,829,601
Prepaid value-added taxes		539,337		954,019
Others		13,040,076		3,836,443

		156,475,315		256,750,884

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KB SECURITIES CO., LTD. and Subsidiaries

Notes to the Consolidated Financial Statements

December 31, 2023 and 2022

16. Deposit Liabilities

The details of deposit liabilities as at December 31, 2023 and 2022, are as follows:


(in thousands of Korean won)	2023		2022
Customers’ deposits
Customers’ deposits for brokerage		5,519,397,856		5,049,354,662
Customers’ deposits for exchange-traded derivatives trading		535,910,810		759,156,922
Customers’ deposits for subscription		—		904,010
Customers’ deposits for savings		5,880,012		6,445,014
Customers’ deposits for repo		61,587		61,600
Customers’ deposits for the investor of collective investment securities		249,819,423		324,357,905
Others		48,652		48,641

		6,311,118,340		6,140,328,754

Guarantee deposits
Guarantee deposits in foreign currency		395,717,894		190,255,947
Guarantee deposits in Korean won		415,758,876		468,648,375

		811,476,770		658,904,322

		7,122,595,110		6,799,233,076

17. Borrowings

The details of borrowings as at December 31, 2023 and 2022, are as follows:


(in thousands of Korean won)	2023			2022
Call money		1,240,000,000			830,000,000
Borrowings:
Borrowing from banks		653,687,366			471,777,010
Borrowing from KSFC		1,262,819,934			1,244,222,242
Asset-backed short-term bonds		2,345,088,679			3,264,247,029
CP borrowings		3,380,000,000			1,920,000,000
Others		578,649,778			436,023,703
Securities sold under repurchase agreements		9,036,097,623			6,231,390,409
Short-term note issued		9,587,511,022			7,249,429,201
Debentures:
Debentures		2,560,408,000			1,879,536,000
Less: discount on debentures issued		(4,106,067	)		(3,429,726	)

		30,640,156,335			23,523,195,868

The details of call money as at December 31, 2023 and 2022, are as follows:


(in thousands of Korean won)	Interest rate (%)		2023		2022
Samsung Asset Management Co., Ltd. and others		3.58~4.22		1,240,000,000		830,000,000

Table of Contents

KB SECURITIES CO., LTD. and Subsidiaries

Notes to the Consolidated Financial Statements

December 31, 2023 and 2022

The details of borrowings as at December 31, 2023 and 2022, are as follows:


(in thousands of Korean won)		Interest rate (%)		2023		2022
Borrowings from banks	Kookmin Bank and other		3.50~7.50		653,687,366		471,777,010
Borrowings from KSFC	KSFC		3.90~4.49		1,262,819,934		1,244,222,242
Asset-backed short-term bonds	SK Securities co., Ltd., and other		4.01~4.21		2,345,088,679		3,264,247,029
CP borrowings	Korea Investment & Securities Co., Ltd. and others		4.05~4.86		3,380,000,000		1,920,000,000
Others	KDB Capital co., Ltd. and others		0.00~12.00		578,649,778		436,023,703

					8,220,245,757		7,336,269,984

The details of securities sold under repurchase agreements as at December 31, 2023 and 2022, are as follows:


(in thousands of Korean won)	Interest rate (%)		2023		2022
Customers		0.00~6.00		5,578,817,182		4,181,390,409
Financial institution		2.49~4.15		3,457,280,441		2,050,000,000

				9,036,097,623		6,231,390,409

The details of short-term note issued as at December 31, 2023 and 2022, are as follows:


(in thousands of Korean won)	Interest rate (%)		2023		2022
Individual		3.10~6.00		6,560,366,893		4,650,359,585
Corporate		3.05~5.45		3,027,144,129		2,599,069,616

				9,587,511,022		7,249,429,201

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KB SECURITIES CO., LTD. and Subsidiaries

Notes to the Consolidated Financial Statements

December 31, 2023 and 2022

The details of debentures as at December 31, 2023 and 2022, are as follows:


(in thousands of Korean won)	Date issued		Maturity		Interest rate (%)		2023			2022
The 34-2nd unsecured public debenture		2018.03.09		2023.03.09		3.02		—			210,000,000
The 36-2nd unsecured public debenture		2019.04.18		2024.04.18		2.09		250,000,000			250,000,000
The 37-2nd unsecured public debenture		2019.06.14		2024.06.14		1.80		150,000,000			150,000,000
The 38-2nd unsecured public debenture		2020.06.11		2023.06.09		1.54		—			130,000,000
The 39-1st unsecured public debenture		2021.03.04		2024.03.04		1.31		110,000,000			110,000,000
The 39-2nd unsecured public debenture		2021.03.04		2026.03.04		1.70		120,000,000			120,000,000
The 40-1st unsecured public debenture		2021.04.23		2024.04.23		1.53		300,000,000			300,000,000
The 40-2nd unsecured public debenture		2021.04.23		2026.04.23		1.94		200,000,000			200,000,000
The 41-1st unsecured public debenture		2023.02.07		2025.02.07		3.88		330,000,000			—
The 41-2nd unsecured public debenture		2023.02.07		2026.02.06		3.85		210,000,000			—
The 42-1st unsecured public debenture		2023.06.26		2025.06.26		4.39		240,000,000			—
The 42-2nd unsecured public debenture		2023.06.26		2026.06.26		4.43		220,000,000			—
The 1st unsecured privately placed bond 1		2022.06.14		2024.12.14		4.50		2,900,000			4,000,000
The 1st unsecured privately placed bond 2		2023.09.15		2026.06.23		4.50		14,900,000			—
The 1st privately placed bond in foreign currency 3		2021.10.25		2024.10.25		2.35		25,788,000			25,346,000
The 21-1 public debenture in foreign currency 4		2021.11.01		2026.11.01		2.13		386,820,000			380,190,000
Less: Discount on debentures issued								(4,106,067	)		(3,429,726	)

								2,556,301,933			1,876,106,274

1	This privately placed bond was issued by subsidiary named Able Seun Co., Ltd.

2	This privately placed bond was issued by subsidiary named GDIC 2 Co.,Ltd.

3	This privately placed bond was issued by subsidiary named Newstar Sina Co., Ltd.

4	The issuance price of this public debenture is US$ 300,000,000.

The changes in borrowings for the years ended December 31, 2023 and 2022, are as follows:


(in thousands of Korean won)	2023			2022
Beginning balance		23,523,195,868			24,649,381,850
Increase in call money		410,000,000			790,000,000
Increase(decrease) in borrowings from banks		181,910,356			(14,091,534	)
Increase in borrowings from KSFC		18,597,692			151,126,185
Increase(decrease) in asset-backed short-term bond		(919,158,350	)		1,236,689,448
Increase in CP borrowings		1,460,000,000			1,920,000,000
Increase(decrease) in other borrowings		142,626,075			(136,828,030	)
Increase(decrease) in securities sold under repurchase agreements		2,804,707,214			(7,299,818,541	)
Increase in short-term note issued		2,338,081,821			2,774,283,871
Increase(decrease) in debentures		680,195,659			(547,547,381	)

Ending balance		30,640,156,335			23,523,195,868

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KB SECURITIES CO., LTD. and Subsidiaries

Notes to the Consolidated Financial Statements

December 31, 2023 and 2022

18. Post-employment Benefits

18.1 Defined Benefit Plans

The details of defined benefit liabilities as at December 31, 2023 and 2022, are as follows:


(in thousands of Korean won)	2023			2022
Present value of defined benefit obligations		75,835,223			67,937,239
Fair value of plan assets		(13,270,798	)		(12,430,101	)

Net defined benefit liabilities		62,564,425			55,507,138

The changes in the defined benefit obligation for the years ended December 31, 2023 and 2022, are as follows:


(in thousands of Korean won)	2023			2022
Beginning balance		67,937,239			70,914,622
Current service cost		19,841,212			22,206,320
Past service cost		—			2,910,303
Interest cost		2,511,195			1,151,821
Remeasurements
Actuarial gains and losses arising from changes in demographic assumptions		—			(6,811,193	)
Actuarial gains and losses arising from changes in financial assumptions		5,658,388			(13,735,991	)
Actuarial gains and losses arising from experience adjustment		1,113,813			16,610,121
Payments from plans		(521,708	)		(8,301,323	)
Payments from the Group		(19,792,154	)		(19,507,349	)
Transfer from related companies		—			2,438,159
Transfer to related companies		(912,762	)		(370,486	)
Settlement		—			(78,335	)
Gain or loss on settlement		—			(1,871,249	)
Effects from business combination and disposal of business		—			2,634,640
Other		—			(252,821	)

Ending balance		75,835,223			67,937,239

The changes in the fair value of plan assets for the years ended December 31, 2023 and 2022, are as follows:


(in thousands of Korean won)	2023			2022
Beginning balance		(12,430,101	)		(15,294,733	)
Interest income		(610,329	)		(178,723	)
Remeasurements:
Return on plan assets (excluding amounts included in interest income)		35,161			157,107
Contributions by employers		(1,700,000	)		(3,347,403	)
Payments from plans:
Benefits paid		521,709			8,301,323
Transfer from related companies		—			(2,438,158	)
Transfer to related companies		912,762			370,486

Ending balance		(13,270,798	)		(12,430,101	)

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KB SECURITIES CO., LTD. and Subsidiaries

Notes to the Consolidated Financial Statements

December 31, 2023 and 2022

Plan assets are composed of the detail assets that have no quoted price in active market. The details of plan assets as at December 31, 2023 and 2022, are as follows:


	2023				2022
(in thousands of Korean won)	Fair value		Composition(%)		Fair value		Composition(%)
Cash and deposits		8,202,579		61.81		8,853,577		71.23
Investment funds		5,068,219		38.19		3,576,524		28.77

		13,270,798		100.00		12,430,101		100.00

Key actuarial assumptions used as at December 31, 2023 and 2022, are as follows:


	2023	2022
Discount rate	DB(including special retirement by salaries peak plan) 4.3% Compensation promotion DC 3.7 %	DB(including special retirement by salaries peak plan) 5.1% Compensation promotion DC 5.0 %

Expected salary growth rate	DB : executives 4.9% DC: Promotion + Base up 2.6% Special retirement by salaries peak plan: 4.9%	DB : executives 0% DC: Promotion + Base up 2.3% Special retirement by salaries peak plan: 4.6%

The sensitivity analysis for significant actuarial assumptions used to determine the present value of the defined benefit obligation as at December 31, 2023, are as follows:


	Effect on the present value of defined benefit obligation
(in thousands of Korean won)	Changes in assumption			Increase			Decrease
Discount rate		0.50	%		(1,920,920	)		2,038,338
Expected salary growth rate1		0.50	%		1,913,283			(1,813,236	)
Retirement rate		0.50	%		(1,518,999	)		1,601,352

1	The sensitivity analysis for the expected salary growth rate is limited to special retirement by salaries peak plan and DB.

The above sensitivity analyses are based on a change in an assumption while holding all other assumptions constant. The sensitivity of the present value of the defined benefit obligation to changes in actuarial assumptions is calculated using the projected unit credit method, the same method applied when calculating the defined benefit obligations.

The methods and assumptions used in preparing the sensitivity analyses did not change compared to the previous period.

The effect of defined benefit plan on future cash inflows: Expected maturity analysis of undiscounted pension benefits as at December 31, 2023, is as follows:


(in thousands of Korean won)	Less than 1 year		Between 1 and 2 years		Between 2 and 5 years		Between 5 and 10 years		Over 10 years		Total
Pension benefits1		4,617,334		7,784,708		26,818,513		32,688,752		74,637,317		146,546,624

1	Fixed pension benefits of 12.9 billion under promotion compensation defined contribution plan are excluded.

The weighted average duration of the defined benefit obligations is 5.92 years.

Expected contribution to post-employment benefit plans for the year ending December 31, 2024 is 1,370,000 thousand.

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KB SECURITIES CO., LTD. and Subsidiaries

Notes to the Consolidated Financial Statements

December 31, 2023 and 2022

18.2 Defined Contribution Plans

The Group recognized the expenses of 7,211,349 thousand and 9,212,523 thousand for defined contribution plans for the years ended December 31, 2023 and 2022, respectively.

19. Provisions

The details of provisions as at December 31, 2023 and 2022, are as follows:


(in thousands of Korean won)	2023		2022
Provisions for non-financial guarantees		6,414,834		1,456,106
Provisions for asset retirement obligation 1		9,058,920		8,802,261
Provisions for lawsuits		111,425,114		51,221,194
Provisions for others		86,089,255		89,485,845

		212,988,123		150,965,406

1	The Group recognized the provision for asset retirement obligation in connection with the leased asset for the expenditures expected to recover the asset.

The changes in provisions for non-financial guarantees for the years ended December 31, 2023 and 2022 are as follows,


	2023
(in thousands of Korean won)	The financial instruments applying 12-month expected credit losses		The financial instruments applying lifetime expected credit losses
			Non-impaired			Impaired
Beginning		1,223,748		232,358			—
Provision for losses (reversal of provision)		4,994,143		(35,634	)		—
Other transfer(foreign exchange and other)		219		—			—

Ending		6,218,110		196,724			—


	2022
(in thousands of Korean won)	The financial instruments applying 12-month expected credit losses			The financial instruments applying lifetime expected credit losses
				Non-impaired		Impaired
Beginning		1,642,264			38,146		—
Provision for losses (reversal of provision)		(418,773	)		194,212		—
Other transfer(foreign exchange and other)		257			—		—

Ending		1,223,748			232,358		—

Table of Contents

KB SECURITIES CO., LTD. and Subsidiaries

Notes to the Consolidated Financial Statements

December 31, 2023 and 2022

The changes in other provisions for the years ended December 31, 2023 and 2022, are as follows:


	2023
(in thousands of Korean won)	Provisions for asset retirement obligation			Provisions for lawsuits			Provisions for others			Total
Beginning		8,802,261			51,221,194			89,485,845			149,509,300
Contribution 1		259,114			57,194,551			8,518,938			65,972,603
Reversal		(77,219	)		—			(8,100,000	)		(8,177,219	)
Use		—			(150,631	)		(655,528	)		(806,159	)
Amortization of discounts		74,764			—			—			74,764
Other 1		—			3,160,000			(3,160,000	)		—

Ending		9,058,920			111,425,114			86,089,255			206,573,289

1	As a lawsuit was filed during the year ended December 31, 2023, the estimated loss on the sale of funds related to Lime Asset Management was replaced to provisions for lawsuits.


	2022
(in thousands of Korean won)	Provisions for asset retirement obligation			Provisions for lawsuits			Provisions for the points			Provisions for others			Total
Beginning		7,997,559			25,150,111			2,569,985			68,725,325			104,442,980
Contribution 1		1,026,723			25,165,908			2,451,694			33,991,287			62,635,612
Reversal		—			—			—			(4,038,034	)		(4,038,034	)
Use		(423,495	)		(1,229,477	)		(2,788,799	)		(7,058,081	)		(11,499,852	)
Amortization of discounts		201,474			—			—			—			201,474
Other 2		—			2,134,652			(2,232,880	)		(2,134,652	)		(2,232,880	)

Ending		8,802,261			51,221,194			—			89,485,845			149,509,300

1	As the first-instance verdict of the relevant trial was announced after the reporting period, additional provisions for lawsuits were recognized as an adjusting event after the reporting period.

2	As a lawsuit was filed during the year ended December 31, 2022, the estimated loss on the sale of funds related to Lime Asset Management was replaced to provisions for lawsuits.

20. Other Financial Liabilities

The details of other financial liabilities as at December 31, 2023 and 2022, are as follows:


(in thousands of Korean won)	2023		2022
Other payables		3,486,888,893		1,974,490,601
Accrued expenses		135,165,654		106,815,440
Financial guarantee liabilities		11,929,888		2,026,739
Provisions for financial guarantee contracts		142,308		—
Leasehold deposits received		16,255,758		8,894,337
Non-controlling liabilities		85,133,560		164,222,254
Lease liabilities		108,095,746		125,593,239
Others		50,796,893		7,498,861

		3,894,408,700		2,389,541,471

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KB SECURITIES CO., LTD. and Subsidiaries

Notes to the Consolidated Financial Statements

December 31, 2023 and 2022

The changes in liabilities of the provisions for financial guarantee contracts for the years ended December 31, 2023 and 2022 are as follows:


(in thousands of Korean won)	2023
	The financial instruments applying 12-month expected credit losses		The financial instruments applying lifetime expected credit losses
			Non-impaired		Impaired
Beginning		—		—		—
Provision		142,308		—		—

Ending		142,308		—		—


(in thousands of Korean won)	2022
	The financial instruments applying 12-month expected credit losses			The financial instruments applying lifetime expected credit losses
				Non-impaired		Impaired
Beginning		66,218			—		—
Reversal of provision		(66,218	)		—		—

Ending		—			—		—

21. Other Liabilities

The details of other liabilities as at December 31, 2023 and 2022, are as follows:


(in thousands of Korean won)	2023		2022
Accounts payables		16,495,445		31,630
Accrued expenses		240,392,084		179,569,070
Accrued dividends		6,983,904		2,952,757
Advances from customers		8,154,878		7,048,181
Unearned revenue		36,589,758		215,363,367
Taxes withheld		48,004,744		44,787,661
Other long-term employee benefits		7,075,329		7,176,237
Others		8,196,090		16,185,601

		371,892,232		473,114,504

22. Share Capital

The details of share capital as at December 31, 2023 and 2022, are as follows:

(in thousands of Korean won except per share)

Authorized shares

Outstanding shares

Par value

per share

2023

2022

Ordinary share

1,000,000,000
shares

298,620,424

5,000
won

1,493,102,120

There are no changes in ordinary shares for the years ended December 31, 2023 and 2022.

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KB SECURITIES CO., LTD. and Subsidiaries

Notes to the Consolidated Financial Statements

December 31, 2023 and 2022

23. Hybrid Securities

Details of hybrid security classified as equity as of December 31, 2023 and 2022, are as follows:


(in thousands of Korean won)	Issuance date		Maturity		Interest rate (%)		2023		2022
Bond-type Hybrid Securities No.11		March 31, 2022		Permanent		4.30		208,010,652		208,010,752
Bond-type Hybrid Securities No.2		May 30, 2022		Permanent		4.80		48,170,880		48,170,780
Bond-type Hybrid Securities No.32		September 30, 2022		Permanent		5.50		249,948,780		249,948,780
Bond-type Hybrid Securities No.43		May 8, 2023		Permanent		5.35		119,963,080		—

								626,093,392		506,130,312

1	As at December 31, 2023 and 2022, among the hybrid securities issued by the Group, the balance held by KB Financial Group, a related party of the Group, is 200,000 million.

2	As at December 31, 2023 and 2022, among the hybrid securities issued by the Group, the balance held by KB Financial Group, a related party of the Group, is 230,000 million.

3	As at December 31, 2023, among the hybrid securities issued by the Group, the balance held by KB Financial Group, a related party of the Group, is 100,000 million.

The Group may extend the maturity under the same conditions at the time of maturity of the above hybrid securities, and interest payment may be deferred except in cases where a cash dividend or stock dividend has been resolved for common stock. Above hybrid securities are early redeemable by the Group after 5 years from the issuance date and each interest payment date thereafter.

24. Other Paid-in Capital

The details of other paid-in capital as at December 31, 2023 and 2022, are as follows:


(in thousands of Korean won)	2023			2022
Share premium 1		1,142,353,750			1,142,353,750
Gains and losses on sale of treasury share		(45,331,811	)		(45,331,811	)
Other equity 2		381,666,039			381,666,039

		1,478,687,978			1,478,687,978

1	Share premium was previously paid from stock issuance and new stock issuance due to merger and can only be used for capitalization and deficit recovery.

2	Other equity arose from the paid-in capital increase of preferred share and gains on merger.

There is no change in other paid-in capital for the years ended December 31, 2023 and 2022.

Table of Contents

KB SECURITIES CO., LTD. and Subsidiaries

Notes to the Consolidated Financial Statements

December 31, 2023 and 2022

25. Retained Earnings

The details of retained earnings as at December 31, 2023 and 2022, are as follows:


(in thousands of Korean won)	2023		2022
Legal reserve
Earned surplus reserve 1		158,656,298		128,656,298
Reserve for liability to compensate for damages 2		500,000		500,000
Voluntary reserves		1,678,600,357		1,839,996,358
Regulatory reserve for credit losses 3		100,315,429		101,842,161
Unappropriated retained earnings		366,230,628		(32,545,040	)

		2,304,302,712		2,038,449,777

The Commercial Act of the Republic of Korea requires the Group to appropriate, as a legal reserve, an amount equal to a minimum of 10% of cash dividends paid until such reserve equals 50% of its issued share capital. The reserve is not available for the payment of cash dividends, but may be transferred to share capital or used to reduce accumulated deficit.

The Parent Company provides reserve for loss on electronic financial transactions to make reparation for the damage in process of the electronic transfers or operations. Also, the Parent Company provides reserve to compensate for inflicted damage on a credit information subject when violating the Credit Information Use and Protection Act.

3	The Group accumulates allowances for possible loan losses in accordance with Korean IFRS and reserve for possible loan losses as much as the amount below the provision of allowances according to minimum accumulation ratio required by Financial Supervisory Service.

Changes in retained earnings for the years ended December 31, 2023 and 2022, are as follows:


(in thousands of Korean won)	2023			2022
Beginning balance		2,038,449,777			2,247,970,109
Profit for the year		395,015,483			193,697,356
Dividends		(100,000,000	)		(400,000,000	)
Dividends of hybrid securities		(29,162,548	)		(3,479,007	)
Transfer to gain due to disposal of revaluation assets		—			261,319

Ending balance		2,304,302,712			2,038,449,777

The amount of dividends and dividends per share for the years ended December 31, 2023 and 2022, are as follows:

2023

(in Korean won and number of shares)

Type of
share

Number of
shares
outstanding

Number of
treasury

Number of
dividend
shares

Dividend
per share

Total dividend

(In thousands of
Korean won)

Annual dividend

Ordinary
share

298,620,424
shares

—

298,620,424

334

100,000,000

2022

(in Korean won and number of shares)

Type of
share

Number of
shares
outstanding

Number of
treasury

Number of
dividend
shares

Dividend
per share

Total dividend

(In thousands of
Korean won)

Interim dividend

Ordinary
share

298,620,424
shares

—

298,620,424

669

200,000,000

Annual dividend

Ordinary
share

298,620,424
shares

—

298,620,424

669

200,000,000

Table of Contents

KB SECURITIES CO., LTD. and Subsidiaries

Notes to the Consolidated Financial Statements

December 31, 2023 and 2022

Payout and dividend yield ratios as at December 31, 2023 and 2022, are as follows:


	2023			2022
	Ordinary share			Ordinary share
	Annual dividend			Interim dividend			Annual dividend
Number of shares outstanding		298,620,424			298,620,424			298,620,424
Number of treasury shares		—			—			—
Number of dividend shares		298,620,424			298,620,424			298,620,424
Par value per share (in Korean won)		5,000			5,000			5,000
Payout ratio		10.04	%		13.39	%		6.69	%
Scheduled dividends (in thousands of Korean won)		150,000,000			200,000,000			100,000,000
Dividends per share (in Korean won)		502			669			334

The Group accumulates allowances for possible loan losses in accordance with Korean IFRS and reserve for possible loan losses as much as the amount below the provision of allowances according to minimum accumulation ratio required by Regulation on Supervision of Financial Investment.

Regulatory reserve for credit losses, a type of voluntary reserve for retained earnings, reverses the exceeding amount if the beginning balance of the reserve exceeds the ending balance at the closing date. Regulatory reserve for credit losses is generally recognized after unappropriated deficit is disposed.

The details of the regulatory reserve for credit losses (reversal of reserve) to be appropriated as at December 31, 2023 and 2022, are as follows:


(in thousands of Korean won)	2023			2022
Beginning		100,315,429			101,842,161
Amounts to be reserved (reversed)		(53,015,036	)		(1,526,732	)

Ending		47,300,393			100,315,429

The adjusted profit of the year after reflection of reversal (provision) of reserve for credit losses for the years ended December 31, 2023 and 2022, are as follows:


(in thousands of Korean won)	2023		2022
Profit for the year before reserve for credit loss		388,027,837		194,827,662
Amounts to be reversed (reserved)		53,015,036		1,526,732

Adjusted profit after reversed (provision) of reserve for credit losses1		441,042,873		196,354,394

Reserve for credit loss is announced by Article 3 Clause 8 of the Regulation on Financial Investment Business. Adjusted profit after reserve for credit losses is not based on Korean IFRS and is calculated on the assumption that provision or reversal of reserve for credit losses before tax is adjusted to the profit.

Table of Contents

KB SECURITIES CO., LTD. and Subsidiaries

Notes to the Consolidated Financial Statements

December 31, 2023 and 2022

26. Other Components of Equity

The details of other components of equity as at December 31, 2023 and 2022, are as follows:


(in thousands of Korean won)	2023			2022
Changes in the fair value of financial assets at FVOCI		289,671,988			233,760,812
Share of other comprehensive income of associates		(6,586,082	)		(2,571,874	)
Revaluation surplus		62,144,795			62,060,360
Remeasurements of net defined benefit liabilities		(42,790,562	)		(37,781,761	)
Exchange differences on translation of foreign operations		48,609,018			45,820,903
Hedge of net investments in foreign operations		(16,769,049	)		(19,066,669	)
Gain or loss on financial liabilities designated at FVTPL due to the change of credit risk		(11,782,162	)		41,080,867

		322,497,946			323,302,638

The changes in gain or loss on valuation of financial assets at FVOCI for the years ended December 31, 2023 and 2022, are as follows:


(in thousands of Korean won)	2023			2022
Beginning balance		233,760,812			216,494,145
Gain (loss) on valuation		61,622,064			11,241,986
Tax effect of gain (loss) on valuation 1		(15,919,147	)		(39,698	)
Transfer to gain due to disposal or impairment		13,869,917			8,187,321
Tax effect of transfer 1		(3,661,658	)		(2,122,942	)

Ending balance		289,671,988			233,760,812

1	Including income tax effect (Note 35)

The changes in the Group’s share of other comprehensive income of associates for the years ended December 31, 2023 and 2022, are as follows:


(in thousands of Korean won)	2023			2022
Beginning balance		(2,571,874	)		(9,779	)
Changes of other comprehensive income of associates		(5,435,482	)		(2,806,800	)
Tax effect 1		1,421,274			244,705

Ending balance		(6,586,082	)		(2,571,874	)

1	Including income tax effect (Note 35)

The changes in gain on revaluation of property and equipment for the years ended December 31, 2023 and 2022, are as follows:


(in thousands of Korean won)	2023		2022
Beginning balance		62,060,360		26,749,635
Net gain on revaluation of property and equipment		—		47,900,256
Tax effect related to net gain on revaluation1		84,435		(12,328,212	)
Transfer to retained earnings due to disposal of Property and equipment and others		—		(261,319	)

Ending balance		62,144,795		62,060,360

1	Including income tax effect (Note 35)

Table of Contents

KB SECURITIES CO., LTD. and Subsidiaries

Notes to the Consolidated Financial Statements

December 31, 2023 and 2022

The changes in remeasurements of the net defined benefit liability for the years ended December 31, 2023 and 2022, are as follows:


(in thousands of Korean won)	2023			2022
Beginning balance		(37,781,761	)		(40,520,752	)
Changes due to valuation		(6,807,362	)		3,779,955
Tax effect 1		1,798,561			(1,040,964	)

Ending balance		(42,790,562	)		(37,781,761	)

1	Including income tax effect (Note 35)

The changes in exchange differences on translation of foreign operations for the years ended December 31, 2023 and 2022, are as follows:


(in thousands of Korean won)	2023			2022
Beginning balance		45,820,903			12,877,767
Exchange differences on foreign operations translation		2,232,438			33,272,037
Tax effect 1		(589,364	)		(8,817,090	)
Non-controlling interest		1,145,041			817,442
Transferred to equity related to the disposal group classified as held for sale		—			7,670,747

Ending balance		48,609,018			45,820,903

1	Including income tax effect (Note 35)

The changes in gain or loss on valuation of hedge of net investments in foreign operations for the years ended December 31, 2023 and 2022, are as follows:


(in thousands of Korean won)	2023			2022
Beginning balance		(19,066,669	)		(13,316,283	)
Gain (loss) on net investment in a foreign operation hedge		1,575,766			(16,003,726	)
Re-classification to net income due to the end of net investments in foreign operations		1,546,000			8,429,967
Tax effect 1		(824,146	)		1,823,373

Ending balance		(16,769,049	)		(19,066,669	)

1	Including income tax effect (Note 35)

The change in gain or loss on financial liabilities designated at FVTPL due to the change of credit risk for the years ended December 31, 2023 and 2022, are as follows:


(in thousands of Korean won)	2023			2022
Beginning balance		41,080,867			2,225,783
Changes		(71,900,708	)		52,822,291
Tax effect 1		19,037,679			(13,967,207	)

Ending balance		(11,782,162	)		41,080,867

1	Including income tax effect (Note 35)

Table of Contents

KB SECURITIES CO., LTD. and Subsidiaries

Notes to the Consolidated Financial Statements

December 31, 2023 and 2022

27. Fee and Commission Income and Expense

The details of fee and commission income for the years ended December 31, 2023 and 2022, are as follows:


(in thousands of Korean won)	2023		2022
Brokerage commissions		528,344,748		440,988,001
Underwriting commissions		134,584,680		158,574,302
Brokerage commissions on collective investment securities		19,252,925		19,850,174
Management fee on collective investment securities		52,488		126,162
Management fee on asset management		21,931,822		25,250,989
Commissions on merger and acquisition		90,533,155		129,236,138
Trust fees and commissions		18,564,028		17,996,232
Other commissions		133,202,834		147,681,784

		946,466,680		939,703,782

The details of fee and commission expense for the years ended December 31, 2023 and 2022, are as follows:


(in thousands of Korean won)	2023		2022
Trading commission		57,002,737		49,037,488
Advisory fees		1,038,490		1,664,749
Investment management delegation fees		2,645,846		3,537,986
Commission fees on group brand		26,155,388		15,661,129
Contributions to external institutions		8,023,014		8,093,205
Others		144,475,915		116,472,809

		239,341,390		194,467,366

28. Gain or Loss on Valuation and Disposal of Financial Instruments

The details of gain or loss on valuation and disposal of financial instruments for the years ended December 31, 2023 and 2022, are as follows:


	2023
(in thousands of Korean won)	Gain		Loss		Net
Financial instruments at FVTPL		1,960,110,095		1,220,329,725		739,780,370
Financial instruments designated at FVTPL		727,598,407		1,057,169,764		(329,571,357	)
Derivative financial instruments		5,030,853,889		5,207,801,032		(176,947,143	)
Financial assets at FVOCI 1		3,240,874		3,579,803		(338,929	)

		7,721,803,265		7,488,880,324		232,922,941

1	Gain or loss on valuation of financial assets at FVOCI is excluded.


	2022
(in thousands of Korean won)	Gain		Loss		Net
Financial instruments at FVTPL		1,310,630,422		2,049,888,240		(739,257,818	)
Financial instruments designated at FVTPL		1,188,229,550		429,243,880		758,985,670
Derivative financial instruments		8,176,134,413		8,557,742,085		(381,607,672	)
Financial assets at FVOCI 1		525,431		16,448,206		(15,922,775	)

		10,675,519,816		11,053,322,411		(377,802,595	)

1	Gain or loss on valuation of financial assets at FVOCI is excluded.

Table of Contents

KB SECURITIES CO., LTD. and Subsidiaries

Notes to the Consolidated Financial Statements

December 31, 2023 and 2022

The details of gain or loss on valuation and disposal of financial instruments at FVTPL for the years ended December 31, 2023 and 2022, are as follows:


	2023
(in thousands of Korean won)	Gain		Loss		Net
Financial assets at FVTPL		1,768,973,033		713,815,890		1,055,157,143
Financial liabilities at FVTPL		191,137,062		506,513,835		(315,376,773	)

		1,960,110,095		1,220,329,725		739,780,370


	2022
(in thousands of Korean won)	Gain		Loss		Net
Financial assets at FVTPL		1,199,535,387		1,987,265,746		(787,730,359	)
Financial liabilities at FVTPL		111,095,035		62,622,494		48,472,541

		1,310,630,422		2,049,888,240		(739,257,818	)

The details of gain or loss on valuation and disposal of financial instruments designated at FVTPL for the years ended December 31, 2023 and 2022, are as follows:


	2023
(in thousands of Korean won)	Gain		Loss		Net
Financial liabilities designated at FVTPL
Derivatives-linked securities sold		567,910,956		879,330,365		(311,419,409	)
Other OTC derivative-combined contract sold		129,915,134		154,821,326		(24,906,192	)
Exchange traded notes sold		29,772,317		23,018,073		6,754,244

		727,598,407		1,057,169,764		(329,571,357	)


	2022
(in thousands of Korean won)	Gain		Loss		Net
Financial liabilities designated at FVTPL
Derivatives-linked securities sold		914,565,927		359,592,452		554,973,475
Other OTC derivative-combined contract sold		244,528,092		52,797,971		191,730,121
Exchange traded notes sold		29,135,531		16,853,457		12,282,074

		1,188,229,550		429,243,880		758,985,670

Table of Contents

KB SECURITIES CO., LTD. and Subsidiaries

Notes to the Consolidated Financial Statements

December 31, 2023 and 2022

The details of gain or loss on valuation and disposal of derivative financial instruments for the years ended December 31, 2023 and 2022, are as follows:


	2023
(in thousands of Korean won)	Gain		Loss		Net
Interest rate		2,136,570,921		2,158,941,303		(22,370,382	)
Currency		701,517,262		726,543,492		(25,026,230	)
Stock		1,952,842,360		2,095,561,409		(142,719,049	)
Credit		32,631,396		35,689,309		(3,057,913	)
Commodity		30,829,129		42,149,844		(11,320,715	)
Others		176,462,821		148,915,675		27,547,146

		5,030,853,889		5,207,801,032		(176,947,143	)


	2022
(in thousands of Korean won)	Gain		Loss		Net
Interest rate		4,490,512,732		4,271,428,797		219,083,935
Currency		1,596,009,463		1,457,126,463		138,883,000
Stock		1,935,095,420		2,446,918,853		(511,823,433	)
Credit		38,991,621		31,943,503		7,048,118
Commodity		33,575,544		30,167,440		3,408,104
Others		81,949,633		320,157,029		(238,207,396	)

		8,176,134,413		8,557,742,085		(381,607,672	)

The details of gain or loss on valuation and disposal of financial assets at FVOCI for the years ended December 31, 2023 and 2022, are as follows:


	2023
(in thousands of Korean won)	Gain		Loss		Net
Debt instruments		3,240,875		3,579,803		(338,928	)


	2022
(in thousands of Korean won)	Gain		Loss		Net
Debt instruments		525,431		16,448,206		(15,922,775	)

As at December 31, 2023, the Group holds PIS(Portfolio Index Swap) in connection with Lime Tethys Qualified Investor Private Investment Trust No. 2 and Lime Pluto FI Qualified Investor Private Investment Trust D-1, which were prohibited to repurchase in the fourth quarter of 2019. The Group holds beneficiary certificates and TRS contracts of 146.3 billion (nominal amount), respectively. Meanwhile, the Group sold 68.1 billion in subsidiary funds of the fund.

On October 20, 2020, Lime Asset Management’s license as a fund manager was revoked by the Financial Supervisory Service’s sanctions review committee, and most of its redemption-suspended funds and normal funds will be transferred to Wellbridge Asset Management (the bridge management company) to continue collecting and distributing investments. It is difficult to predict whether and when the aforementioned redemption-suspended funds will be redeemed. As of December 31, 2023, four lawsuits were filed to the Group as a defendant.

Table of Contents

KB SECURITIES CO., LTD. and Subsidiaries

Notes to the Consolidated Financial Statements

December 31, 2023 and 2022

29. Interest Income and Interest Expense

The details of interest income for the years ended December 31, 2023 and 2022, are as follows:


(in thousands of Korean won)	2023		2022
Interest on financial assets at FVTPL
Interest on debt instruments at FVTPL		628,600,472		396,607,418
Interest on loans at FVTPL		—		4,189,123
Interest on commercial papers		182,112,270		142,422,181

		810,712,742		543,218,722

Interest on financial assets at FVOCI and financial assets measured at amortised cost
Interest on loans measured at amortised cost		11,026,006		9,409,656
Interest on debt instruments at FVOCI		170,895,226		76,499,887
Interest on broker’s loans		266,845,644		236,159,728
Interest on loans		343,040,031		225,699,957
Interest on deposits with KSFC		22,932,437		9,784,119
Interest on certificates of deposit		9,375,893		—
Interest on deposits with financial institution		356,594		26,600
Interest on bonds purchased under resale agreements		42,484,716		16,041,014
Gains on transactions of certificates of deposits		69,266		51,521
Interest on deposits		50,794,814		26,938,070
Interest on other receivables		764,747		1,006,504
Others 1		34,286,947		15,194,408

		952,872,321		616,811,464

		1,763,585,063		1,160,030,186

1	Interest on lease receivables of 935 million and 1,084 million for the year ended December 31, 2023 and 2022, respectively, are included.

The details of interest expense for the years ended December 31, 2023 and 2022, are as follows:


(in thousands of Korean won)	2023		2022
Interest on borrowings		146,014,978		80,720,746
Fees for the proceeds from the sale of stocks loaned		650,899		830,841
Interest on customers’ deposits		54,673,467		32,433,283
Interest on bonds sold under repurchase agreements		309,464,045		171,398,994
Losses on transactions of certificates of deposit		—		76
Interest on debentures		62,664,169		43,800,902
Interest on short-term note issued		429,887,015		163,134,122
Interest on asset-backed short-term bonds		131,221,020		107,825,509
Others 1		14,218,657		17,964,855

		1,148,794,250		618,109,328

1	Interest on lease liabilities of 4,881 million and 3,574 million for the year ended December 31, 2023 and 2022, respectively, are included.

Table of Contents

KB SECURITIES CO., LTD. and Subsidiaries

Notes to the Consolidated Financial Statements

December 31, 2023 and 2022

30. Gain or Loss on Valuation and Disposal of Financial Assets measured at Amortised Costs

The detail of gain or loss on valuation and disposal of financial assets measured at amortised cost for the years ended December 31, 2023 and 2022, are as follows:


(in thousands of Korean won)	2023			2022
Gain(loss) on valuation of financial assets measured at amortised cost
Reversal(provision) of allowance for credit losses of loans		(123,584,912	)		(22,255,908	)
Reversal(provision) of allowance for credit losses of deposits		354,995			(12,598	)
Reversal(provision) of allowance for credit losses of other financial assets		(15,162,352	)		(6,901,629	)
Gain(loss) on disposal of financial assets measured at amortised cost
Gain(loss) on disposal of loans measured at amortised cost		(4,382,553	)		(6,094,227	)

		(142,774,822	)		(35,264,362	)

31. Gain or Loss on Foreign Currency Transactions

The details of gain on foreign currency transactions for the years ended December 31, 2023 and 2022, are as follows:


(in thousands of Korean won)	2023		2022
Gain on foreign currency transactions		827,979,039		1,159,670,794
Gain on foreign exchange translation		102,004,206		103,735,617

		929,983,245		1,263,406,411

The details of loss on foreign currency transactions for the years ended December 31, 2023 and 2022, are as follows:


(in thousands of Korean won)	2023		2022
Loss on foreign currency transactions		788,318,378		1,121,891,568
Loss on foreign exchange translation		85,998,974		143,828,278

		874,317,352		1,265,719,846

Table of Contents

KB SECURITIES CO., LTD. and Subsidiaries

Notes to the Consolidated Financial Statements

December 31, 2023 and 2022

32. Other Operating Income and Other Operating Expenses

The details of other operating income for the years ended December 31, 2023 and 2022, are as follows:


(in thousands of Korean won)	2023		2022
Dividend income		63,770,979		58,263,080
Distribution income		86,367,283		108,397,229
Reversal of provision for credit loss		817,283		866,708
Operating lease income		35,488,112		39,510,613
Others		27,872,532		15,862,203

		214,316,189		222,899,833

The details of other operating expenses for the years ended December 31, 2023 and 2022, are as follows:


(in thousands of Korean won)	2023		2022
Provision for credit loss		5,918,100		575,929
Others		92,413,704		26,511,442

		98,331,804		27,087,371

33. Selling and Administrative Expenses

(a)	The details of selling and administrative expenses for the years ended December 31, 2023 and 2022, are as follows:


(in thousands of Korean won)	2023		2022
Labor Costs
Salaries		448,871,610		376,100,893
Post-employment benefits		28,953,427		33,430,995
Retirement bonus		1,280,577		22,686,894
Other long-term employee benefits		1,313,191		(454,613	)
Employee benefits		90,995,958		87,485,403

		571,414,763		519,249,572

Other selling and administrative expenses
Employee benefits		11,347,871		11,528,107
Sales promotion expenses		864,713		754,374
Computer system operation expenses		63,341,793		51,106,507
Management expenses for rent		20,658,152		19,660,703
Commissions		26,206,754		30,021,900
Research and development		281,008		495,341
Advertising expenses		29,048,118		27,793,451
Depreciation		50,640,026		51,040,964
Training expenses		2,622,960		3,043,596
Amortization expenses of intangible assets		40,004,759		27,876,572
Taxes and dues		37,389,799		27,825,717
Consignment fees		5,014,111		7,067,745
Others		44,725,549		45,129,548

		332,145,613		303,344,525

		903,560,376		822,594,097

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KB SECURITIES CO., LTD. and Subsidiaries

Notes to the Consolidated Financial Statements

December 31, 2023 and 2022

(b)	Stock Grant Agreement

The executives of the Group have stock grant agreement with KB Financial Group Inc, and the Group settles the expense arising from the agreement with KB Financial Group Inc. The Group recognizes the expense in profit or loss as selling and administrative expenses.

The details of the share grants linked to long-term performance as at December 31, 2023, are as follows:


(In number of shares)	Grant date	Granted shares		Payable shares1		Vesting conditions
Series 1-1	2010-1-1		1,231		266	Service, vesting conditions : market 40%, non-market 60%
Series 1-8	2011-1-1		1,289		365	Service, vesting conditions : market 40%, non-market 60%
Series 1-10	2012-1-1		1,976		644	Service, vesting conditions : market 40%, non-market 60%
Series 1-11	2012-6-18		708		142	Service, vesting conditions : market 40%, non-market 60%
Series 1-13	2013-1-1		3,340		1,074	Service, vesting conditions : market 40%, non-market 60%
Series 1-19	2015-2-24		1,812		584	Service, vesting conditions : market 30%, non-market 70%
Series 1-21	2016-1-1		6,671		1,309	Service, vesting conditions : market 30%, non-market 70%
Series 1-22	2016-12-30		36,732		10,250	Service, vesting conditions : market 20%, non-market 80%
Series 1-24	2017-2-24		1,698		1,516	Service, vesting conditions : market 20%, non-market 80%
Series 1-25	2017-6-1		1,511		—	Service, vesting conditions : market 20%, non-market 80%
Series 1-26	2017-9-4		1,551		1,028	Service, vesting conditions : market 20%, non-market 80%
Series 1-28	2018-1-1		12,252		2,961	Service, vesting conditions : market 20%, non-market 80%
Series 1-29	2018-7-9		1,208		—	Service, vesting conditions : market 20%, non-market 80%
Series 1-30	2019-1-1		80,289		45,119	Service, vesting conditions : market 80%, non-market 20%
Series 1-30	2019-1-1		4,580		3,482	Service, vesting conditions : market 0%, non-market 100%
Series 1-31	2019-2-24		809		637	Service, vesting conditions : market 20%, non-market 80%
Series 1-32	2019-3-4		1,888		1,021	Service, vesting conditions : market 20%, non-market 80%
Series 1-33	2019-6-1		3,994		1,621	Service, vesting conditions : market 20%, non-market 80%
Series 1-34	2019-9-1		2,927		706	Service, vesting conditions : market 20%, non-market 80%
Series 1-35	2019-9-4		358		207	Service, vesting conditions : market 20%, non-market 80%
Series 1-36	2019-5-27		1,167		383	Service, vesting conditions : market 20%, non-market 80%
Series 1-37	2020-1-1		48,962		17,855	Service, vesting conditions : market 20%, non-market 80%
Series 1-38	2020-3-6		2,856		1,233	Service, vesting conditions : market 0%, non-market 100%
Series 1-39	2020-8-1		12,744		4,173	Service, vesting conditions : market 20%, non-market 80%
Series 1-40	2021-1-1		98,808		42,155	Service, vesting conditions : market 80%, non-market 20%
Series 1-40	2021-1-1		5,675		2,237	Service, vesting conditions : market 0%, non-market 100%

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KB SECURITIES CO., LTD. and Subsidiaries

Notes to the Consolidated Financial Statements

December 31, 2023 and 2022


Series 1-41	2021-3-4	3,591	5,383	Service, vesting conditions : market 20%, non-market 80%
Series 1-42	2021-3-15	5,034	5,552	Service, vesting conditions : market 20%, non-market 80%
Series 1-43	2021-5-27	604	199	Service, vesting conditions : market 20%, non-market 80%
Series 1-44	2021-6-1	2,904	4,601	Service, vesting conditions : market 20%, non-market 80%
Series 1-45	2021-8-1	2,320	2,980	Service, vesting conditions : market 20%, non-market 80%
Series 1-46	2021-9-1	3,201	5,338	Service, vesting conditions : market 20%, non-market 80%
Series 1-47	2022-1-1	61,447	70,901	Service, vesting conditions : market 20%, non-market 80%
Series 1-48	2022-2-17	1,990	2,695	Service, vesting conditions : market 20%, non-market 80%
Series 1-49	2022-3-6	928	256	Service, vesting conditions : market 0%, non-market 100%
Series 1-50	2022-03-14	1,060	1,060	Service, vesting conditions : market 20%, non-market 80%
Series 1-51	2022-05-09	2,839	2,338	Service, vesting conditions : market 20%, non-market 80%
Series 1-52	2022-07-18	602	602	Service, vesting conditions : market 20%, non-market 80%
Series 1-53	2022-08-01	4,945	4,484	Service, vesting conditions : market 20%, non-market 80%
Series 1-54	2022-08-16	3,375	4,381	Service, vesting conditions : market 20%, non-market 80%
Series 1-55	2023-01-01	76,499	46,927	Service, vesting conditions : market 20%, non-market 80%
Series 1-55	2023-01-01	5,022	2,507	Service, vesting conditions : market 0%, non-market 100%
Series 1-56	2023-02-15	3,161	1,383	Service, vesting conditions : market 20%, non-market 80%
Series 1-57	2023-03-04	3,361	1,393	Service, vesting conditions : market 20%, non-market 80%
Series 1-58	2023-03-15	1,367	1,367	Service, vesting conditions : market 20%, non-market 80%
Series 1-59	2023-06-01	3,626	1,061	Service, vesting conditions : market 20%, non-market 80%
Series 1-60	2023-08-01	2,768	579	Service, vesting conditions : market 20%, non-market 80%
Series 1-61	2023-09-01	3,390	565	Service, vesting conditions : market 20%, non-market 80%

		531,070	307,520

1	The number of maximum payable shares per executive as at December 31, 2023.

Table of Contents

KB SECURITIES CO., LTD. and Subsidiaries

Notes to the Consolidated Financial Statements

December 31, 2023 and 2022

The details of share grants linked to short-term performance as at December 31, 2023, are as follows:


(In number of shares)	Grant date	Granted shares		Payable shares1		Vesting conditions2
Series 2-3	2016-1-1		6,844		1,823	Proportional to service period, vesting conditions satisfied
Series 2-4	2017-1-1		25,285		12,171	Proportional to service period, vesting conditions satisfied
Series 2-5	2018-1-1		36,155		22,049	Proportional to service period, vesting conditions satisfied
Series 2-6	2019-1-1		60,039		19,601	Proportional to service period, vesting conditions satisfied
Series 2-7	2020-1-1		68,689		37,482	Proportional to service period, vesting conditions satisfied
Series 2-8	2021-1-1		69,448		54,053	Proportional to service period, vesting conditions satisfied
Series 2-9	2022-1-1		55,521		55,521	Proportional to service period, vesting conditions satisfied
Series 2-10	2023-1-1		94,583		94,583	Proportional to service period, vesting conditions satisfied
Series 3-3	2016-1-1		15,036		7,458	Proportional to service period, vesting conditions satisfied
Series 3-4	2017-1-1		12,112		7,055	Proportional to service period, vesting conditions satisfied
Series 3-5	2018-1-1		10,352		8,896	Proportional to service period, vesting conditions satisfied
Series 3-6	2019-1-1		44,696		16,885	Proportional to service period, vesting conditions satisfied
Series 3-7	2020-1-1		77,112		39,144	Proportional to service period, vesting conditions satisfied
Series 3-8	2021-1-1		91,948		73,194	Proportional to service period, vesting conditions satisfied
Series 3-9	2022-1-1		66,060		66,060	Proportional to service period, vesting conditions satisfied
Series 4-1	2017-12-31		23,667		21,865	Proportional to service period, vesting conditions satisfied
Series 4-2	2019-12-31		255,976		10,243	Proportional to service period, vesting conditions satisfied
Series 4-3	2020-12-31		267,279		98,725	Proportional to service period, vesting conditions satisfied
Series 4-4	2021-12-31		270,257		200,417	Proportional to service period, vesting conditions satisfied
Series 4-5	2022-12-31		217,733		217,733	Proportional to service period, vesting conditions satisfied

			1,768,792		1,064,958

1	The number of maximum payable shares per executive as at December 31, 2023.

2	Number of vested shares is determined by performance and paid for a deferred payment schedule over 3 to 5 years.

Share grants are measured at fair value using the Monte Carlo Simulation Model and assumptions used in determining the fair value as at December 31, 2023, are as follows:


(In Korean won)	Risk free rate (%)	Fair value (Market performance condition)	Fair value (Non-market performance condition)
Series 1-1	3.434	—	49,315~52,755
Series 1-8	3.434	—	49,315~52,755
Series 1-10	3.434	—	49,315~52,755
Series 1-11	3.434	—	47,631~47,631
Series 1-13	3.434	—	47,631~52,755
Series 1-19	3.434	—	45,096~47,631
Series 1-21	3.434	—	45,096~52,755
Series 1-22	3.434	—	45,096~56,379
Series 1-24	3.434	—	45,096~56,379

Table of Contents

KB SECURITIES CO., LTD. and Subsidiaries

Notes to the Consolidated Financial Statements

December 31, 2023 and 2022


(In Korean won)	Risk free rate (%)	Fair value (Market performance condition)	Fair value (Non-market performance condition)
Series 1-26	3.434	—	45,096~56,379
Series 1-28	3.434	—	45,096~56,379
Series 1-30	3.434	—	44,873~56,379
Series 1-31	3.434	—	45,096~56,379
Series 1-32	3.434	—	42,787~47,066
Series 1-33	3.434	—	51,649~52,755
Series 1-34	3.434	—	51,649~52,755
Series 1-35	3.434	—	45,096~56,379
Series 1-36	3.434	—	51,649~52,755
Series 1-37	3.434	—	47,066~52,755
Series 1-38	3.434	—	49,315~52,755
Series 1-39	3.434	—	49,315~52,755
Series 1-40	3.434	—	44,873~52,755
Series 1-41	3.434	41,598~51,288	42,787~47,066
Series 1-42	3.434	44,468~49,843	47,066~51,649
Series 1-43	3.434	—	51,649~52,755
Series 1-44	3.434	40,109~49,453	42,787~47,066
Series 1-45	3.434	47,038~52,723	47,066~51,649
Series 1-46	3.434	47,066~52,755	47,066~51,649
Series 1-47	3.434	42,096~48,102	47,066~51,649
Series 1-48	3.434	38,995~44,883	44,873~49,315
Series 1-49	3.434	—	49,315~52,755
Series 1-50	3.434	44,402~49,769	47,066~51,649
Series 1-51	3.434	42,445~48,855	44,873~49,315
Series 1-52	3.434	46,882~52,549	47,066~51,649
Series 1-53	3.434	42,737~49,191	44,873~52,755
Series 1-54	3.434	42,203~48,576	44,873~49,315
Series 1-55	3.434	44,873~52,755	44,873~51,649
Series 1-56	3.434	42,787~49,315	42,787~47,066
Series 1-57	3.434	42,787~49,315	42,787~47,066
Series 1-58	3.434	47,066~52,755	47,066~51,649
Series 1-59	3.434	42,787~49,315	42,787~47,066
Series 1-60	3.434	41,987~48,393	42,787~47,066
Series 1-61	3.434	39,955~46,050	42,787~47,066
Series 2-3	3.434	—	47,631~52,755
Series 2-4	3.434	—	44,873~52,755
Series 2-5	3.434	—	44,873~56,379
Series 2-6	3.434	—	42,787~56,379
Series 2-7	3.434	—	42,787~56,379
Series 2-8	3.434	—	42,787~53,595
Series 2-9	3.434	—	42,787~52,755
Series 2-10	3.434	—	42,787~51,649
Series 3-3	3.434	—	47,631~52,755
Series 3-4	3.434	—	45,096~52,755
Series 3-5	3.434	—	44,873~56,379
Series 3-6	3.434	—	44,873~56,379
Series 3-7	3.434	—	44,873~56,379
Series 3-8	3.434	—	44,873~52,755
Series 3-9	3.434	—	44,873~52,755
Series 4-1	3.434	—	45,096~56,379
Series 4-2	3.434	—	50,973~50,973
Series 4-3	3.434	—	49,315~52,755
Series 4-4	3.434	—	50,973~52,755
Series 4-5	3.434	—	49,315~52,755

Table of Contents

KB SECURITIES CO., LTD. and Subsidiaries

Notes to the Consolidated Financial Statements

December 31, 2023 and 2022

The Group used the volatility of the stock price over the previous year as the expected volatility and used the dividend yield as the arithmetic mean of the dividend rate of one year before, two years before, and three years before the base year, in order to calculate fair value. Fair value is calculated based on risk free interest rate of 1 year-KTB rate.

In relation to the above share-based arrangements, the compensation cost amounting to 66,785,811 thousand and 63,905,175 thousand is recorded as accrued expenses to KB Financial Group Inc. as at December 31, 2023 and 2022, respectively.

34. Non-operating Income and Non-operating Expenses

The details of non-operating income for the years ended December 31, 2023 and 2022, are as follows:


(in thousands of Korean won)	2023		2022
Gain on disposal of property and equipment		8,321		1,499,486
Gain on disposal of investment properties		—		601,745
Gain on disposal of intangible assets		1,436,275		—
Reversal of impairment loss on intangible assets		1,726,399		394,684
Reversal of revaluation loss for property and equipment		—		72,800
Rent		6,781,887		6,280,529
Gain related to investments in associates		27,759,056		16,002,191
Gain on disposal of assets held for sale		—		8,967,270
Others		29,592,459		66,898,514

		67,304,397		100,717,219

The details of non-operating expenses for the years ended December 31, 2023 and 2022, are as follows:


(in thousands of Korean won)	2023		2022
Loss on disposal of property and equipment		29,760		292,841
Loss on disposal of investment properties		—		29,912
Depreciation of investment properties		433,894		468,531
Loss on disposal of intangible assets		2,500		22,000
Impairment loss on investment properties 1		109,155,681		—
Impairment loss on intangible assets		74,692		1,028,751
Revaluation loss for property and equipment		—		451,905
Donation		3,852,653		8,064,498
Loss related to investments in subsidiaries and associates		70,652,736		12,962,791
Others		70,495,148		60,064,385

		254,697,064		83,385,614

During the year ended December 31, 2023, there were signs of impairment for investment properties held by VREF Shaftesbury ScSp and BECKETT ACQUISITION LIMITED, which were subsidiaries of the Group, and the estimated recoverable amount was lower than the book value, so 46,301 million and 62,855 million of impairment losses, respectively, were recognized.

As at December 31, 2023, VREF Shaftesbury ScSp and BECKETT ACQUISITION LIMITED were excluded from consolidation.

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KB SECURITIES CO., LTD. and Subsidiaries

Notes to the Consolidated Financial Statements

December 31, 2023 and 2022

35. Tax Expense and Deferred Tax

The details of income tax expense for the years ended December 31, 2023 and 2022, are as follows:


(in thousands of Korean won)	2023			2022
Current tax
Current tax on profits for the year		151,268,757			60,368,151
Adjustments in respect of prior years		1,908,328			(1,091,538	)
Deferred tax
Origination and reversal of temporary differences		(46,437,792	)		41,473,246
Tax recognized directly in equity
Gain or loss on valuation for financial assets at FVOCI		(19,580,805	)		(2,162,640	)
Shares of other comprehensive income of associates		1,421,275			244,705
Gain on revaluation of property and equipment		84,436			(12,328,212	)
Remeasurements of net defined benefit liabilities		1,798,561			(1,040,964	)
Foreign operations translation		(589,364	)		(8,817,090	)
Hedge of net investments in foreign operations		(824,146	)		1,823,373
Changes on the fair value of financial liabilities designated at FVTPL due to the change of credit risk		19,037,679			(13,967,207	)
Tax effect derived from group’s income tax system		(3,353,308	)		2,997,367

Income tax expense		104,733,621			67,499,191

Reconciliations of profit before tax and tax expense for the years ended December 31, 2023 and 2022, are as follows:


(in thousands of Korean won)	2023			2022
Profit before tax (A)		492,761,458			262,326,853

Tax based on statutory rate		119,727,025			63,021,098
Adjustments
Non-deductible expense		4,853,834			4,321,064
Non-taxable income		(8,847,983	)		(3,968,641	)
Changes in deferred tax assets (liabilities) that have not been recognized		(7,517,397	)		(8,763,046	)
Effect from tax reduction and credit		(1,362,312	)		(201,610	)
Adjustment in respect of prior years		1,908,329			(1,091,537	)
Tax effect from group’s income tax system		(3,353,308	)		2,997,367
Changes in tax rate		350,253			2,045,539
Others		(1,024,820	)		9,138,957

Tax expense (B)		104,733,621			67,499,191

Effective tax rate (B/A)		21.25	%		25.73	%

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KB SECURITIES CO., LTD. and Subsidiaries

Notes to the Consolidated Financial Statements

December 31, 2023 and 2022

The changes in deferred tax assets (liabilities) for the years ended December 31, 2023 and 2022, are as follows:


	2023
(in thousands of Korean won)	Beginning balance			Profit (loss) for the year			Other comprehensive income			Ending balance
Provision for impairment		136,919			(517	)		—			136,402
Commissions income		7,803,594			1,333,066			—			9,136,660
Financial assets at FVOCI		(85,934,450	)		403,339			(19,687,942	)		(105,219,053	)
Defined benefit obligation		17,820,541			161,717			1,798,561			19,780,819
Other long-term employee benefits		1,901,703			(33,816	)		—			1,867,887
Financial assets at FVTPL		195,212,195			(159,303,751	)		—			35,908,444
Financial liabilities at FVTPL		(307,146,060	)		50,510,309			19,037,679			(237,598,072	)
Accrued expenses		54,462,905			14,753,559			—			69,216,464
Dividends (specific overseas company)		9,419,063			(140,884	)		—			9,278,179
Accrued income		(24,776,460	)		(9,752,775	)		—			(34,529,235	)
Property and equipment		(22,035,671	)		(4,181	)		84,436			(21,955,416	)
Provisions for asset retirement obligation		2,332,599			58,956			—			2,391,555
Investments in associates and subsidiaries		(163,368	)		(2,314,051	)		—			(2,477,419	)
Derivatives		45,168,323			109,004,625			—			154,172,948
Loans		1,604,716			(98,398	)		—			1,506,318
Intangible assets		(20,232,372	)		(620,051	)		—			(20,852,423	)
Plan assets		(3,293,977	)		(209,514	)		—			(3,503,491	)
Advance depreciation provision		(2,410,822	)		9,097			—			(2,401,725	)
Interest related to loan for construction		(58,852	)		3,945			—			(54,907	)
Others		52,127,630			43,311,683			—			95,439,313

Subtotal		(78,061,844	)		47,072,358			1,232,734			(29,756,752	)
Unrecognized deferred tax assets (liabilities) of the Parent Company		(4,216,737	)		(8,149,183	)		—			(12,365,920	)

Deferred tax assets (liabilities) of the Parent Company, net 1		(73,845,107	)		55,221,541			1,232,734			(17,390,832	)
Deferred tax assets of subsidiaries		1,289,260			(266,040	)		—			1,023,220
Deferred tax liabilities of subsidiaries		(2,783,295	)		1,972,745			—			(810,550	)
Changes in deferred tax assets due to adjustment of consolidation		18,276,688			(12,104,129	)		114,901			6,287,460

Deferred tax assets of the Group		1,289,260			(266,040	)		—			1,023,220

Deferred tax liabilities of the Group		(58,351,714	)		45,090,157			1,347,635			(11,913,922	)

1	The income tax rates used in computing deferred tax assets (liabilities) are the expected average tax rate, applicable to the forecasted period when the temporary differences are reversed.


	2022
(in thousands of Korean won)	Beginning balance			Profit (loss) for the year			Other comprehensive income			Ending balance
Provision for impairment		142,086			(5,167	)		—			136,919
Commissions income		4,622,730			3,180,864			—			7,803,594
Financial assets at FVOCI		(79,210,178	)		(4,561,632	)		(2,162,640	)		(85,934,450	)
Defined benefit obligation		19,501,520			(640,015	)		(1,040,964	)		17,820,541
Other long-term employee benefits		2,098,484			(196,781	)		—			1,901,703
Financial assets at FVTPL		55,244,765			139,967,430			—			195,212,195
Financial liabilities at FVTPL		(49,107,485	)		(244,071,368	)		(13,967,207	)		(307,146,060	)
Accrued expenses		75,757,563			(21,294,658	)		—			54,462,905
Dividends (specific overseas company)		10,545,651			(1,126,588	)		—			9,419,063
Accrued income		(22,988,746	)		(1,787,714	)		—			(24,776,460	)
Property and equipment		(9,782,627	)		75,168			(12,328,212	)		(22,035,671	)
Provisions for asset retirement obligation		2,199,329			133,270			—			2,332,599

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KB SECURITIES CO., LTD. and Subsidiaries

Notes to the Consolidated Financial Statements

December 31, 2023 and 2022


Investments in associates and subsidiaries	1,747,824		(1,911,192	)	—		(163,368	)
Derivatives	(57,458,767	)	102,627,090		—		45,168,323
Loans	1,584,488		20,228		—		1,604,716
Intangible assets	(20,530,350	)	297,978		—		(20,232,372	)
Plan assets	(4,206,052	)	912,075		—		(3,293,977	)
Advance depreciation provision	(2,501,796	)	90,974		—		(2,410,822	)
Interest related to loan for construction	(64,951	)	6,099		—		(58,852	)
Others	40,214,857		11,912,773		—		52,127,630

Subtotal	(32,191,655	)	(16,371,166	)	(29,499,023	)	(78,061,844	)
Unrecognized deferred tax assets (liabilities) of the Parent Company	(3,604,707	)	(612,030	)	—		(4,216,737	)

Deferred tax assets (liabilities) of the Parent Company, net 1	(28,586,948	)	(15,759,136	)	(29,499,023	)	(73,845,107	)
Deferred tax assets of subsidiaries	—		1,289,260		—		1,289,260
Deferred tax liabilities of subsidiaries	(2,825,915	)	42,620		—		(2,783,295	)
Changes in deferred tax assets due to adjustment of consolidation	14,534,394		10,491,306		(6,749,012	)	18,276,688

Deferred tax assets of the Group	—		1,289,260		—		1,289,260

Deferred tax liabilities of the Group	(16,878,469	)	(5,225,210	)	(36,248,035	)	(58,351,714	)

1	The income tax rates used in computing deferred tax assets (liabilities) are the expected average tax rate, applicable to the forecasted period when the temporary differences are reversed.

Temporary differences which were not recognized due to uncertainty of their realization as at December 31, 2023 and 2022, are as follows:


(in thousands of Korean won)	2023		2022
Taxable temporary difference
Investments in subsidiaries		134,894,928		117,273,403
Intangible assets		58,888,990		58,888,990
Others		445,550		445,550

		194,229,468		176,607,943

Deductible temporary difference
Commission		9,239,637		7,512,805
Dividends		20,365,324		35,543,632
Investments in subsidiaries		22,786,722		20,188,708
Others		2,705,305		2,705,305

		55,096,988		65,950,450

		139,132,480		110,657,493

Details of income taxes that are charged or credited directly to equity for the years ended December 31, 2023 and 2022, are as follows:


(in thousands of Korean won)	2023			2022
Recognized in other comprehensive income
Gain or loss on valuation for financial assets at FVOCI		(15,919,147	)		(39,698	)
Shares of other comprehensive income of associates		1,421,275			244,705
Gains on revaluation of property and equipment		84,436			(12,328,212	)
Remeasurements of net defined benefit liabilities		1,798,561			(1,040,964	)
Foreign operations translation		(589,364	)		(8,817,090	)
Hedge of net investments in foreign operations		(824,146	)		1,823,373
Changes on the fair value of financial liabilities designated at FVTPL due to the change of credit risk		19,037,679			(13,967,207	)
Reclassified to profit or loss
Gain or loss on valuation for financial assets at FVOCI		(3,661,658	)		(2,122,942	)

		1,347,636			(36,248,035	)

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December 31, 2023 and 2022

36. Carrying Amounts of Financial Instruments by Category

Financial assets and liabilities are measured at fair value or amortised cost. Measurement policies for each category of financial assets and financial liabilities are disclosed in Note 2, ‘Material accounting policies’.

The carrying amounts of financial assets and liabilities by category as at December 31, 2023 and 2022, are as follows:


	2023
(in thousands of Korean won)	Financial asset measured at fair value through profit or loss		Financial asset measured at amortised cost		Financial asset measured at fair value through other comprehensive income		Totals
Financial Assets
Cash and deposits		—		2,927,067,230		—		2,927,067,230
Financial assets at FVTPL		35,948,948,684		—		—		35,948,948,684
Derivative financial assets		1,138,492,891		—		—		1,138,492,891
Equity instruments at FVOCI		—		—		864,193,831		864,193,831
Debt instruments at FVOCI		—		—		4,270,319,038		4,270,319,038
Loans measured at amortised cost		—		10,418,945,936		—		10,418,945,936
Other financial assets		—		4,072,941,183		—		4,072,941,183

		37,087,441,575		17,418,954,349		5,134,512,869		59,640,908,793


	2023
(in thousands of Korean won)	Financial liabilities measured at fair value through profit or loss		Financial liabilities designated at fair value through profit or loss		Financial liabilities measured at amortised cost		Derivative liabilities (hedging)		Totals
Financial Liabilities
Financial liabilities at FVTPL		2,860,033,642		—		—		—		2,860,033,642
Financial liabilities designated at FVTPL		—		7,975,847,458		—		—		7,975,847,458
Derivative financial liabilities		1,810,865,351		—		—		5,307,120		1,816,172,471
Deposit liabilities		—		—		7,122,595,110		—		7,122,595,110
Borrowings		—		—		30,640,156,335		—		30,640,156,335
Other financial liabilities		—		—		3,894,408,700		—		3,894,408,700

		4,670,898,993		7,975,847,458		41,657,160,145		5,307,120		54,309,213,716

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December 31, 2023 and 2022


	2022
(in thousands of Korean won)	Financial asset measured at fair value through profit or loss		Financial asset measured at amortised cost		Financial asset measured at fair value through other comprehensive income		Totals
Financial Assets
Cash and deposits		—		4,537,576,194		—		4,537,576,194
Financial assets at FVTPL		29,549,677,944		—		—		29,549,677,944
Derivative financial assets		1,724,310,258		—		—		1,724,310,258
Equity instruments at FVOCI		—		—		687,825,614		687,825,614
Debt instruments at FVOCI		—		—		4,112,728,624		4,112,728,624
Loans measured at amortised cost		—		8,907,503,612		—		8,907,503,612
Other financial assets		—		2,687,932,514		—		2,687,932,514

		31,273,988,202		16,133,012,320		4,800,554,238		52,207,554,760


	2022
(in thousands of Korean won)	Financial liabilities measured at fair value through profit or loss		Financial liabilities designated at fair value through profit or loss		Financial liabilities measured at amortised cost		Derivative liabilities (hedging)		Totals
Financial Liabilities
Financial liabilities at FVTPL		2,082,979,265		—		—		—		2,082,979,265
Financial liabilities designated at FVTPL		—		10,088,600,213		—		—		10,088,600,213
Derivative financial liabilities		2,310,859,900		—		—		11,616,190		2,322,476,090
Deposit liabilities		—		—		6,799,233,076		—		6,799,233,076
Borrowings		—		—		23,523,195,868		—		23,523,195,868
Other financial liabilities		—		—		2,389,541,471		—		2,389,541,471

		4,393,839,165		10,088,600,213		32,711,970,415		11,616,190		47,206,025,983

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Notes to the Consolidated Financial Statements

December 31, 2023 and 2022

37. Financial Instruments

37.1 Fair Value of Financial Instruments by Class

Fair values of financial assets and financial liabilities as at December 31, 2023 and 2022, are as follows:


	2023				2022
(in thousands of Korean won)	Carrying amount		Fair value		Carrying amount		Fair value
Financial assets
Cash and deposits 2		2,927,067,230		2,927,067,230		4,537,576,194		4,537,576,194
Financial assets at FVTPL 1		35,948,948,684		35,948,948,684		29,549,677,944		29,549,677,944
Derivative financial assets 1		1,138,492,891		1,138,492,891		1,724,310,258		1,724,310,258
Financial assets at FVOCI		5,134,512,869		5,134,512,869		4,800,554,238		4,800,554,238
Loans measured at amortised cost		10,418,945,936		10,413,875,783		8,907,503,612		8,885,090,216
Other financial assets2		4,072,941,183		4,072,941,183		2,687,932,514		2,687,932,514

		59,640,908,793		59,635,838,640		52,207,554,760		52,185,141,364

1	Deferred transaction gain or losses are adjusted in the carrying amount.

2	The fair value of cash and deposits, other financial assets, deposit liabilities and other financial liabilities with short maturity dates or uncertain maturity dates is presented at their book amounts.


	2023				2022
(in thousands of Korean won)	Carrying amount		Fair value		Carrying amount		Fair value
Financial liabilities
Deposit liabilities 2		7,122,595,110		7,122,595,110		6,799,233,076		6,799,233,076
Financial liabilities at FVTPL		2,860,033,642		2,860,033,642		2,082,979,265		2,082,979,265
Financial liabilities designated at FVTPL1		7,975,847,458		7,975,847,458		10,088,600,213		10,088,600,213
Derivative financial liabilities1		1,816,172,471		1,816,172,471		2,322,476,090		2,322,476,090
Borrowings		30,640,156,335		30,630,441,081		23,523,195,868		23,460,054,713
Other financial liabilities2		3,894,408,700		3,894,408,700		2,389,541,471		2,389,541,471

		54,309,213,716		54,299,498,462		47,206,025,983		47,142,884,828

1	Deferred transaction gain or losses are adjusted in the carrying amount.

2	The fair value of cash and deposits, other financial assets, deposit liabilities and other financial liabilities with short maturity dates or uncertain maturity dates is presented at their book amounts.

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

37.2 Fair Value Hierarchy

Financial instruments measured at fair value are categorized within the fair value hierarchy, and the defined levels are as follows:


Level 1		Quoted prices (unadjusted) in active markets for identical assets or liabilities

Level 2		Fair value using inputs other than quoted prices included within Level 1 that are observable for the asset or liability, either directly (that is, prices) or indirectly (that is, derived from prices)

Level 3		Fair value using inputs for the asset or liability that are not based on observable market data (that is, unobservable inputs)

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Notes to the Consolidated Financial Statements

December 31, 2023 and 2022

The inputs used to measure the fair value of an asset or a liability might be categorized within different levels of the fair value hierarchy. In those cases, the fair value measurement is categorized in its entirety in the same level of the fair value hierarchy as the lowest level input that is significant to the entire measurement. The observable input is generally used to the fair value measurement. However, if an observable input requires an adjustment using an unobservable input and that adjustment results in a significantly higher or lower fair value measurement, the resulting measurement would be categorized within Level 3 of the fair value hierarchy.

(a)	Fair value hierarchy of financial instruments measured at fair value

The fair value hierarchy of financial assets and liabilities measured at fair value as at December 31, 2023 and 2022, are as follows:


	2023
(in thousands of Korean won)	Level 1		Level 2		Level 3		Total
Financial assets
Financial assets at FVTPL – debt instruments 1		6,754,020,776		24,674,105,236		3,046,586,050		34,474,712,062
Financial assets at FVTPL - equity instruments		767,920,689		428,787,120		277,528,813		1,474,236,622
Derivative financial assets1		26,360,675		1,020,502,956		91,629,260		1,138,492,891
Financial assets at FVOCI		7,656,523		4,690,968,746		435,887,600		5,134,512,869

		7,555,958,663		30,814,364,058		3,851,631,723		42,221,954,444

Financial liabilities
Financial liabilities at FVTPL		2,860,033,642		—		—		2,860,033,642
Financial liabilities designated at FVTPL1		56,685,594		881,791,359		7,037,370,505		7,975,847,458
Derivative financial liabilities1		95,264,720		965,353,254		755,554,497		1,816,172,471

		3,011,983,956		1,847,144,613		7,792,925,002		12,652,053,571

1	Deferred transaction gain or losses are adjusted in the carrying amount.


	2022
(in thousands of Korean won)	Level 1		Level 2		Level 3		Total
Financial assets
Financial assets at FVTPL – debt instruments 1		6,264,846,729		19,561,321,806		2,437,013,557		28,263,182,092
Financial assets at FVTPL - equity instruments		499,336,398		568,075,509		219,083,945		1,286,495,852
Derivative financial assets1		98,643,416		1,504,891,727		120,775,115		1,724,310,258
Financial assets at FVOCI		5,025,406		4,372,289,778		423,239,054		4,800,554,238

		6,867,851,949		26,006,578,820		3,200,111,671		36,074,542,440

Financial liabilities
Financial liabilities at FVTPL		2,082,979,265		—		—		2,082,979,265
Financial liabilities designated at FVTPL1		35,687,313		1,811,403,735		8,241,509,165		10,088,600,213
Derivative financial liabilities1		423,867,393		1,121,066,848		777,541,849		2,322,476,090

		2,542,533,971		2,932,470,583		9,019,051,014		14,494,055,568

1	Deferred transaction gain or losses are adjusted in the carrying amount.

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Notes to the Consolidated Financial Statements

December 31, 2023 and 2022

37.3 Valuation techniques and inputs classified by Level 2

The details of the valuation techniques and inputs classified by Level 2 as at December 31, 2023 and 2022 are as follows:


(in thousands of Korean won)	2023	Valuation techniques	Inputs
Financial assets at FVTPL	25,102,892,356	DCF Model, Closed form formula, Monte Carlo model, Black Scholes model, Hull and White Model, Net asset value and others	Price of underlying asset, interest rate, dividend rate, volatility, discount rate and others
Derivative financial assets(trading)	1,020,502,956	DCF Model, Closed form formula, Monte Carlo model, Black Scholes model, Hull and White Model, Net asset value and others	Interest rate, price of underlying asset, exchange rate, credit spread, discount rate, volatility and others
Financial assets at FVOCI	4,690,968,746	DCF Model	Discount rate, Interest rate and others

	30,814,364,058

Financial liabilities designated at FVTPL	881,791,359	DCF Model, Closed form formula, Monte Carlo model, Black Scholes model, Hull and White Model, Net asset value and others	Price of underlying asset, interest rate, dividend rate, volatility, discount rate
Derivative financial liabilities(trading)	960,046,134	DCF Model, Closed form formula, Monte Carlo model, Black Scholes model, Hull and White Model, Net asset value and others	Interest rate, price of underlying asset, exchange rate, credit spread, discount rate, volatility
Derivative financial liabilities(hedging)	5,307,120	DCF Model	Discount rate, exchange rate and others

	1,847,144,613


(in thousands of Korean won)	2022	Valuation techniques	Inputs
Financial assets at FVTPL	20,129,397,315	DCF Model, Closed form formula, Monte Carlo model, Black Scholes model, Hull and White Model, Net asset value and others	Price of underlying asset, interest rate, dividend rate, volatility, discount rate and others
Derivative financial assets(trading)	1,504,891,727	DCF Model, Closed form formula, Monte Carlo model, Black Scholes model, Hull and White Model, Net asset value and others	Interest rate, price of underlying asset, exchange rate, credit spread, discount rate, volatility and others
Financial assets at FVOCI	4,372,289,778	DCF Model	Discount rate, Interest rate and others

	26,006,578,820

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December 31, 2023 and 2022


Financial liabilities designated at FVTPL	1,811,403,735	DCF Model, Closed form formula, Monte Carlo model, Black Scholes model, Hull and White Model, Net asset value and others	Price of underlying asset, interest rate, dividend rate, volatility, discount rate
Derivative financial liabilities(trading)	1,109,450,658	DCF Model, Closed form formula, Monte Carlo model, Black Scholes model, Hull and White Model, Net asset value and others	Interest rate, price of underlying asset, exchange rate, credit spread, discount rate, volatility
Derivative financial liabilities(hedging)	11,616,190	DCF Model	Discount rate, exchange rate and others

	2,932,470,583

37.4 Level 3 of the Fair Value Hierarchy Disclosure

(a)	Valuation Process for Fair Value Measurements Categorized Within Level 3 of the Fair Value Hierarchy

The fair value of financial instruments classified as Level 3 is determined by external valuation or self-valuation of the Group. Unobservable inputs are produced by the external appraiser or internal valuation system and the Group reviews the adequacy of the inputs. The Risk Management Council reviews the adequacy of the assessment methodology and valuation method of external appraiser and the internal valuation. The agenda of the Risk Management Council is being reported or approved by the Risk Committee.

(b)	Changes in Fair Value Measurements Categories of the Fair Value hierarchy

The changes in financial instruments with Level 3 fair value for the years ended December 31, 2023 and 2022, are as follows:


	2023
(in thousands of Korean won)	Financial assets at FVTPL			Financial assets at FVOCI			Net derivatives			Financial liabilities designated at FVTPL
Beginning balance		2,656,097,502			423,239,054			(656,766,734	)		(8,241,509,165	)
Total gains or losses
Profit or loss		92,977,448			—			(75,110,379	)		(337,404,523	)
Other comprehensive income		—			12,640,160			—			(32,370,491	)
Purchases		1,328,794,036			(1	)		11,645,512			—
Sales		(762,414,786	)		8,387			(6,653,771	)		—
Issues		—			—			(6,275,195	)		(4,431,945,040	)
Settlements		—			—			69,235,330			6,005,858,714
Transfer within levels 1		8,660,663			—			—			—

Ending balance		3,324,114,863			435,887,600			(663,925,237	)		(7,037,370,505	)

1	Transfer within levels occurred due to the change in the availability of observable market data on the financial instruments.

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December 31, 2023 and 2022


	2022
(in thousands of Korean won)	Financial assets at FVTPL			Financial assets at FVOCI		Net derivatives			Financial liabilities designated at FVTPL
Beginning balance		1,899,337,278			368,355,671		41,344,748			(7,829,040,979	)
Total gains or losses
Profit or loss		(70,107,637	)		—		(666,119,493	)		563,317,417
Other comprehensive income		—			54,800,585		—			60,520,089
Purchases		1,182,931,242			82,798		23,525,783			—
Sales		(361,277,691	)		—		(59,177,496	)		—
Issues		—			—		(14,796,230	)		(5,222,820,340	)
Settlements		—			—		18,455,954			4,186,514,648
Transfer within levels 1		5,214,310			—		—			—

Ending balance		2,656,097,502			423,239,054		(656,766,734	)		(8,241,509,165	)

1	Transfer within levels occurred due to the change in the availability of observable market data on the financial instruments.

In relation to changes in Level 3 fair value, total gains or losses related to the asset and liabilities held at the reporting date are included in the statements of comprehensive income for the years ended December 31, 2023 and 2022, are as follows:


	2023
(in thousands of Korean won)	Financial assets at FVTPL		Financial assets at FVOCI		Net derivatives			Financial liabilities designated at FVTPL
Profit or loss
Gain or loss on valuation of financial instruments1		53,120,630		—		(38,278,972	)		70,813,358
Other comprehensive income
Gain or loss on valuation of financial assets at FVOCI2		—		12,640,160		—			—
Changes in fair value of financial liabilities at FVTPL due to the change of credit risk2		—		—		—			(51,567,843	)

		53,120,630		12,640,160		(38,278,972	)		19,245,515

1	Included in gain or loss on valuation and disposal of financial instruments on the statements of Profit or Loss.

2	Included in other comprehensive income on the statements of comprehensive income.


	2022
(in thousands of Korean won)	Financial assets at FVTPL			Financial assets at FVOCI		Net derivatives			Financial liabilities designated at FVTPL
Profit or loss
Gain or loss on valuation of financial instruments1		(84,556,890	)		—		(558,677,313	)		726,467,752
Other comprehensive income
Gain or loss on valuation of financial assets at FVOCI2		—			54,800,585		—			—
Changes in fair value of financial liabilities at FVTPL due to the change of credit risk2		—			—		—			56,580,809

		(84,556,890	)		54,800,585		(558,677,313	)		783,048,561

1	Included in gain or loss on valuation and disposal of financial instruments on the statements of Profit or Loss.

2	Included in other comprehensive income on the statements of comprehensive income.

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December 31, 2023 and 2022

(c)	Valuation techniques and the Inputs classified by Level 3

Valuation techniques and inputs for level 3 financial instruments are as follows:

2023

(in thousands of

Korean won)

Type

Fair value

Valuation
techniques

Inputs

Unobservable

input

Range

Relevance

Financial assets at FVTPL

Equity-linked securities

9,129,439

DCF model, Closed Form, Monte Carlo

Price of underlying asset, interest rate,

Underlying asset volatility

0.29 ~ 0.37

Proportional

Correlation

0.57 ~ 0.76

Proportional

Other OTC
derivative
linked contract

231,308,457

Model, Net asset
value, etc.

of underlying
assets,
correlation of
underlying

Underlying asset
volatility

0.19 ~ 0.36

Proportional

Correlation

-0.60 ~ 0.76

Proportional

Debt instruments

2,032,679,966

assets, volatility
of interest rate,

Underlying asset
volatility

0.24 ~ 0.36

Proportional

Equity
instruments1

219,083,945

probability of

Discount rate

0.08 ~ 0.23

Inversely

proportional

Derivative financial assets (trading)

120,775,115

default

Underlying asset
volatility

0.10 ~ 0.59

Proportional

Correlation

-0.60 ~ 0.93

Proportional

Financial assets at FVOCI

Equity
instruments

423,239,054

DCF model, Risk-
adjusted discount
rate model, IMV
model and others

Growth rate,
discount rate

Growth rate

0.01 ~ 0.01

Proportional

Discount rate

0.11 ~ 0.13

Inversely

proportional

3,200,111,671

Financial liabilities designated at

Equity-linked
securities sold

6,726,257,399

DCF model, Closed
Form, Monte Carlo
Simulation, Hull
and

Price of
underlying asset,
interest rate,
discount rate,

Underlying asset
volatility

0.19 ~ 0.59

Proportional

FVTPL

White, Black-
Scholes

dividend ratio,

Correlation

-0.60 ~ 0.80

Proportional

Derivatives
linked securities
sold

1,321,382,570

Model, Net asset
value, etc.

volatility of
underlying
assets,
correlation of
underlying
assets,

Underlying asset
volatility

0.01 ~ 1.19

Proportional

Correlation

-0.50 ~ 0.93

Proportional

Other OTC
derivatives
linked contract
sold1

193,869,196

volatility of
interest rate,
probability of
default

Underlying asset
volatility

0.19 ~ 0.32

Proportional

Correlation

-0.60 ~ 0.73

Proportional

Derivative financial liabilities (trading)

777,541,849

Underlying asset
volatility

0.09 ~ 1.19

Proportional

Correlation

-0.60 ~ 0.93

Proportional

9,019,051,014

1	Derivatives which derive their value from interest rate, stock price, foreign exchange rate, commodity price, credit rate and others are included.

(d)	Sensitivity Analysis of Recurring Fair Value Measurements Categorized Within Level 3 of the Fair Value Hierarchy

Sensitivity analysis of financial instruments is performed to measure favorable and unfavorable changes in the fair value of financial instruments which are affected by the unobservable inputs, using a statistical technique. When the fair value is affected by more than two inputs, the amounts represent the most favorable or most unfavorable.

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Notes to the Consolidated Financial Statements

December 31, 2023 and 2022

The results of the sensitivity analysis for the effect on profit or loss from changes in inputs for each financial instrument as at December 31, 2023 and 2022, are as follows.


	2023
	Profit and loss					Other comprehensive income
(in thousands of Korean won)	Favorable changes		Unfavorable changes			Favorable changes		Unfavorable changes
Financial assets
Financial assets at FVTPL1		18,133,573		(14,565,265	)		—		—
Derivative financial assets 1		7,711,516		(8,285,388	)		—		—
Financial assets at FVOCI 2		—		—			27,719,688		(20,456,568	)

		25,845,089		(22,850,653	)		27,719,688		(20,456,568	)

Financial liabilities
Financial liabilities designated at FVTPL1		43,113,202		(42,487,042	)		—		—
Derivative financial liabilities 1		17,928,206		(19,069,748	)		—		—

		61,041,408		(61,556,790	)		—		—

1	Measured by changes in fair value based on the increasing or decreasing unobservable volatility of underlying assets by 10% or unobservable input(growth rate and discount rate) by 1%.

2	Measured by changes in fair value based on growth rate ((-)1~1%) and discount rate ((-)1~1%) that are unobservable inputs.


	2022
	Profit and loss					Other comprehensive income
(in thousands of Korean won)	Favorable changes		Unfavorable changes			Favorable changes		Unfavorable changes
Financial assets
Financial assets at FVTPL1		19,476,498		(16,155,942	)		—		—
Derivative financial assets 1		17,639,228		(18,599,459	)		—		—
Financial assets at FVOCI 2		—		—			31,718,711		(21,878,733	)

		37,115,726		(34,755,401	)		31,718,711		(21,878,733	)

Financial liabilities
Financial liabilities designated at FVTPL1		94,000,806		(97,663,062	)		—		—
Derivative financial liabilities 1		48,696,201		(46,355,477	)		—		—

		142,697,007		(144,018,539	)		—		—

1	Measured by changes in fair value based on the increasing or decreasing unobservable volatility of underlying assets by 10% or unobservable input(growth rate and discount rate) by 1%.

2	Measured by changes in fair value based on growth rate ((-)1~1%) and discount rate ((-)1~1%) that are unobservable inputs.

(e)	Day 1 Profit and Loss

If the Group uses a valuation technique that uses data not obtained from observable markets for the fair value at initial recognition of financial instruments, there could be a difference between the transaction price and the amount determined using that valuation technique. In these circumstances, the fair value of financial instruments is recognized as the transaction price and the difference is amortised by using the straight-line method over the life of the financial instruments. If the fair value of the financial instruments can be subsequently determined using observable market inputs, the remaining deferred amount is immediately recognized in profit or loss.

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December 31, 2023 and 2022

The aggregate difference yet to be recognized in profit or loss at the beginning and end of the year, and the changes in the balance of this difference, are as follows:


(in thousands of Korean won)	2023			2022
Balances at the beginning of the year (A)		83,377,184			93,995,795
Incurred during the year (B)		85,920,231			111,326,521
Amounts recognized in profit or loss during the year (C)		(136,692,118	)		(121,945,132	)

Balances at the end of year (A+B+C)		32,605,297			83,377,184

37.5 Fair value hierarchy of financial instruments which the fair value is disclosed

(a)	The fair value hierarchy of financial assets and liabilities which the fair value is disclosed as at December 31, 2023 and 2022, are as follows:


	2023
(in thousands of Korean won)	Level 1		Level 2		Level 3		Total
Financial assets
Loans measured at amortised cost		—		—		10,413,875,783		10,413,875,783
Financial liabilities
Borrowings		—		—		30,630,441,081		30,630,441,081

1	Cash and deposits, other financial assets, deposit liabilities and other financial liabilities that use book amount as a substitute for fair value because their maturities are relatively short or are not set, are not disclosed.


	2022
(in thousands of Korean won)	Level 1		Level 2		Level 3		Total
Financial assets
Loans measured at amortised cost		—		—		8,885,090,216		8,885,090,216
Financial liabilities
Borrowings		—		—		23,460,054,713		23,460,054,713

1	Cash and deposits, other financial assets, deposit liabilities and other financial liabilities that use book amount as a substitute for fair value because their maturities are relatively short or are not set, are not disclosed.

(b)	Valuation techniques and inputs


		Valuation technique and inputs
Cash and deposits		The fair value of cash is the same as the book amount. The book amount is used as a substitute value of fair value for the majority of deposits consisting of overnight deposits and deposits with variable interest rate.
Loans measured at amortised cost		The fair values are calculated by discount rate considering market interest rates and borrower’s credit risk on expected cash flows.
Deposit liabilities and borrowings		The book amount is used as a substitute value of fair value for demand deposit liabilities, bank overdrafts and call money. With regard to the other deposits and borrowings, the fair values are calculated by discount rate considering residual risks at market interest rates on contractual cash flows.
Other financial assets and liabilities		As a temporary transitional account derived from various transactions, the book amount is used as a substitute value of fair value instead of applying DCF due to the relatively short-term or indefinite maturity.

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December 31, 2023 and 2022

37.6 Derecognition of financial assets

The Group continues to recognize bonds sold under repurchase agreements and securities lending agreement, because the Group transferred the financial asset, but the assets does not meet the derecognition criteria. Due to the nature of transaction that bonds sold under repurchase agreements are under repurchase condition with fixed price and securities lending agreement contains the retransfer back condition by the end of lending period, the Group is liable to almost all risks and rewards related to the ownership of the financial assets.

As at December 31, 2023 and 2022, relevant information about transferred financial assets which do not qualify for derecognition are as follows:


	2023
	Financial assets at FVTPL				Financial assets at FVOCI
(in thousands of Korean won)	Debt instruments1,2, 3		Equity instruments2		Debt instruments1,3		Equity instruments
Carrying amount of transferred assets		3,235,725,954		30,025,000		2,509,724,246		—
Carrying amount of related liabilities		3,097,597,098		—		2,481,220,084		—

1	Transferred debt instruments under repurchase agreements.

2	Transferred equity instruments and debt instruments under securities lending agreements.

3	As at December 31, 2023, the accrued interests related to debt securities of 37,381 million is excluded.


	2022
	Financial assets at FVTPL				Financial assets at FVOCI
(in thousands of Korean won)	Debt instruments1,2, 3		Equity instruments2		Debt instruments1,3		Equity instruments
Carrying amount of transferred assets		3,728,769,734		52,098,066		2,234,882,535		—
Carrying amount of related liabilities		3,559,217,505		—		2,121,560,622		—

1	Transferred debt instruments under repurchase agreements.

2	Transferred equity instruments and debt instruments under securities lending agreements.

3	As at December 31, 2022, the accrued interests related to debt securities of 22,779 million is excluded.

Meanwhile, the Group provided additional credit enhancements such as purchase agreements in addition to recourse limited to transferred assets to subsidiaries established for asset securitization purposes.

Details of carrying amounts of the underlying assets and the associated liabilities as of December 31, 2023 and 2022, are as follows:


(In thousands of Korean won)		2023		2022
Underlying assets	Financial assets at fair value through profit or loss		287,035,556		309,013,708
	Loans measured at amortized cost1		1,765,268,001		1,883,227,454

			2,052,303,557		2,192,241,162

Associated liabilities	Debentures		2,013,676,679		2,039,393,029

1	The amounts disclosed in above table are before deduction of allowances.

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Notes to the Consolidated Financial Statements

December 31, 2023 and 2022

38. Financial Risk Management

38.1 Summary

38.1.1 Overview of Financial Risk Management Policy

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

The note regarding financial risk management provides information about the risks that the Group is exposed to, including the objectives, policies and processes for assessing and managing the risks and net operating capital ratio management. Additional quantitative information is disclosed throughout the notes to the consolidated financial statements.

The Group’s risk management system focuses on increasing transparency, developing the risk management environment, preventing transmission of risk to other related subsidiaries, and the preemptive response to risk due to rapid changes in the financial environment to support the Group’s long-term strategy and business decisions efficiently. Credit risk, liquidity risk, market risk, operational risk, and credit concentration risk are recognized as the Group’s key risks. These risks are measured and managed by quantification as regulatory capital and VaR (Value at Risk) using a statistical method.

38.1.2 Risk Management Organization

(a) Board of Directors

Board of Directors are the ultimate decision-making authority that appoint and dismiss Risk Management Committee, establish and amend the Risk Management Committee policies, establish the Group’s criteria for risk limit, decide on basic policy of risk management, and approve large-scale investments.

(b) Risk Management Committee

The Risk Management Committee consists of more than three directors appointed by the Board of Directors (including more than a half of external director). The Risk Management Committee executes the operations delegated by Board Of Directors in accordance with Risk Management Committee policy

Risk Management Council consists of members appointed by Company’s executives, including the director who is responsible for risk management, compliance, planning/management. Also the organization is delegated by Risk Management Committee to perform deliberation/resolution for major policies and matters related to the risk.

(d) Risk management department

Risk management department carries out practical tasks, required for risk management of the Group, such as supporting the Risk Management Committee, reporting the Group’s risk level and computing net operating capital ratio.

38.1.3 Risk Management System

In order to establishing risk management structure, the Group built the total risk management system, ERMS (Enterprise Risk Management System), which is designed for reasonable price valuation against risks and the management of risk limitation to raise the soundness of assets and allocate resources efficiently. Moreover, the Group performs business with risk management basis in mainly by constructing RAPM (Risk Adjusted Performance Measure) and enlarging the portion of performance evaluation.

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December 31, 2023 and 2022

38.1.4 Risk Management Strategy and Policy

As an allocation of risk capital and risk limit establishment process, the risk capital is allocated through resolution of Risk Management Committee meetings, and the amount of risk capital is anticipated for each risk sector, business sector and department by reflecting annual management strategy and business plans.

38.2 Credit Risk

38.2.1 Overview of Credit Risk

The Group is exposed to certain level of credit risk and the credit risk is the risk of possible loss to portfolio due to counterparty’s credit event and breach of covenant. Credit risk exposure occurs in investment activities such as loans, debt instruments, derivative transactions, and non-trading accounts, or can exist in relating to off-balance accounts.

38.2.2 Credit Risk Management

Credit risk is the risk of financial loss to the Group if a customer or counterparty of a financial instrument fails to meet its contractual obligations. If the trading department of the Group wants to deal with the counterparty that may cause the credit risk, the trading department submits product management plan and application in advance to get approval by the Risk Management Council and the Risk Management Committee. The deal is executed when the approval by the Risk Management Council and the Risk Management Committee is completed. Credit risk limit depends on 1) standard credit risk limit, 2) concentration limit on the same person and 3) credit rating and additional limit may be added by the trading department. In addition, credit VaR is measured in addition to the credit management listed above and credit VaR due to the internal model is operated by the credit manager measurement system of the risk metrics group. Limit management is performed on a daily basis and stress test is performed on a regular basis and in case of excess of the limit, trading department expedite the process with the procedure set by the risk management department.

38.2.3 Maximum Exposure to Credit Risk

The maximum exposure of credit risk related to the off-balance as at December 31, 2023 and 2022, are as follows:


(in thousands of Korean won)	2023		2022
Agreement to purchase the commercial papers 1		1,287,400,000		894,200,000
Guarantees and loan commitment		1,343,191,856		1,511,552,415

		2,630,591,856		2,405,752,415

1	According to the above arrangement, the Group holds the asset-backed short-term bonds amounting to 441,661 million and 556,400 million as at December 31, 2023 and 2022, respectively.

The Group does not disclose financial assets (except above contracts) whose carrying amount represents the maximum exposure to credit risk.

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December 31, 2023 and 2022

38.2.4 Credit Risk Concentration Analysis

(a) Loans measured at amortised cost

Most of counterparties of loan transactions, before considering collaterals and other credit reinforcements, are concentrated in Korea. The ratios of loans to individuals and corporations and related allowances as at December 31, 2023 and 2022, are as follows:


	2023
(in thousands of Korean won)	Loans measured at amortised cost		Ratio (%)		Allowances			Carrying amount
Individuals		3,397,169,142		32.07		(6,005,060	)		3,391,164,082
Corporations		7,196,838,736		67.93		(169,056,882	)		7,027,781,854

		10,594,007,878		100.00		(175,061,942	)		10,418,945,936


	2022
(in thousands of Korean won)	Loans measured at amortised cost		Ratio (%)		Allowances			Carrying amount
Individuals		3,013,311,847		33.57		(5,309,305	)		3,008,002,542
Corporations		5,963,136,067		66.43		(63,634,997	)		5,899,501,070

		8,976,447,914		100.00		(68,944,302	)		8,907,503,612

The details of the Group’s loans measured at amortised cost by industry as at December 31, 2023 and 2022, are as follows:


	2023
(in thousands of Korean won)	Loans measured at amortised cost		Ratio (%)		Allowances			Carrying amount
Financial service		4,601,607,375		43.44		(52,571,064	)		4,549,036,311
Manufacturing		492,500,481		4.65		(4,293,484	)		488,206,997
Service		1,393,752,994		13.16		(105,495,264	)		1,288,257,730
Others		708,977,886		6.69		(6,697,070	)		702,280,816
Individuals		3,397,169,142		32.06		(6,005,060	)		3,391,164,082

		10,594,007,878		100.00		(175,061,942	)		10,418,945,936


	2022
(in thousands of Korean won)	Loans measured at amortised cost		Ratio (%)		Allowances			Carrying amount
Financial service		3,286,456,276		36.61		(27,120,284	)		3,259,335,992
Manufacturing		467,421,330		5.21		(3,551,434	)		463,869,896
Service		1,314,159,811		14.64		(27,974,937	)		1,286,184,874
Others		895,098,650		9.97		(4,988,342	)		890,110,308
Individuals		3,013,311,847		33.57		(5,309,305	)		3,008,002,542

		8,976,447,914		100.00		(68,944,302	)		8,907,503,612

(b) Deposits, Securities (except equity instruments) and Derivatives

Most of deposits, securities (except equity instruments) and derivatives, before considering collaterals and other credit reinforcements, are concentrated in securities issued in Korea. The details of the Group’s securities (except equity instruments) by industry as at December 31, 2023 and 2022, are as follows:

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December 31, 2023 and 2022


	2023
(in thousands of Korean won)	Amount		Ratio (%)		Allowances			Carrying amount
Deposits measured at amortised cost
Banking and insurance		2,312,607,032		100.00		(290,229	)		2,312,316,803

		2,312,607,032		100.00		(290,229	)		2,312,316,803

Securities at FVTPL
Government and government funded institutions		12,120,547,410		35.16		—			12,120,547,410
Banking and insurance		10,979,530,283		31.85		—			10,979,530,283
Others		11,374,398,394		32.99		—			11,374,398,394

		34,474,476,087		100.00		—			34,474,476,087

Derivatives financial assets
Government and government funded institutions		2,343,222		0.21		—			2,343,222
Banking and insurance		1,095,977,872		96.26		—			1,095,977,872
Others		40,171,797		3.53		—			40,171,797

		1,138,492,891		100.00		—			1,138,492,891

Securities at FVOCI
Government and government funded institutions		1,619,519,950		37.92		—			1,619,519,950
Banking and insurance		1,524,865,892		35.71		—			1,524,865,892
Others		1,125,933,195		26.37		—			1,125,933,195

		4,270,319,037		100.00		—			4,270,319,037

		42,195,895,047				(290,229	)		42,195,604,818


	2022
(in thousands of Korean won)	Amount		Ratio (%)		Allowances			Carrying amount
Deposits measured at amortised cost
Banking and insurance		4,538,086,485		100.00		(645,224	)		4,537,441,261

		4,538,086,485		100.00		(645,224	)		4,537,441,261

Securities at FVTPL
Government and government funded institutions		10,302,987,449		36.51		—			10,302,987,449
Banking and insurance		9,839,206,275		34.87		—			9,839,206,275
Others		8,076,449,164		28.62		—			8,076,449,164

		28,218,642,888		100.00		—			28,218,642,888

Derivatives financial assets
Government and government funded institutions		1,596,038		0.09		—			1,596,038
Banking and insurance		1,690,445,757		98.04		—			1,690,445,757
Others		32,268,463		1.87		—			32,268,463

		1,724,310,258		100.00		—			1,724,310,258

Securities at FVOCI
Government and government funded institutions		449,958,939		10.94		—			449,958,939
Banking and insurance		2,493,923,434		60.64		—			2,493,923,434
Others		1,168,846,251		28.42		—			1,168,846,251

		4,112,728,624		100.00		—			4,112,728,624

		38,593,768,255				(645,224	)		38,593,123,031

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Notes to the Consolidated Financial Statements

December 31, 2023 and 2022

38.2.5 Credit Quality of Financial Assets

(a) Loans measured at amortised cost

The credit quality of loans measured at amortised cost and loans measured at fair value through profit or loss as at December 31, 2023 and 2022, are as follows:


	2023
(in thousands of Korean won)	The financial instruments applying 12-month expected credit losses		The financial instruments applying lifetime expected credit losses				The financial instruments applying Credit loss model		The financial instruments not applying expected credit loss model		Total
			Non-impaired		Impaired		The financial instruments applying Credit loss model				Total
Loans measured at amortised cost 1
Corporates
Grade 1		3,673,505,603		—		—		—		—		3,673,505,603
Grade 2		3,106,825,830		619,543		—		—		—		3,107,445,373
Grade 3		61,467,462		107,490,000		—		—		—		168,957,462
Grade 4		39,278,916		148,024,000		—		—		—		187,302,916
Grade 5		—		—		59,627,382		—		—		59,627,382

		6,881,077,811		256,133,543		59,627,382		—		—		7,196,838,736

Retails
Grade 1		3,389,391,956		—		—		—		—		3,389,391,956
Grade 2		321,798		—		—		—		—		321,798
Grade 3		—		—		—		—		—		—
Grade 4		1,450,328		—		—		—		—		1,450,328
Grade 5		—		—		6,005,060		—		—		6,005,060

		3,391,164,082		—		6,005,060		—		—		3,397,169,142

Loans measured at FVTPL
Corporates
Grade 1		—		—		—		—		235,977		235,977
Grade 2		—		—		—		—		—		—
Grade 3		—		—		—		—		—		—
Grade 4		—		—		—		—		—		—
Grade 5		—		—		—		—		—		—

		—		—		—		—		235,977		235,977

		10,272,241,893		256,133,543		65,632,442		—		235,977		10,594,243,855

1	The amounts disclosed in above table are before deduction of allowances


	2022
(in thousands of Korean won)	The financial instruments applying 12-month expected credit losses		The financial instruments applying lifetime expected credit losses				The financial instruments applying Credit loss model		The financial instruments not applying expected credit loss model		Total
			Non-impaired		Impaired		The financial instruments applying Credit loss model				Total
Loans measured at amortised cost 1
Corporates
Grade 1		2,201,520,418		—		—		—		—		2,201,520,418
Grade 2		3,627,589,800		—		—		—		—		3,627,589,800
Grade 3		48,465,895		30,000,000		—		—		—		78,465,895
Grade 4		37,203,171		—		—		—		—		37,203,171
Grade 5		—		—		18,356,784		—		—		18,356,784

		5,914,779,284		30,000,000		18,356,784		—		—		5,963,136,068

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December 31, 2023 and 2022


Retails
Grade 1	2,917,664,910	—	—	—	—	2,917,664,910
Grade 2	90,276,978	—	—	—	—	90,276,978
Grade 3	—	—	—	—	—	—
Grade 4	60,654	—	—	—	—	60,654
Grade 5	—	—	5,309,306	—	—	5,309,306

	3,008,002,542	—	5,309,306	—	—	3,013,311,848

Loans measured at FVTPL
Corporates
Grade 1	—	—	—	—	44,489,203	44,489,203
Grade 2	—	—	—	—	—	—
Grade 3	—	—	—	—	—	—
Grade 4	—	—	—	—	—	—
Grade 5	—	—	—	—	—	—

	—	—	—	—	44,489,203	44,489,203

	8,922,781,826	30,000,000	23,666,090	—	44,489,203	9,020,937,119

1	The amounts disclosed in above table are before deduction of allowances


Ranges	Corporates	Retails
Grade 1	AAA ~ BBB+	1 ~ 5 grade
Grade 2	BBB ~ BB	6 ~ 8 grade
Grade 3	BB- ~ B	9 ~ 10 grade
Grade 4	B- ~ CCC	11 grade
Grade 5	Below CC	Below 12 grade

The effect of measured credit risk which is released due to enhancement of collateral and other credit supplements secured for loans as at December 31, 2023 and 2022, are as follows:


	2023
(in thousands of Korean won)	The financial instruments applying 12-month expected credit losses		The financial instruments applying lifetime expected credit losses				The financial instruments applying Credit loss model		The financial instruments not applying expected credit loss model		Total
			Non-impaired		Impaired		The financial instruments applying Credit loss model				Total
Guarantee		10,048,992		—		—		—		—		10,048,992
Real estate		385,610,364		27,958,078		1,037,278		—		—		414,605,720
Securities		7,553,968,485		600,370		—		—		—		7,554,568,855

		7,949,627,841		28,558,448		1,037,278		—		—		7,979,223,567


	2022
(in thousands of Korean won)	The financial instruments applying 12-month expected credit losses		The financial instruments applying lifetime expected credit losses				The financial instruments applying Credit loss model		The financial instruments not applying expected credit loss model		Total
			Non-impaired		Impaired		The financial instruments applying Credit loss model				Total
Guarantee		7,643,969		—		—		—		—		7,643,969
Real estate		290,470,326		—		208,363		—		—		290,678,689
Securities		6,366,812,101		—		—		—		—		6,366,812,101

		6,664,926,396		—		208,363		—		—		6,665,134,759

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December 31, 2023 and 2022

(b) Securities (debt instruments)

The credit quality of securities (debt instruments) as at December 31, 2023 and 2022, are as follows:


	2023
(in thousands of Korean won)	The financial instruments applying 12-month expected credit losses		The financial instruments applying lifetime expected credit losses				The financial instruments applying credit loss model		The financial instruments not applying expected credit loss model		Total
			Non-impaired		Impaired		The financial instruments applying credit loss model				Total
Financial assets at FVOCI 1
Grade 1		4,032,611,482		—		—		—		—		4,032,611,482
Grade 2		237,707,555		—		—		—		—		237,707,555
Grade 3		—		—		—		—		—		—
Grade 4		—		—		—		—		—		—
Grade 5		—		—		—		—		—		—

		4,270,319,037		—		—		—		—		4,270,319,037

1	Before deduction of allowances


	2022
(in thousands of Korean won)	The financial instruments applying 12-month expected credit losses		The financial instruments applying lifetime expected credit losses				The financial instruments applying credit loss model		The financial instruments not applying expected credit loss model		Total
			Non-impaired		Impaired		The financial instruments applying credit loss model				Total
Financial assets at FVOCI 1
Grade 1		3,262,409,959		—		—		—		—		3,262,409,959
Grade 2		836,531,848		—		—		—		—		836,531,848
Grade 3		13,786,817		—		—		—		—		13,786,817
Grade 4		—		—		—		—		—		—
Grade 5		—		—		—		—		—		—

		4,112,728,624		—		—		—		—		4,112,728,624

1	Before deduction of allowances

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Notes to the Consolidated Financial Statements

December 31, 2023 and 2022

The Group’s standard for credit quality of securities(except equity investments) linked to credit rating presented by 3rd party credit rating institutions is as follows.

Domestic

Foreign

Credit

Quality

KIS

NICE

FnPricing

S&P

Fitch-IBCA

Moody’s

Grade 1

AA0 to AAA

A- to AAA

A3 to Aaa

Grade 2

A- To AA-

BBB- to BBB+

Baa3 to Baa1

Grade 3

BBB0 to BBB+

BB to BB+

Ba2 to Ba1

Grade 4

BB0 to BBB-

B+ to BB-

B1 to Ba3

Grade 5

Below BB-

Below B

Below B2

The classification of credit quality for debt instruments in Korean won is based on lowest credit rating among the one of three domestic credit rating institutions and the classification of credit quality for debt instruments in foreign currency is based on lowest credit rating among the one of three foreign credit rating institutions.

The credit quality of deposits as at December 31, 2023 and 2022, are as follows:


	2023
(in thousands of Korean won)	The financial instruments applying 12-month expected credit losses		The financial instruments applying lifetime expected credit losses				The financial instruments applying credit loss model		Total
			Non-impaired		Impaired		The financial instruments applying credit loss model		Total
Deposits measured at amortised cost 1
Grade 1		2,312,607,032		—		—		—		2,312,607,032
Grade 2		—		—		—		—		—
Grade 3		—		—		—		—		—
Grade 4		—		—		—		—		—
Grade 5		—		—		—		—		—

		2,312,607,032		—		—		—		2,312,607,032

1	Before deduction of allowances


	2022
(in thousands of Korean won)	The financial instruments applying 12-month expected credit losses		The financial instruments applying lifetime expected credit losses				The financial instruments applying credit loss model		Total
			Non-impaired		Impaired		The financial instruments applying credit loss model		Total
Deposits measured at amortised cost 1
Grade 1		4,538,221,418		—		—		—		4,538,221,418
Grade 2		—		—		—		—		—
Grade 3		—		—		—		—		—
Grade 4		—		—		—		—		—
Grade 5		—		—		—		—		—

		4,538,221,418		—		—		—		4,538,221,418

1	Before deduction of allowances

The Group’s standard for credit quality of deposits is same as the one of debt securities.

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Notes to the Consolidated Financial Statements

December 31, 2023 and 2022

(d) Commitments

The credit quality of commitments as at December 31, 2023 and 2022, are as follows:


	2023
(in thousands of Korean won)	The financial instruments applying 12-month expected credit losses		The financial instruments applying lifetime expected credit losses				The financial instruments applying credit loss model		Total
			Non-impaired		Impaired		The financial instruments applying credit loss model		Total
Guaranteed payment and commitment
Grade 1		680,456,667		—		—		—		680,456,667
Grade 2		1,434,390,763		12,713,791		—		—		1,447,104,554
Grade 3		42,688,444		37,710,000		—		—		80,398,444
Grade 4		416,318,854		6,313,337		—		—		422,632,191
Grade 5		—		—		—		—		—

		2,573,854,728		56,737,128		—		—		2,630,591,856


	2022
(in thousands of Korean won)	The financial instruments applying 12-month expected credit losses		The financial instruments applying lifetime expected credit losses				The financial instruments applying credit loss model		Total
			Non-impaired		Impaired		The financial instruments applying credit loss model		Total
Guaranteed payment and commitment
Grade 1		431,461,335		—		—		—		431,461,335
Grade 2		937,138,592		31,731,909		—		—		968,870,501
Grade 3		32,238,671		—		—		—		32,238,671
Grade 4		416,781,907		—		—		—		416,781,907
Grade 5		—		—		—		—		—

		1,817,620,505		31,731,909		—		—		1,849,352,414

(e) Other receivables from securities transactions

Among loan and receivables which are classified as other financial assets, other receivables from securities transactions, as at December 31, 2023 and 2022, are as follows:


(in thousands of Korean won)	2023		2022
Other receivables related to proprietary trading		227,167,398		182,035,890
Other receivables related to brokerage transactions		2,917,552,941		2,002,456,540

The Group recognizes receivables and payables between Korea Exchange (Clearing and Settlement Organization) and customers regarding securities brokerage transactions on the trade date. The Group is exposed to credit risks between the trade date and settlement date (generally less than two business days from the trade date) relating to investment brokerage business, which is standardized by related regulations. As a central counterparty, Korea Exchange mitigates the payment default risk by managing collective fund for default loss, and the Group mitigates customer default risk through margin requirements system. Also, if the customers can not pay by the settlement date, the Group can collect the receivables through covering. Therefore, credit risk that the Group actually bears is linked to the price fluctuation risk of securities between the trade date and the settlement date.

In addition, related to standardized investment trading of securities, the Group recognizes the on-the-counter transactions on the Korea Exchange, the clearing and settlement institution, and over-the-counter transactions with the customer on the date which the sales contract is signed for the assets and liabilities. Accordingly, the Company is exposed to the risk of price fluctuation risk and credit risk of the securities subject to trading during the period between the date of execution of the sales contract and the settlement date.

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Notes to the Consolidated Financial Statements

December 31, 2023 and 2022

38.3 Liquidity Risk

38.3.1 Overview of Liquidity Risk

Liquidity risk is the risk of insolvency or loss due to a disparity between the inflow and outflow of funds, unexpected outflow of funds, and obtaining funds at a high price or disposing of securities at an unfavorable price due to lack of available funds. The Group manages its liquidity risk through analysis of the contractual maturity of all financial assets, liabilities and off-statement of financial position items such as commitments and financial guarantee contracts. The Group discloses them by maturity groups: Up to one month, between over one month and three months, between over three months and twelve months, between over one year and five years, and over five years.

38.3.2 Liquidity Risk Management Policy

The Group has established an appropriate liquidity risk management framework for the management of the Group’s short-, medium- and long-term funding and liquidity management requirements. The Group manages liquidity risk by maintaining adequate reserves, banking facilities and reserve borrowing facilities, by continuously monitoring forecast and actual cash flows and by matching the maturity profiles of financial assets and liabilities. Meanwhile, additional details of unused funding arrangement to reduce liquidity risk that the Group holds at its discretion are discussed in Note 41.

38.3.3 Analysis on Remaining Contractual Maturities of Financial Liabilities

Cash flows disclosed for the maturity analysis are undiscounted contractual principal and interest to be received (paid) and, thus, differ from the amount in the financial statements which is based on the present value of expected cash flows in some cases.

The remaining contractual maturities of financial liabilities as at December 31, 2023 and 2022, are as follows:


	2023
(in thousands of Korean won)	On demand		Up to one month		One to three months		Three to 12 months		12 months to five years		More than five years		Total
Financial liabilities
Financial liabilities at FVTPL		2,860,033,642		—		—		—		—		—		2,860,033,642
Financial liabilities designated at FVTPL 1		7,975,847,458		—		—		—		—		—		7,975,847,458
Derivatives (trading) 2		1,810,865,351		—		—		—		—		—		1,810,865,351
Derivatives (hedge)		—		5,307,120		—		—		—		—		5,307,120
Deposit liabilities 3		7,122,595,110		—		—		—		—		—		7,122,595,110
Borrowings		10,669,556,820		7,741,913,669		2,396,282,276		7,926,486,695		2,240,516,466		21,260,145		30,996,016,071
Other financial liabilities		16,792,892		3,635,476,628		6,950,761		25,229,834		89,729,147		2,013,759		3,776,193,021
Guaranteed payments and commitment 4		2,630,591,856		—		—		—		—		—		2,630,591,856

1	Derivatives-linked securities as financial liabilities designated at FVTPL are classified as ‘on demand’ because derivatives-linked securities are subject to early settlement.

2	Derivatives are classified as ‘on demand’ because contract maturity is not necessary in understanding the cash flow timing of the derivatives

3	Deposits that are contractually repayable on demand or on short notice are classified as ‘on demand’ category.

4	With respect to the guaranteed payments and commitments, the amounts included above, which the Group might pay at maximum based on the contract, if the warrantee claims the entire amount of the guarantee, are classified on the basis of the earliest period when those agreements may be executed.

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Notes to the Consolidated Financial Statements

December 31, 2023 and 2022


	2022
(in thousands of Korean won)	On demand		Up to one month		One to three months		Three to 12 months		12 months to five years		More than five years		Total
Financial liabilities
Financial liabilities at FVTPL		2,082,979,265		—		—		—		—		—		2,082,979,265
Financial liabilities designated at FVTPL 1		10,088,600,213		—		—		—		—		—		10,088,600,213
Derivatives (trading) 2		2,310,859,900		—		—		—		—		—		2,310,859,900
Derivatives (hedge)		—		10,070,190		422,620		—		1,123,380		—		11,616,190
Deposit liabilities 3		6,799,233,076		—		—		—		—		—		6,799,233,076
Borrowings		7,771,843,528		6,482,377,184		3,141,089,345		4,570,503,698		1,780,651,651		19,855,119		23,766,320,525
Other financial liabilities		16,349,365		2,183,847,861		8,689,578		29,369,004		93,934,508		10,625,818		2,342,816,134
Guaranteed payments and commitment 4		1,849,352,415		—		—		—		—		—		1,849,352,415

1	Derivatives-linked securities as financial liabilities designated at FVTPL are classified as ‘on demand’ because derivatives-linked securities are subject to early settlement.

2	Derivatives are classified as ‘on demand’ because contract maturity is not necessary in understanding the cash flow timing of the derivatives

3	Deposits that are contractually repayable on demand or on short notice are classified as ‘on demand’ category.

4	With respect to the guaranteed payments and commitments, the amounts included above, which the Group might pay at maximum based on the contract, if the warrantee claims the entire amount of the guarantee, are classified on the basis of the earliest period when those agreements may be executed.

38.4 Market Risk

38.4.1 Overview of Market Risk

Market risk refers to the risk that the value of a position held by the Group may fluctuate due to price fluctuations of market factors such as stock, interest rates, foreign exchange rates, commodity and others.

Market risk is daily managed by establishing the limitations considering products’ natures such as position limitations, loss limitations, VaR limitations, sensitivity limitations (duration, delta, gamma, vega, others) and others. Relevant business procedures are processed by written regulations and guidelines.

38.4.2 Value at Risk (“VaR”)

The Exposure to market risk is measured by the Value at Risk (VaR). VaR is the potential loss that can occur in the holding position when the market price moves in an adverse direction within a given confidence level for a given holding period in the normal market.

Historical simulation model is used to calculate 10days VaR. Historical simulation model is based on past changes of market variables without assuming a specific probability distribution.

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Notes to the Consolidated Financial Statements

December 31, 2023 and 2022

The Group uses the 10-day return of the past two-year time series of the asset risk factor and uses the 99% confidence level of the two-year time series of the portfolio. 10days VaR that is under 99% of confidence level that the Group uses reflects daily losses do not exceed the reported VaR with 99% chance.

The average, minimum and maximum amount of the Group’s VaR (99%, 10 days) as at December 31, 2023 and 2022, are as follows:


	2023
(in thousands of Korean won)	Average		Maximum		Minimum		December 31, 2023
Total VaR		41,016,817		74,963,467		16,665,793		37,039,843


	2022
(in thousands of Korean won)	Average		Maximum		Minimum		December 31, 2022
Total VaR		35,197,541		60,205,109		18,655,089		20,195,624

38.4.3 Risk Management by Market Risk Factors

The Group’s market risk is comprised of interest rate risk, foreign exchange rate risk and stock price risk.

(a) Stock price risk

Stock price risk arises from the Group’s foreign currency stocks and Korean won stocks.

Hedging instruments of Equity Linked Security and Equity Linked Warrant comprise most of stock trading portfolio and certain security proprietary trading is composed of trading securities on the exchange, futures contracts maturing in a month or two, and others under the restriction of position limitation, sale at loss, loss limitation, and others. Marketable stocks among non-trading positions and stock beneficiary certificates are included in stock price risk as market VaR is computed.

Risk Management Council allocates position and loss limitations, and risk management department monitors asset management department’s possible breach of limitations and other special matters on a daily basis.

(b) Interest rate risk

Trading position interest rate risk usually arises from debt instruments denominated in Korean won. The Group’s trading strategy is to benefit from short-term movements in the prices of debt instruments arising from changes in interest rates.

The product prices of the Group’s trading accounts are disclosed daily. The risks related to trading accounts are managed by using market price based method such as market VaR and sensitivity analysis.

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Notes to the Consolidated Financial Statements

December 31, 2023 and 2022

Foreign exchange rate risk arises through ownership of assets and liabilities, denominated in currencies other than Korean won, from non-trading positions, or through foreign currency forward contracts, currency swaps and foreign currency trading securities.

The Group computes foreign currency position’s net position regularly to follow the Regulation on Financial Investment Business and reports it to the supervisory body.

Also, the Group manages the risk for total position exposed to foreign exchange rate including non-trading position by using market price base method such as market VaR and sensitivity analysis.

38.4.4 Risk Management by Interest Rate Risk Factors

The Group closely monitors markets and the outputs of the various industry working groups that manage the transition to the new interest rate indicator, including statements made by the IBOR regulator and various consultative councils related to the transition to alternative interest rates.

In response to these announcements, the Group established an IBOR-related response plan consisting of workflows such as risk management, accounting, tax, law, computerization, and customer management, and completed most of the conversions and replacements accordingly. The Chief Financial Officer (CFO) is responsible for the planning and progress management, and important matters are reported to the Board of Directors.

The purpose of the plan is to identify the impacts and risks associated with interest rate indicator reform within the business, and to prepare and implement an action plan to facilitate the transition to an alternative indicator interest rate.

There are no financial instruments that have not been converted to an alternative indicator interest rate as at December 31, 2023. The carrying amount of financial instruments that have not been converted to an alternative indicator interest rate as of December 31, 2022 is as follows:


(in thousands of Korean won)	2022
	Exposure amount 1 USD LIBOR
Measured at amortised cost
Loans		7,482,357
Measured at fair value
Financial assets at FVTPL(non-derivative)		4,694,580
Financial liabilities at FVTPL(derivative)		103,221,786

1	Financial instruments that will expire before conversion to an alternative indicator interest rate are excluded.

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Notes to the Consolidated Financial Statements

December 31, 2023 and 2022

38.5 Operational Risk

38.5.1 Concept

The Group defines operational risk to the extent of financial risk and non-financial risk incurred by unreasonable or wrong internal process, labor, system and external incidents.

38.5.2 Operational Risk Management

The purpose of operational risk management is to control activity through continuous improvement of internal controls, performing proactive preventive control, proliferation of culture of risk management by establishing internal control that could respond quickly against change of business environment. OMRS (Operational Risk Management System supports performing overall risk management such as recognition of operational risk, evaluation and monitoring. Periodically, through RCSA (Risk Control Self Assessment), management of KRI (Key Risk Indicator), management of data loss and related preparation of countermeasures, it controls the risks in advance, as well as collecting data for future advanced management method.

38.6 Capital Management

Main purpose of the capital risk management of the Group is optimizing use of capital and sustaining healthy financial status in order to maximize shareholder value. The Group has performed capital risk management through estimating net capital ratio based on ‘Capital Market and Financial Investment Business Act’, enforced in February 2009.

Net capital ratio is the net capital minus the total risk amount divided by the essential equity to sustain per each business unit. [(Net capital – total risk amounts) / essential equity to sustain per each business unit]. This formula is calculated based on the financial statements amount.

The net capital is calculated by subtracting deductible items from and including additional item to financial investor’s net asset (asset-liability) as at date. The deductible item refers any asset that is difficult to be converted into cash immediately such as property, plant and equipment. The additional item includes any item recorded as liability without redemption obligation, internal reserves against future losses, items redeemable in kind and items that function as complemental capital.

Total amount of risk is quantification of all of possible losses from operation of business as a financial investor. Total amount of risk is comprised of the following; market risks which quantify the possible losses due to fluctuation of stock price, interest rate, and exchange rate of the securities held by the investment firms; credit risks which are the possible losses due to the breach of contract by the counterparties; operation risks which are the possible losses due to accidents, errors, illegal conduct, and any other potential losses from deteriorated operation condition.

According to the Financial Investment Act, the regulation requires that net capital ratio must be maintained above 100% for the appropriation of the capital and it is required to improve the management if the financial investment firm does not meet the regulation for the net capital ratio.

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Notes to the Consolidated Financial Statements

December 31, 2023 and 2022

39. Offsetting Financial Assets and Financial Liabilities

The Group enters into International Derivatives Swaps and Dealers Association (“ISDA”) master netting agreements or similar agreement with the Group’s derivative counterparties. The Group also enters into repurchase agreements and securities borrowing and lending agreements similar to the master netting agreement for derivatives. Master netting agreements provide protection in bankruptcy in certain circumstances and, where legally enforceable, enable receivables and payables with the same counterparty to be offset for accounting and risk management purposes.


	2023
(in thousands of Korean won)	Gross amount		Offset amount		Net amounts presented in the statement of financial position		Amounts not offset				Net amount
(in thousands of Korean won)	Gross amount		Offset amount				Recognized financial instruments		Cash collateral		Net amount
Financial assets
Derivatives assets, others 1		1,267,721,660		—		1,267,721,660		915,298,245		190,995,439		161,427,976
Securities purchased under reverse repurchase agreements		1,369,600,000		—		1,369,600,000		1,369,600,000		—		—
Other receivables 4		2,840,390,529		2,819,519,085		20,871,444		—		—		20,871,444
Other receivables (Payment and settlement)		29,104,287		29,104,287		—		—		—		—

		5,506,816,476		2,848,623,372		2,658,193,104		2,284,898,245		190,995,439		182,299,420

Financial liabilities
Derivatives liabilities, others 1		2,529,883,307		—		2,529,883,307		2,324,932,716		75,881,703		129,068,888
Securities sold under reverse resale agreements 2		9,036,097,623		—		9,036,097,623		9,036,097,623		—		—
Securities sold 3		2,860,033,642		—		2,860,033,642		2,860,033,642		—		—
Other payables 4		3,042,547,000		2,819,519,085		223,027,915		—		—		223,027,915
Other payables (Payment and settlement)		47,550,049		29,104,287		18,445,762		—		—		18,445,762

		17,516,111,621		2,848,623,372		14,667,488,249		14,221,063,981		75,881,703		370,542,565

1	Both derivatives (trading) and derivatives (hedge) are included.

2	Securities sold under reverse resale agreements to the customers is included.

3	Securities sold is from securities borrowing and lending agreement.

In relation to customer brokerage transactions, the offset amount of receivables and liabilities arising from same-day transactions between the Korea Exchange and the Group is included. However, receivables of 2,674,623 million and payables of 2,783,289 million arising from same-day transactions between customers and the Group are excluded.


	2022
(in thousands of Korean won)	Gross amount		Offset amount		Net amounts presented in the statement of financial position		Amounts not offset				Net amount
(in thousands of Korean won)	Gross amount		Offset amount				Recognized financial instruments		Cash collateral		Net amount
Financial assets
Derivatives assets, others 1		1,800,627,070		—		1,800,627,070		1,240,440,412		194,397,457		365,789,201
Securities purchased under reverse repurchase agreements		730,100,000		—		730,100,000		730,100,000		—		—
Other receivables 4		1,985,950,659		1,897,820,808		88,129,851		—		—		88,129,851
Other receivables (Payment and settlement)		26,385,142		26,385,142		—		—		—		—

		4,543,062,871		1,924,205,950		2,618,856,921		1,970,540,412		194,397,457		453,919,052

Financial liabilities
Derivatives liabilities, others 1		3,357,495,348		—		3,357,495,348		2,658,744,222		83,836,686		614,914,440

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Notes to the Consolidated Financial Statements

December 31, 2023 and 2022


Securities sold under reverse resale agreements 2	6,231,390,409	—	6,231,390,409	6,231,390,409	—	—
Securities sold 3	2,082,979,265	—	2,082,979,265	2,082,979,265	—	—
Other payables 4	1,954,742,873	1,897,820,808	56,922,065	—	—	56,922,065
Other payables (Payment and settlement)	27,716,059	26,385,142	1,330,917	—	—	1,330,917

	13,654,323,954	1,924,205,950	11,730,118,004	10,973,113,896	83,836,686	673,167,422

1	Both derivatives (trading) and derivatives (hedge) are included.

2	Securities sold under reverse resale agreements to the customers is included.

3	Securities sold is from securities borrowing and lending agreement.

4	The offsetting amounts of bonds and debts arising from transactions occurring on the same day between the Korea Exchange and the Group in relation to the client’s consignment trading are included.

40. Lease

40.1 As a lessee

(a) The amounts recognized in the consolidated statement of financial position

The amounts related to lease recognized in the consolidated statement of financial position as at December 31, 2023 and 2022, are as follows;


(in thousands of Korean won)	2023		2022
Right-of-use assets 1
Buildings		66,674,422		76,580,927
Vehicles		1,690,836		2,258,588
Others		2,396,393		1,005,513

		70,761,651		79,845,028

Lease liabilities		108,095,746		125,593,239

1	The amount is included in property and equipment in the consolidated statement of financial position.

(b) The amounts recognized in the consolidated statement of profit or loss

The amounts related to lease recognized in the consolidated statement of profit or loss for the year ended December 31, 2023 and 2022, are as follows


(in thousands of Korean won)	2023		2022
Depreciation of the right-of-use assets
Buildings		24,399,773		24,022,595
Vehicles		1,334,079		1,188,483
Others		1,012,585		1,081,530

		26,746,437		26,292,608

Interest income from lease receivables (included in financial income)		935,219		1,084,287
Interest expense to lease liabilities (included in financial cost)		4,881,474		3,573,738
Lease payment for leases for which the underlying asset is of low value (included in administrative expenses, not-including lease for short-term period)		265,317		1,141,427
Variable lease payments which are not included in the measurement of lease liabilities (included in administrative expenses)		164,326		126,576

The total cash outflows for leases in 2023 and 2022 are 34,842 million and 33,554 million, respectively.

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Notes to the Consolidated Financial Statements

December 31, 2023 and 2022

40.2 As a Lessor

(a) Financial Lease

As at December 31, 2023 and 2022, total investment on financial lease and present value of minimum lease payments and unrealized interest income of financial lease are as follows:


(in thousands of Korean won)	2023		2022
Total Investment on lease		29,544,593		35,135,664
Net Investment on lease		27,558,977		32,271,624
Present value of minimum lease payments		27,558,977		32,271,624
Unrealized interest income		1,985,616		2,864,040

(b) Operating Lease

As at December 31, 2023 and 2022, future minimum lease receipts expected under non-cancellable lease contracts are as follows:


(in thousands of Korean won)	2023		2022
Within 1 year		21,912,566		32,399,049
1 - 5 years		84,869,305		127,788,610
Over 5 years		16,464,702		170,691,730

		123,246,573		330,879,389

41. Contingent Liabilities and Commitments

As at December 31, 2023 and 2022, the Group is involved in pending lawsuits, as follows:


	2023				2022
(in thousands of Korean won)	Number of lawsuits		Amount		Number of lawsuits		Amount
Defendant		43		229,543,768		33		202,977,447
Plaintiff		18		185,169,852		8		177,971,745

The Group expects that these lawsuits do not have significant impact on the financial position.

The Group has entered into various agreements with financial institutions as at December 31, 2023 and 2022, as follows:


		Credit line
(in thousands of Korean won)	Financial institution	2023		2022
Overdraft (including daily overdraft)	Kookmin Bank and others		1,174,700,000		530,000,000
General loan	Kookmin Bank		40,000,000		40,000,000
Securities underwriting loan	KSFC		600,000,000		600,000,000
Working capital loan (general)	KSFC		475,000,000		475,000,000
Note trading at a discount (general)	KSFC		300,000,000		300,000,000
Note trading at a discount (trust)	KSFC		Limit of subscription deposits		Limit of subscription deposits
Bond dealer’s loan (general)	KSFC		300,000,000		500,000,000
Securities underwriting financing	KSFC		1,710,000,000		1,710,000,000
Committed line	Industrial and Commercial Bank of China, etc		414,258,000		—
Credit line	VIETCOMBANK and other		806,563,000		—

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KB SECURITIES CO., LTD. and Subsidiaries

Notes to the Consolidated Financial Statements

December 31, 2023 and 2022

The guarantees and various commitment as at December 31, 2023 and 2022, are as follows:


(in thousands of Korean won)	2023		2022
Agreement to purchase commercial papers 1		1,287,400,000		337,800,000
Loan agreements		226,650,000		6,650,000
Credit line agreements		529,021,439		1,028,048,939
LOC and Investment commitments		587,520,417		476,853,476

		2,630,591,856		1,849,352,415

1	According to the above arrangement, the Group holds the asset-backed short-term bonds amounting to 441,661 million and 556,400 million as at December 31, 2023 and 2022, respectively.

The Group has been provided with 10,846 million and 10,731 million in guarantees related to provisional attachment and others by Seoul Guarantee Insurance as at December 31, 2023 and 2022, respectively.

The securities in custody as at December 31, 2023 and 2022, are as follows:


(in thousands of Korean won)	2023		2022		Valuation method
Trustor securities		254,103,739,603		200,379,840,702	Fair value
Saver securities		554,135,269		308,762,230	Fair value
Beneficiary securities		40,014,012,881		35,441,473,205	Standard selling price

		294,671,887,753		236,130,076,137

The Group, as a selling company of qualified investor private equity fund that aims to lend money to corporations (borrowers) investing in apartment rental business for disabled people in Australia, intermediated 326.5 billion of trusts and funds to the individuals and institutional investors. However, the local borrower’s breach of the contract made the fund inoperable and there is a possibility of loss of the principal.

As at December 31, 2023, three lawsuits (total litigation value: 54.5 billion) were filed to the Group as a defendant. On February 7, 2023, in one case, the first-instance verdict of the trial ordering the payment of a total of 29.8 billion and delayed interest thereon was announced, but the second trial on January 29, 2024 reached a different conclusion that orders to pay 12 billion of the investment principal and related interest for delay in payment thereof. The third trial is currently in progress.

Meanwhile, in another case, the second trial is currently in progress after the first trial on October 26, 2023, ruling ordering payment of 8.46 billion in remaining principal and the delayed interest for 8.29 billion of principal. For the remaining case, the first trial ruling was issued on February 14, 2024, ordering payment of 12.2 billion of the investment principal and the delayed interest. There is a possibility that the ruling in each of the above lawsuits will be changed in a higher trial.

Meanwhile, the Group has filed a lawsuit against JB Asset Management Co., Ltd, the fund management company, for compensation, and the first trial is currently in progress.

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KB SECURITIES CO., LTD. and Subsidiaries

Notes to the Consolidated Financial Statements

December 31, 2023 and 2022

42. Related Party Transactions

KB Financial Group Inc. owns 100% of ordinary shares of the KB Securities Co., Ltd. as at December 31, 2023 and 2022.

Significant balances and transactions, excluding loan and borrowing transactions, with related parties as at December 31, 2023 and 2022, are as follows:

(a) Receivables and payables


(in thousands of Korean won)	2023				2022
	Receivables		Payables		Receivables		Payables
The Parent Company
KB Financial Group Inc.		1,117		92,199,986		116,502,545		66,137,149
Others
Kookmin Bank		90,762,078		79,190,436		76,123,515		154,551,304
KB Asset Management Co., Ltd.		1,489		28,969		1,479		32,643,821
KB Real Estate Trust Co., Ltd.		—		371		—		622
KB Investment Co., Ltd.		649,679		124		627,295		236
KB Credit Information Co., Ltd.		—		88		—		147
KB Data System Co., Ltd.		251,014		15,917		856,887		43,007
KB Life Insurance Co., Ltd. 1		—		—		685,561		381,241
KB Kookmin Card Co., Ltd.		18,100		7,396,211		50,551		7,572,851
KB Savings Bank Co., Ltd.		—		464		—		552
KB Capital Co., Ltd.		670,591		2,644,074		96,317		2,380,696
KB Insurance Co., Ltd		14,493,287		54,132,067		52,388,172		20,353,598
KB Life Insurance Co., Ltd.(formerly, Prudential Life Insurance Co., Ltd.) 2		863,677		919,415		329,563		651,994
KB Wisestar Private Real Estate Fund Investment Trust No. 1		5,208		—		7,292		—
Other funds		1,630,769		7,325,572		206,781		19,141,815

1	The company disappeared through a merger with Prudential Life Insurance Co., Ltd. during the year ended December 31, 2022.

2	This company changed its name from Prudential Life Insurance Co., Ltd. to KB Life Insurance Co., Ltd. for the year ended December 31, 2022.

(b) Revenue and expenses


	2023				2022
(in thousands of Korean won)	Revenue		Expenses		Revenue		Expenses
Associates
KB-KDBC New Technology Business Investment Fund		—		—		129,289		—
KBTS Technology Venture Private Equity Fund		324,314		—		185,355		—
KB-SJ Tourism Venture Fund		311,969		—		209,347		—
KB-Brain KOSDAQ Scale-Up Fund		208,627		—		422,946		—
KB SPROTT Renewable Private Equity Fund I		319,739		—		345,339		—
KB-Stonebridge Secondary Private Equity Fund		694,681		—		705,744		—
KB-UTC Inno-Tech Venture Fund		433,897		—		449,015		—
KB-SP Private Equity Fund IV		—		—		210,945		—
KB-NAU Special Situation Corporate Restructuring Private Equity Fund		1,052,494		—		561,064		—
KB Material and Parts No. 1 PEF		739,000				352,500
KB Bio Private Equity Fund III Ltd. 1		—		—		4,034,553		—
KB-KTB Technology Venture Fund		668,904		—		599,726		—
KB-GeneN Medical Venture Fund 1		88,800		—		76,392		—

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KB SECURITIES CO., LTD. and Subsidiaries

Notes to the Consolidated Financial Statements

December 31, 2023 and 2022


	2023				2022
(in thousands of Korean won)	Revenue		Expenses		Revenue		Expenses
KB-BridgePole Venture Investment Fund		772,500		—		117,986		—
KB-Kyobo New Mobility Power Fund		78,750		—		68,825		—
KB Special Purpose Acquisition Company No.21		27,540		—		1,731,563		—
THE CHAEUL FUND NO.1(formerly, SKS IB NEW M&T FUND NO.1)		—		—		81,844		—
KB Special Purpose Acquisition Company No.22		1,012,571		—		1,157,075		—
KB-NP Green ESG New Technology Venture Capital Fund		1,173,292		—		435,147		—
KB Special Purpose Acquisition Company No.23 1		—		1,482,766		1,476,465		—
KB Special Purpose Acquisition Company No.25		1,130,184		—		—		—
KB-FT 1st Green Growth Investment Fund		135,338		—		—		—
KB Special Purpose Acquisition Company No.26		1,209,221		—		—		—
KB-SUSUNG 1st Investment Fund		128,572		—		—		—
KB Special Purpose Acquisition Company No.27		3,058,752		—		—		—
KB-BridgePole Venture Investment Fund 2		19,849		—		—		—
U-KB Credit No.1 Private Equity		227,959		—		—		—
The Parent Company
KB Financial Group Inc.		310,748		57,351		484,732		20,241
Others
Kookmin Bank		257,270,997		213,899,519		187,822,727		274,544,619
KB Asset Management Co., Ltd.		7,361		663,887		9,069		1,679,427
KB Real Estate Trust Co., Ltd.		350,619		23		936		3,010
KB Investment Co., Ltd.		1,842,385		8		1,902,935		4
KB Credit Information Co., Ltd.		148		5,764		221		3
KB Data System Co., Ltd.		904		987,085		955		1,120,617
KB Life Insurance Co., Ltd. 2		—		—		113,129		37,855
KB Kookmin Card Co., Ltd.		204,462		1,022,457		68,448		561,990
KB Savings Bank Co., Ltd.		747		134		831		14
KB Capital Co., Ltd.		408,904		2,786,876		305,322		41,981
KB Insurance Co., Ltd		20,481,878		89,888,364		68,091,902		67,731,685
KB Life Insurance Co., Ltd.(formerly, Prudential Life Insurance Co., Ltd.) 3		1,155,123		299,682		644,336		1,004,150
KB Wisestar Private Real Estate Fund Investment Trust No. 1		82,655		—		—		8,719,917
Other funds		22,212,851		2,765,534		18,649,158		11,988,579
Retirement pension		926,696		—		771,613		—
The Group
Employees		275,844		—		344,870		—

1	These companies are excluded from related parties during the year ended December 31, 2023 or 2022. The transaction amounts are up to the date of the exclusion.

2	The company disappeared through a merger with Prudential Life Insurance Co., Ltd. during the year ended December 31, 2022.

3	This company changed its name from Prudential Life Insurance Co., Ltd. to KB Life Insurance Co., Ltd. for the year ended December 31, 2022.

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Notes to the Consolidated Financial Statements

December 31, 2023 and 2022

(c) Significant loan and borrowing transactions with related parties for the years ended December 31, 2023 and 2022 are as follows:


	2023
(in thousands of Korean won)	Accounts	Beginning balance		Increase		Decrease			Other			Ending balance
Associates
KB Special Purpose Acquisition Company No.21	Hybrid bond with securities- like features		2,959,063		—		—			27,539			2,986,602
KB Special Purpose Acquisition Company No.22	Hybrid bond with securities- like features		1,972,075		—		—			1,012,571			2,984,646
KB Special Purpose Acquisition Company No.23 1	Hybrid bond with securities- like features		2,971,465		—		—			(1,482,766	)		1,488,699
KB Special Purpose Acquisition Company No.24 1	Hybrid bond with securities- like features		6,975,000		—		(6,975,000	)		—			—
KB Special Purpose Acquisition Company No.25	Hybrid bond with securities- like features		—		895,000		—			1,130,184			2,025,184
KB Special Purpose Acquisition Company No.26	Hybrid bond with securities- like features		—		995,000		—			1,209,221			2,204,221
KB Special Purpose Acquisition Company No.27	Hybrid bond with securities- like features		—		2,995,000		—			3,058,752			6,053,752
Others
Kookmin Bank	Deposits 2		867,537,998		—		—			(484,510,435	)		383,027,563
	Borrowings		142,077,500		1,363,551,123		(1,239,700,825	)		—			265,927,798
KB Kookmin Card Co., Ltd.	Debt Securities		—		30,000,000		—			127,334			30,127,334
KB Savings Bank Co., Ltd.	Borrowings		—		3,000,000		—			—			3,000,000
KB Insurance Co., Ltd	Borrowings		—		70,500,000		—			—			70,500,000
KB Capital Co., Ltd.	Borrowings		—		47,900,000		(4,588,000	)		—			43,312,000
KB STAR CLASBY 1 st Inc.	Borrowings		—		72,000,000		—			—			72,000,000
KB KBSTAR Money Market Active ETF	Debentures		—		20,000,000		(20,000,000	)		—			—
KB Money Market Active Fund	Debentures		—		6,000,000		(6,000,000	)		—			—
Executives	Deposit Liabilities		1,047,426		512,866		(925,075	)		—			635,217
The Group
Employees	Loans to employees		11,640,893		3,959,599		(3,013,397	)		—			12,587,095

1	These companies are not related parties of the Group as at December 31, 2023.

2	Transactions such as settlement payments for business reasons and deposits that can be deposited and withdrawn at any time between related parties are disclosed in net amounts.

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Notes to the Consolidated Financial Statements

December 31, 2023 and 2022


	2022
(in thousands of Korean won)	Accounts	Beginning balance		Increase		Decrease			Other		Ending balance
Associates
KB Special Purpose Acquisition Company No.171	Hybrid bond with securities-like features		999,500		—		(999,500	)		—		—
KB Special Purpose Acquisition Company No.181	Hybrid bond with securities-like features		3,058,774		—		(3,058,774	)		—		—
KB Special Purpose Acquisition Company No.191	Hybrid bond with securities-like features		2,090,861		—		(2,090,861	)		—		—
KB Special Purpose Acquisition Company No.201	Hybrid bond with securities-like features		3,135,222		—		—			—		3,135,222
KB Special Purpose Acquisition Company No.21	Hybrid bond with securities-like features		—		1,490,000		—			1,469,063		2,959,063
KB Special Purpose Acquisition Company No.22	Hybrid bond with securities-like features		—		990,000		—			982,075		1,972,075
KB Special Purpose Acquisition Company No.23	Hybrid bond with securities-like features		—		1,495,000		—			1,476,465		2,971,465
KB Special Purpose Acquisition Company No.24	Hybrid bond with securities-like features		—		6,975,000		—			—		6,975,000
Others
Kookmin Bank	Deposits 2		537,191,788		—		—			330,346,210		867,537,998
	Borrowings		124,560,300		885,820,653		(868,303,453	)		—		142,077,500
The Group
Employees	Loans to employees		14,940,376		2,324,900		(5,624,383	)		—		11,640,893

1	These companies are not related parties of the Group as at December 31, 2022.

2	Transactions such as settlement payments for business reasons and deposits that can be deposited and withdrawn at any time between related parties are disclosed in net amounts.

In addition to the above, the balance of hybrid securities held by KB Financial Group Inc., issued by the Group as at December 31, 2023, is 530,000 million (2022 : 430,000 million), and the related dividend payment for the year ended December 31, 2023 is 20,763 million (2022 : 4,300 million).

And the dividend paid by the Group to KB Financial Group Inc., the parent company, through disposal of retained earnings in 2022 during the year ended December 31, 2023 is 100,000 million (2022 : 400,000 million).

Meanwhile, the above financial transactions do not include details of increases or decreases in deposits that occur for business reasons between related parties.

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KB SECURITIES CO., LTD. and Subsidiaries

Notes to the Consolidated Financial Statements

December 31, 2023 and 2022

(d) Other transactions with related parties for the years ended December 31, 2023 and 2022, are as follows:


(In thousands of Korean won)	2023
	Contribution		Collection and others
Associates
KB Special Purpose Acquisition Company No.23 1		—		5,000
KB Special Purpose Acquisition Company No.24 1		—		25,000
KB Special Purpose Acquisition Company No.25		5,000		—
KB Special Purpose Acquisition Company No.26		5,000		—
KB Special Purpose Acquisition Company No.27		5,000		—
KBTS Technology Venture Private Equity Fund		—		192,000
KB-Brain KOSDAQ Scale-Up Fund		—		4,950,000
KB-Stonebridge Secondary Private Equity Fund		—		1,989,771
KB-UTC Inno-Tech Venture Fund		—		750,000
KB-NAU Special Situation Corporate Restructuring Private Equity Fund		900,000		1,116,868
December & Company Inc. 1		—		1,502,531
KB-KTB Technology Venture Fund		2,000,000		—
KB Digital Platform Fund		8,500,000		—
KB-SOLIDUS Healthcare Investment Fund 1		1,283,333		—
KB-BridgePole Venture Investment Fund		—		714,000
SKS-VLP Fund No.2 1		—		1,155,560
KB-NP Green ESG New Technology Venture Capital Fund		4,440,000		—
PEBBLES-MW M·C·E New Technology Investment Fund 1st 1		—		2,000,000
LAKEWOOD-AVES Fund No.1		2,000,000		—
MW-Pyco NewWave New Technology Investment Fund 4th		2,000,000		—
KB-SUSUNG 1st Investment Fund		2,000,000		—
Friend 55 New Technology Business Investment Fund		1,200,000		—
Bitgoeul Cheomdan Green 1st Co., Ltd.		190,000		—
DSIP-Pharos Bioenergy Fund		4,000,000		—
Shinhan-Eco Venture Fund 2nd		1,825,000		—
Leading H2O Fund 1		1,500,000		—
2023 JB Newtech No.2 Fund		1,800,000		—
U-KB Credit No.1 Private Equity		4,813,953		—
KB-BridgePole Venture Investment Fund #2		1,500,000		—
Sirius Silicon Valley I New Technology Fund		500,000		—
Others
KB Multi Alpha Plus Private Fund 1		—		9,660,781
KB BMO Senior Loan Private Special Asset Fund 2		—		3,715,625
KB Overseas Investment Private Real Estate Investment Trust No. 22		5,267,782		878,418
KB Wisestar Private Real Estate Fund Investment Trust No. 1		—		63,331
KB New Deal Innovation Fund		3,200,000		—
Paramark KB Fund I		1,114,000		—
KB Secondary Plus Fund		1,181,000		—
KB Prime Digital Platform Fund		1,575,000		—
KB Scale-up Fund No.2		1,500,000		—
KB Global Platform Fund No.2		3,600,000		—
KB KBSTAR Nov 2023 Term Credit ETF		511,450		11,045,000
KB North America Jefferies Private Special Asset Investment Trust No.1		6,660,127		134,601
KB North America Jefferies Private Special Asset Investment Trust No.2		363,500		14,919
KB KBSTAR Money Market Active ETF		282,331,192		51,217,601
KB Corporation Dollar MMF(USD)		26,440,000		—
KB Wise star General Real Estate Fund 22		101,400,000		3,972,650
Mirae Asset ESG Infrastructure General Investors Private Equity Fund No. 1		48		—

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KB SECURITIES CO., LTD. and Subsidiaries

Notes to the Consolidated Financial Statements

December 31, 2023 and 2022


KB BXC GREEN CREDIT Infra General Private Special Asset Fund 2	9,271	—
PT Bank KB Bukopin Tbk	3,175,200	—
REKSA DANA VALBURY STABLE GROWTH FUND	126,277	—

1	These companies are not related parties of the Group as at December 31, 2023.


(In thousands of Korean won)	2022
	Contribution		Collection and others
Associates
KB Special Purpose Acquisition Company No.17 1		—		500
KB Special Purpose Acquisition Company No.18 1		—		1,000
KB Special Purpose Acquisition Company No.19 1		—		1,000
KB Special Purpose Acquisition Company No.20 1		—		1,000
KB Special Purpose Acquisition Company No.21		10,000		—
KB Special Purpose Acquisition Company No.22		10,000		—
KB Special Purpose Acquisition Company No.23		5,000		—
KB Special Purpose Acquisition Company No.24		25,000		—
KB New Paradigm Agriculture Venture Fund		—		625,000
KB-KDBC New Technology Business Investment Fund		—		2,600,000
KBTS Technology Venture Private Equity Fund		—		1,296,000
KB-SJ Tourism Venture Fund		—		400,000
KB Shinjasanaubo Fund		—		132,000
KB-Brain KOSDAQ Scale-Up Fund		—		4,800,000
KB SPROTT Renewable Private Equity Fund I		2,499,360		—
KB-Stonebridge Secondary Private Equity Fund		1,248,439		631,500
KB-NAU Special Situation Corporate Restructuring Private Equity Fund		660,000		2,352,793
Project Vanilla Co., Ltd. 1		—		525,344
KB Bio Private Equity Fund III Ltd. 1		—		10,000,000
KB-KTB Technology Venture Fund		4,000,000		—
KB Digital Platform Fund		5,000,000		—
KB-SOLIDUS Healthcare Investment Fund		1,000,000		—
KB-GeneN Medical Venture Fund 1		2,000,000		—
KB-BridgePole Venture Investment Fund		850,000		—
KB-Kyobo New Mobility Power Fund		3,000,000		—
JS Private Equity Fund III		1,700,000		—
Mirae Asset Mobility Investment Fund I		2,000,000		—
KB-FT 1st Green Growth Investment Fund		2,000,000		—
THE CHAEUL FUND NO.1 2		1,000,000		—
POSITIVE Sobujang Venture Fund No.1		2,000,000		—
KB-NP Green ESG New Technology Venture Capital Fund		3,740,000		—
Hisstory 2022 Fintech Fund		2,000,000		—
PEBBLES-MW M·C·E New Technology Investment Fund 1st		2,000,000		—
KB Star REIT		134,772,782		—
KB Bio Private Equity Investment Fund IV		7,500,000		—
Nextrade Co., Ltd.		9,700,000		—
Apollo REIT PropCo LLC 1		19,968,049		19,968,049
Others
Star-Lord General Investors Private Real Estate Investment Company No.10		20,000,000		—
KB NA Compass Energy Private Special Asset Fund 1		606,975		21,823,276
Meritz Private Real Estate Fund 9-2		1,486		5,306
KB Global Core Bond Securities Master Fund(Bond)		—		5,000,000
KB Global Platform Fund		3,200,000		2,460,000
KB Wisestar Private Real Estate Fund Investment Trust No. 1		—		1,749,177
KB KBSTAR 30-Years Treasurybond Enhanced ETF 1		—		691,351

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Notes to the Consolidated Financial Statements

December 31, 2023 and 2022


KB Aircraft Loan Private Special Asset Fund Investment Trust No. 1	—	32,265,511
KB New Deal Innovation Fund	4,800,000	—
KB Development Blind General Private Real Estate Investment Trust No.2	3,240,000	—
KB Prime Digital Platform Fund	900,000	—
KB Secondary Plus Fund	1,180,000	—
Paramark KB Fund I	4,148,023	772,023
KB Scale-up Fund No.2	1,500,000	—
KB KBSTAR Nov 2023 Term Credit ETF	14,862,445	4,905,170

1	These companies are not related parties of the Group as at December 31, 2022.

2	Changed company name from SKS IB NEW M&T FUND NO.1 to THE CHAEUL FUND NO.1 for the year ended December 31, 2022.

(e) Details of guarantees and assets pledged as collateral to related parties as at December 31, 2023 and 2022 are as follows:

- Guarantees


	Limit amount
(in thousands of Korean won)	Details		2023		2022
KB Star Galaxy Towers REIT		Funding replenishment agreement B		40,000,000		40,000,000

- Assets pledged as collateral


(in thousands of Korean won)	Details of assets pledged	2023				2022
	Details of assets pledged	Carrying amount		Collateralized amount		Carrying amount		Collateralized amount
Other related parties
Kookmin Bank	Time deposits and others		173,000,000		167,000,000		173,000,000		167,000,000
	Bonds denominated in Korean won		65,755,400		71,244,339		16,541,459		20,000,000
	Investment Properties		202,633,791		150,600,000		—		—
KB Insurance Co., Ltd	Bonds denominated in Korean won		40,354,299		48,000,000		—		—

- Assets received as collateral


(in thousands of Korean won)	Details of assets pledged	2023		2022
		Collateralized amount		Collateralized amount
Other related parties
Kookmin Bank	Bonds denominated in Korean won		77,000,000		62,000,000
KB Insurance Co., Ltd	Bonds denominated in Korean won		10,000,000		—

As at December 31, 2023, the Group has 157,512 million (2022 : 140,000 million) of credit line such as loan agreement. . And the Group has entered into a CLS (Foreign Exchange Simultaneous Settlement) third-party service agreement with Kookmin Bank Co., Ltd., and according to the related agreement, it can receive intraday liquidity of USD 500 million on the condition of repayment on the settlement date.

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Notes to the Consolidated Financial Statements

December 31, 2023 and 2022

(f) Details of unused loan commitments provided to the related parties as at December 31, 2023 and 2022, are as follows:


(In thousands of Korean won)	Details	Amounts
		2023		2022
KB Wisestar Private Real Estate Fund Investment Trust No. 1	Purchase agreements of securities		19,000		19,000
KB Global Infra Private Special Asset Fund No.5	Purchase agreements of securities		4,999,773		4,999,773
KB Global Infra Private Special Asset Fund No.6	Purchase agreements of securities		4,999,773		4,999,773
KB-NAU Special Situation Corporate Restructuring Private Equity Fund	Purchase agreements of securities		6,744,000		7,644,000
KB BMO Senior Loan Private Special Asset Fund 2	Purchase agreements of securities		19,837		19,497
KB-KTB Technology Venture Fund	Purchase agreements of securities		2,000,000		4,000,000
Paramark KB Fund I	Purchase agreements of securities		4,830,000		5,944,000
KB-SOLIDUS Healthcare Investment Fund	Purchase agreements of securities		2,616,667		3,900,000
KB Digital Platform Fund	Purchase agreements of securities		32,000,000		40,500,000
KB Scale-up Fund No.2	Purchase agreements of securities		7,000,000		8,500,000
KB-NP Green ESG New Technology Venture Capital Fund	Purchase agreements of securities		11,820,000		16,260,000
KB Prime Digital Platform Fund	Purchase agreements of securities		2,025,000		3,600,000
Shinhan-Eco Venture Fund 2nd	Purchase agreements of securities		675,000		—
U-KB Credit No.1 Private Equity	Purchase agreements of securities		25,186,047		—
KB Overseas Investment Private Real Estate Investment Trust No. 22	Purchase agreements of securities		8,547,444		—
Mirae Asset ESG Infrastructure General Investors Private Equity Fund No. 1	Purchase agreements of securities		999,952		—
KB Global Platform Fund No.2	Purchase agreements of securities		11,400,000		—
KB North America Jefferies Private Special Asset Investment Trust No.1	Purchase agreements of securities		5,628,002		—
KB North America Jefferies Private Special Asset Investment Trust No.2	Purchase agreements of securities		296,211		—
KB New Deal Innovation Fund	Purchase agreements of securities		—		3,200,000
KB Secondary Plus Fund	Purchase agreements of securities		—		1,181,000

The Group received credit card commitment amounting to 21,000 million( 21,000 million as at December 31, 2022) from KB Kookmin Card Co., Ltd. as at December 31, 2023.

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KB SECURITIES CO., LTD. and Subsidiaries

Notes to the Consolidated Financial Statements

December 31, 2023 and 2022

(g) Debt instruments purchased or sold via the Group by the related party for the years ended December 31, 2023 and 2022, are as follows.


	2023
(in thousands of Korean won)	Sale		Purchase 1
KB Financial Group Inc.		100,000,000		10,000,000
Kookmin Bank		8,337,914,587		6,100,690,240
KB Insurance Co., Ltd		1,152,899,667		143,965,590
KB Life Insurance Co., Ltd.(formerly, Prudential Life Insurance Co., Ltd.) 2		306,016,495		194,318,211
KB Capital Co., Ltd.		—		160,000,000
KB Kookmin Card Co., Ltd.		—		140,000,000

1	Debt instruments issued by the related parties and purchased by the Group are included.

2	Changed company name from Prudential Life Insurance Co., Ltd. to KB Life Insurance Co., Ltd. during the year ended December 31, 2022.


	2022
(in thousands of Korean won)	Sale		Purchase 1
KB Financial Group Inc.		430,000,000		—
Kookmin Bank		7,341,903,732		3,791,777,742
KB Life Insurance Co., Ltd. 2		92,619,359		11,922,239
KB Insurance Co., Ltd		794,858,152		362,105,311
KB Life Insurance Co., Ltd. (former Prudential Life Insurance Co., Ltd.) 3		65,611,000		325,130,900
KB Kookmin Card Co., Ltd.		—		70,000,000
KB Capital Co., Ltd.		—		70,000,000

1	Debt instruments issued by the related parties and purchased by the Group are included.

2	This company disappeared through a merger with Prudential Life Insurance Co., Ltd. during the year ended December 31, 2022.

3	This company changed its name from Prudential Life Insurance Co., Ltd. to KB Life Insurance Co., Ltd. during the year ended December 31, 2022.

(h) The key management includes registered or unregistered directors, members of BOD, CFO, person in charge for internal audit and their compensation for the years ended December 31, 2023 and 2022, are as follows.


(in thousands of Korean won)	2023		2022
Salaries		18,416,550		19,619,299
Post-employment benefits		735,519		654,295
Share-based payment		12,581,278		10,499,614

		31,733,347		30,773,208

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KB SECURITIES CO., LTD. and Subsidiaries

Notes to the Consolidated Financial Statements

December 31, 2023 and 2022

43. Supplemental Cash Flow Information

Adjustments for non-cash items of cash flows from operating activities for the years ended December 31, 2023 and 2022, are as follows.


(in thousands of Korean won)	2023			2022
Interest income		(1,763,585,063	)		(1,160,030,186	)
Interest expenses		1,148,794,250			618,109,328
Dividend income and distribution income		(67,110,154	)		(58,263,080	)
Tax expenses		104,733,621			67,499,191
Gains on valuation of financial assets (liabilities) required to be mandatorily measured at FVTPL		(766,492,411	)		(333,119,842	)
Losses on valuation of financial assets (liabilities) required to be mandatorily measured at FVTPL		313,763,388			831,544,707
Gains on valuation of financial assets (liabilities) designated at FVTPL		(453,463,878	)		(1,034,347,105	)
Losses on valuation of financial assets (liabilities) designated at FVTPL		364,302,519			101,117,268
Gains on valuation of derivative financial assets (liabilities)		(1,876,903,032	)		(3,768,918,242	)
Losses on valuation of derivative financial assets (liabilities)		2,088,064,125			3,949,042,388
Gains or losses on disposal of financial assets at FVOCI		(184,425	)		16,397,562
Provision for allowances for loan losses		138,392,268			29,170,136
Depreciation		60,130,973			60,392,226
Amortization		40,004,759			27,876,572
Foreign currency translations		(16,005,233	)		40,092,662
Others		211,296,719			40,749,617

		(474,261,574	)		(572,686,798	)

Changes in operating assets and liabilities of cash flows for the years ended December 31, 2023 and 2022, are as follows.


(in thousands of Korean won)	2023			2022
Deposits in financial institutions		493,905,437			(591,602,391	)
Financial assets required to be mandatorily measured at FVTPL		(5,993,243,435	)		4,070,185,916
Derivative financial instruments		(127,464,003	)		376,528,219
Loans measured at amortised cost		(1,883,192,001	)		(2,277,528,256	)
Other assets		(1,275,581,520	)		861,810,325
Deposit liabilities		271,682,397			(1,627,275,300	)
Financial liabilities required to be mandatorily measured at FVTPL		658,321,625			(649,762,362	)
Financial liabilities designated at FVTPL		(2,095,492,105	)		1,913,770,458
Defined benefit obligation		(21,490,228	)		(23,185,907	)
Securities sold under repurchase agreements		1,401,255,684			(2,784,278,687	)
Other liabilities		1,482,531,066			(1,103,619,065	)

		(7,088,767,083	)		(1,834,957,050	)

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KB SECURITIES CO., LTD. and Subsidiaries

Notes to the Consolidated Financial Statements

December 31, 2023 and 2022

Changes in liabilities of cash flows from financing activities for the years ended December 31, 2023 and 2022, are as follows.


	2023
(in thousands of Korean won)	Borrowings			Debentures		Guarantee deposits		Lease liabilities			Others			Total
Beginning balance (net)		17,465,699,185			1,876,106,274		8,894,337		125,593,239			167,175,011			19,643,468,046
Cash Transactions		5,258,215,771			674,244,571		3,001,964		(35,301,268	)		6,473,096			5,906,634,134
Exchanges in foreign currency		19,056,592			3,440,125		53,802		77,909			—			22,628,428
Changes in consolidation scope		(339,338,546	)		—		—		—			(105,727,887	)		(445,066,433	)
Non-cash transactions		101,404,218			2,510,963		4,305,655		17,725,866			24,197,245			150,143,947

Ending balance(net)		22,505,037,220			2,556,301,933		16,255,758		108,095,746			92,117,465			25,277,808,122


	2022
(in thousands of Korean won)	Borrowings			Debentures			Guarantee deposits			Lease liabilities			Others			Total
Beginning balance (net)		15,252,419,029			2,423,653,655			26,518,264			127,992,813			228,717,913			18,059,301,674
Cash Transactions		2,309,764,192			(545,885,919	)		497,469			(30,267,166	)		(28,794,866	)		1,705,313,710
Exchanges in foreign currency		(26,690	)		18,701,008			(33,330	)		(279,624	)		—			18,361,364
Changes in consolidation scope		454,724,863			—			29,956			141,239			—			454,896,058
Non-cash transactions		(551,182,209	)		(20,362,470	)		(18,118,022	)		28,005,977			(32,748,036	)		(594,404,760	)

Ending balance(net)		17,465,699,185			1,876,106,274			8,894,337			125,593,239			167,175,011			19,643,468,046

44. Non-cash Transactions

Significant non-cash transactions from investing activities and financing activities which are not included in consolidated statements of cash flows for the years ended December 31, 2023 and 2022, are as follows:


(in thousands of Korean won)	2023		2022
Increase due to gains on valuation of financial assets at FVOCI		75,151,108		19,904,095

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KB SECURITIES CO., LTD. and Subsidiaries

Notes to the Consolidated Financial Statements

December 31, 2023 and 2022

45. Interests in Unconsolidated Structured Entities

Information about interests in unconsolidated structured entities, which the Group does not have control over, including the nature, purpose and activities of the structured entity and how the structured entity is financed, is as follows:


Nature	Purpose	Activities	Method of financing
Asset-backed securitization	• Early cash generation through transfer of securitization assets • Fees earned as services to SPC, such as providing lines of credit and ABCP purchase commitments	• Fulfillment of Asset-backed securitization plan • Purchase and transfer of securitization assets • Issuance and repayment of ABS and ABCP	• Issuance of ABS and ABCP based on securitization assets
Project financing	• Granting PF loans to SOC and real estate • Granting loans to ships/ aircrafts SPC	• Construction of SOC and real estate • Building ships/ construction and purchase of aircrafts	• Loan commitments through Credit Line, providing lines of credit and investment • agreements
Trust	Management of financial trusts; • Development trust • General unspecified money trust • Principal non-guaranteed trust	• Development, management, and disposal of trusted real estate assets • Payment of trust fees and allocation of trust profits.	• Sales of financial trusts
Investment funds	• Investment in beneficiary certificates • Investment in PEF and partnerships	• Management of fund assets • Payment of fund fees and allocation of fund profits	• Sales of beneficiary certificate instruments • Investment of managing partners and limited partners

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KB SECURITIES CO., LTD. and Subsidiaries

Notes to the Consolidated Financial Statements

December 31, 2023 and 2022

Details of the size of the interest in unconsolidated structured entities and the nature of risks related are as follows:


	2023
(in thousands of Korean won)	Asset-backed securitization		Investment fund		Others		Total
Total assets of unconsolidated structured entities		18,593,213,479		32,594,673,594		2,870,320,872		54,058,207,945
Assets recognized in the consolidated financial statements of the Group
Loans		1,390,116,859		27,480,000		510,985,485		1,928,582,344
Securities		4,927,704,334		2,056,094,372		4,390,000		6,988,188,706
Investments in associates		—		293,328,998		—		293,328,998
Derivative financial assets		—		882,749		—		882,749
Other assets		5,984,009		111,340		22,937		6,118,286

		6,323,805,202		2,377,897,459		515,398,422		9,217,101,083

Liabilities recognized in the consolidated financial statements of the Group
Derivatives financial liabilities		—		287,751		—		287,751
Other liabilities		1,098,119		—		257,638		1,355,757

		1,098,119		287,751		257,638		1,643,508

Maximum exposure to loss
Holding assets		6,323,805,202		2,377,897,459		515,398,422		9,217,101,083
Payment guarantee and loan commitments		834,204,937		399,767,434		—		1,233,972,371

		7,158,010,139		2,777,664,893		515,398,422		10,451,073,454

The way that the maximum exposure to loss is determined		Amount of credit offerings and purchase agreement		Amount of investment commitment		Amount of investment commitment


	2022
(in thousands of Korean won)	Asset-backed securitization		Investment fund		Others		Total
Total assets of unconsolidated structured entities		16,840,274,262		26,227,955,016		13,832,783,457		56,901,012,735
Assets recognized in the consolidated financial statements of the Group
Loans		344,336,080		—		1,223,588,027		1,567,924,107
Securities		3,547,286,127		1,714,215,712		3,958,500		5,265,460,339
Investments in associates		—		259,437,774		—		259,437,774
Other assets		1,169,590		—		1,315		1,170,905

		3,892,791,797		1,973,653,486		1,227,547,842		7,093,993,125

Liabilities recognized in the consolidated financial statements of the Group
Derivatives financial assets		697,664		2,102,146		—		2,799,810
Other liabilities		51,883,899		—		238,770		52,122,669

		52,581,563		2,102,146		238,770		54,922,479

Maximum exposure to loss
Holding assets		3,892,791,796		1,973,653,486		1,227,547,842		7,093,993,124
Payment guarantee and loan commitments		358,038,047		378,815,262		—		736,853,309

		4,250,829,843		2,352,468,748		1,227,547,842		7,830,846,433

The way that the maximum exposure to loss is determined		Amount of credit offerings and purchase agreement		Amount of investment commitment		Amount of investment commitment

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KB SECURITIES CO., LTD. and Subsidiaries

Notes to the Consolidated Financial Statements

December 31, 2023 and 2022

46. Business Combination

As of February 14, 2022, the Group acquired 65.0% shares in PT. KB Valbury Sekurita for 57,222 million in cash and incorporated it as a subsidiary.

The main reason for the business combination is to diversify the global business by entering Indonesian capital market through takeover, and to strengthen competitiveness in the global sector through business with other overseas affiliates and maximization of operational synergies.

Accounting treatment for acquisition of shares related to this business combination is as follows:


(In thousands of Korean won)
Consideration transferred			57,221,996

Assets acquired
Cash and cash equivalents			39,924,724
Deposits			1,558,581
Financial assets at fair value through profit or loss			1,712,718
Loans measured at amortised cost			30,509,425
Property and equipment			8,440,290
Investment properties			2,618,619
Current tax assets			68,213
Deferred tax assets			726,818
Other financial assets			28,546,988
Other assets			165,379

			114,271,755

Liabilities assumed
Borrowings			14,286,341
Net defined benefit liabilities			2,634,640
Current tax liabilities			1,380,012
Other financial liabilities			24,497,141
Other liabilities			140,575

			42,938,709

Net assets at fair value as identifiable			71,333,046
Non-controlling interest			25,180,721

Goodwill			11,069,671

The Group reflected net income of PT. KB Valbury Sekuritas as of 5,100 million after the acquisition date in the consolidated statement of comprehensive income. Net cash outflow related to this business combination was 17,297 million.

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Exhibit 99.2

KB SECURITIES CO., LTD.

Separate Financial Statements

December 31, 2023 and 2022

(With Independent Auditor’s Report Thereon)

Table of Contents


	Page(s)

Independent Auditor’s Report		1~3

Separate Financial Statements

Separate Statements of Financial Position		4

Separate Statements of Profit or Loss		5

Separate Statements of Comprehensive Income		6

Separate Statements of Changes in Equity		7

Separate Statements of Cash Flows		8

Notes to the Separate Financial Statements		9~137

Report on Independent Auditor’s Review of Internal Control over Financial Reporting		138

Report on the Effectiveness of Internal Control over Financial Reporting		139

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Independent Auditor’s Report

(English Translation of a Report Originally Issued in Korean)

To the Board of Directors and Shareholders of KB Securities Co., Ltd.

Opinion

We have audited the accompanying separate financial statements of KB Securities Co., Ltd. (the Company), which comprise the separate statement of financial position as at December 31, 2023, and the separate statement of profit or loss, separate statement of comprehensive income, separate statement of changes in equity and separate statement of cash flows for the year then ended, and notes to the separate financial statements, including material accounting policy information.

In our opinion, the accompanying separate financial statements present fairly, in all material respects, the separate financial position of KB Securities Co., Ltd. as at December 31, 2023, and its separate financial performance and its separate cash flows for the year then ended in accordance with International Financial Reporting Standards as adopted by the Republic of Korea (Korean IFRS).

Basis for Opinion

We conducted our audit in accordance with Korean Standards on Auditing. Our responsibilities under those standards are further described in the Auditor’s Responsibilities for the Audit of the Financial Statements section of our report. We are independent of the Company in accordance with the ethical requirements of the Republic of Korea that are relevant to our audit of the financial statements and we have fulfilled our other ethical responsibilities in accordance with the ethical requirements. We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our audit opinion.

Other Matters

The separate financial statements of the Company for the year ended December 31, 2022, were audited by KPMG Samjong Accounting Corporation who expressed an unqualified opinion on those statements on March 7, 2023.

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

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Responsibilities of Management and Those Charged with Governance for the Financial Statements

Management is responsible for the preparation and fair presentation of the separate financial statements in accordance with Korean IFRS, and for such internal control as management determines is necessary to enable the preparation of financial statements that are free from material misstatement, whether due to fraud or error.

In preparing the financial statements, management is responsible for assessing the Company’s ability to continue as a going concern, disclosing, as applicable, matters related to going concern and using the going concern basis of accounting unless management either intends to liquidate the Company or to cease operations.

Those charged with governance are responsible for overseeing the Company’s financial reporting process.

Auditor’s Responsibilities for the Audit of the Financial Statements

Our objectives are to obtain reasonable assurance about whether the financial statements as a whole are free from material misstatement, whether due to fraud or error, and to issue an auditor’s report that includes our opinion. Reasonable assurance is a high level of assurance, but is not a guarantee that an audit conducted in accordance with Korean Standards on Auditing will always detect a material misstatement when it exists. Misstatements can arise from fraud or error and are considered material if, individually or in the aggregate, they could reasonably be expected to influence the economic decisions of users taken on the basis of these financial statements.

As part of an audit in accordance with Korean Standards on Auditing, we exercise professional judgment and maintain professional skepticism throughout the audit. We also:

•

Identify and assess the risks of material misstatement of the financial statements, whether due to fraud or error, design and perform audit procedures responsive to those risks, and obtain audit evidence that is sufficient and appropriate to provide a basis for our opinion. The risk of not detecting a material misstatement resulting from fraud is higher than for one resulting from error, as fraud may involve collusion, forgery, intentional omissions, misrepresentations, or the override of internal control.

•

Evaluate the appropriateness of accounting policies used and the reasonableness of accounting estimates and related disclosures made by management.

•

Conclude on the appropriateness of management’s use of the going concern basis of accounting and, based on the audit evidence obtained, whether a material uncertainty exists related to events or conditions that may cast significant doubt on the Company’s ability to continue as a going concern. If we conclude that a material uncertainty exists, we are required to draw attention in our auditor’s report to the related disclosures in the financial statements or, if such disclosures are inadequate, to modify our opinion. Our conclusions are based on the audit evidence obtained up to the date of our auditor’s report. However, future events or conditions may cause the Company to cease to continue as a going concern.

•

Evaluate the overall presentation, structure and content of the financial statements, including the disclosures, and whether the financial statements represent the underlying transactions and events in a manner that achieves fair presentation.

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/s/ Samil PricewaterhouseCoopers

Seoul, Korea

March 6, 2024

This report is effective as of March 6, 2024, the audit report date. Certain subsequent events or circumstances, which may occur between the audit report date and the time of reading this report, could have a material impact on the accompanying separate financial statements and notes thereto. Accordingly, the readers of the audit report should understand that there is a possibility that the above audit report may have to be revised to reflect the impact of such subsequent events or circumstances, if any.

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KB SECURITIES Co., Ltd.

Separate Statements of Financial Position

December 31, 2023 and 2022


(in Korean won)	Notes		2023		2022
Assets
Cash and deposits		5,36,37,38		2,324,715,993,258		4,028,288,407,282
Financial assets at fair value through profit or loss		6,36,37,38		35,529,339,671,327		28,995,718,417,735
Derivative financial assets		7,36,37,38,39		1,135,196,743,826		1,701,970,055,618
Financial assets at fair value through other comprehensive income		8,36,37,38		5,130,404,163,553		4,798,845,458,840
Investments in subsidiaries		9		829,678,711,020		962,256,250,447
Investments in associates		9		202,351,826,954		200,226,065,772
Financial assets measured at amortised cost		10,36,37,38,39		7,973,604,805,486		6,566,785,893,434
Property and equipment		11,40		233,444,500,392		253,806,249,717
Investment properties		12		14,104,122,833		14,659,854,297
Intangible assets		13		245,272,071,250		185,490,560,652
Other financial assets		14,36,37,38,39		4,076,458,711,184		2,698,990,294,779
Other assets		15		133,916,481,601		243,677,135,482

Total assets				57,828,487,802,684		50,650,714,644,055

Liabilities
Deposit liabilities		16,36,37,38		7,133,908,105,311		6,819,371,624,902
Financial liabilities at fair value through profit or loss		6,36,37,38,39		10,835,881,099,625		12,171,579,477,522
Derivative financial liabilities		7,36,37,38,39		1,812,012,245,454		2,318,063,711,035
Borrowings		17,36,37,38,39		27,393,887,529,785		20,575,667,240,927
Net defined benefit liabilities		18		61,656,550,036		54,817,226,956
Deferred tax liabilities		35		17,390,830,857		73,845,106,780
Provisions		19,45		212,928,230,162		150,934,451,093
Other financial liabilities		20,36,37,38,39,40		3,867,868,006,146		2,243,572,915,000
Other liabilities		21		335,742,937,175		427,324,355,976

Total liabilities				51,671,275,534,551		44,835,176,110,191

Equity
Share capital		22		1,493,102,120,000		1,493,102,120,000
Hybrid securities		23		626,093,392,000		506,130,312,000
Other paid-in capital		24		1,479,110,085,557		1,479,110,085,557
Retained earnings		25		2,261,273,077,370		2,038,072,084,071
Other components of equity		26		297,633,593,206		299,123,932,236

Total equity				6,157,212,268,133		5,815,538,533,864

Total liabilities and equity				57,828,487,802,684		50,650,714,644,055

The above separate statements of financial position should be read in conjunction with the accompanying notes Separate Statements of Profit or Loss

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KB SECURITIES Co., Ltd.

Years Ended December 31, 2023 and 2022


(in Korean won)	Notes		2023		2022
Operating income
Fee and commission income		27		941,083,970,800		921,810,522,457
Gain on valuation and disposal of financial instruments		28		7,698,305,925,980		10,624,381,090,948
Interest income		29		1,537,708,874,751		1,013,459,676,836
Interest income from financial instruments at FVTPL				807,651,309,007		539,707,432,644
Interest income in applying of effective interest rate				730,057,565,744		473,752,244,192
Gain on valuation and disposal of financial assets measured at amortised costs		30		6,954,980,681		3,890,158,961
Gain on foreign currency transactions		31		904,841,198,573		1,256,489,183,394
Other operating income		32		151,312,724,947		156,781,049,046

				11,240,207,675,732		13,976,811,681,642

Operating expenses
Fee and commission expense		27		210,503,255,070		166,378,277,250
Loss on valuation and disposal of financial instruments		28		7,448,603,412,691		10,997,065,263,414
Interest expense		29		992,875,403,373		501,613,636,678
Loss on valuation and disposal of financial assets measured at amortised cost		30		60,244,149,651		14,818,638,031
Loss on foreign currency transactions		31		871,907,643,704		1,256,540,975,538
Selling and administrative expenses		33		854,786,429,423		769,850,286,492
Other operating expenses		32		147,751,375,518		53,748,010,547

				10,586,671,669,430		13,760,015,087,950

Operating profit				653,536,006,302		216,796,593,692
Non-operating income		34		55,610,591,341		93,582,812,809
Non-operating expenses		34		267,692,318,828		79,836,928,036

Profit before income tax				441,454,278,815		230,542,478,465
Income tax expense		35		89,090,738,160		60,247,522,429

Profit for the year				352,363,540,655		170,294,956,036

The above separate statements of profit or loss should be read in conjunction with the accompanying notes Separate Statements of Comprehensive Income

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KB SECURITIES Co., Ltd.

Years Ended December 31, 2023 and 2022


(in Korean won)	Notes		2023			2022
Profit for the year				352,363,540,655			170,294,956,036

Other comprehensive income(loss)
Items that will not be reclassified to profit or loss
Net gains on valuation of equity instruments at fair value through other comprehensive income		8,26		25,351,276,846			27,415,825,649
Fair value changes on financial liabilities designated at fair value due to own credit risk		6,26		(52,863,029,391	)		38,855,084,533
Remeasurements of the net defined benefit liabilities		18,26		(5,014,169,509	)		2,744,359,393
Revaluation of property and equipment				84,435,863			35,572,043,723
Items that may be subsequently reclassified to profit or loss
Net gains(losses) on valuation of debt instrument at fair value through other comprehensive income		8,26		30,951,147,161			(10,149,158,628	)

Other comprehensive income for the year, net of tax				(1,490,339,030	)		94,438,154,670

Total comprehensive income for the year				350,873,201,625			264,733,110,706

The above separate statements of comprehensive income should be read in conjunction with the accompanying notes Separate Statements of Changes in Equity

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KB SECURITIES Co., Ltd.

Years Ended December 31, 2023 and 2022


					Other paid in capital
	Share Capital		Hybrid Securities		Share Premium		Other Equity		Retained Earnings			Other Components of Equity			Total Equity
Balance at January 1, 2022		1,493,102,120,000		—		1,142,353,750,001		336,756,335,556		2,270,994,816,373			204,947,096,665			5,448,154,118,595
Issuance of hybrid securities		—		506,130,312,000		—		—		—			—			506,130,312,000
Dividends of hybrid securities		—		—		—		—		(3,479,007,437	)		—			(3,479,007,437	)
Dividends		—		—		—		—		(400,000,000,000	)		—			(400,000,000,000	)
Revaluation of property and equipment		—		—		—		—		261,319,099			(261,319,099	)		—
Total comprehensive income
Profit for the year		—		—		—		—		170,294,956,036			—			170,294,956,036
Other comprehensive income		—		—		—		—		—			94,438,154,670			94,438,154,670
Balance at December 31, 2022		1,493,102,120,000		506,130,312,000		1,142,353,750,001		336,756,335,556		2,038,072,084,071			299,123,932,236			5,815,538,533,864

Balance at January 1, 2023		1,493,102,120,000		506,130,312,000		1,142,353,750,001		336,756,335,556		2,038,072,084,071			299,123,932,236			5,815,538,533,864

Issuance of hybrid securities		—		119,963,080,000		—		—		—			—			119,963,080,000
Dividends of hybrid securities		—		—		—		—		(29,162,547,356	)		—			(29,162,547,356	)
Dividends		—		—		—		—		(100,000,000,000	)		—			(100,000,000,000	)
Total comprehensive income
Profit for the year		—		—		—		—		352,363,540,655			—			352,363,540,655
Other comprehensive income		—		—		—		—		—			(1,490,339,030	)		(1,490,339,030	)

Balance at December 31, 2023		1,493,102,120,000		626,093,392,000		1,142,353,750,001		336,756,335,556		2,261,273,077,370			297,633,593,206			6,157,212,268,133

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

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KB SECURITIES Co., Ltd.

Separate Statements of Cash Flows

Years Ended December 31, 2023 and 2022


(in Korean won)	Notes		2023			2022
Cash flows from operating activities
Cash generated from operating activities
Profit for the year				352,363,540,655			170,294,956,036
Adjustment for non-cash items		43		(377,424,311,499	)		(547,044,387,464	)
Changes in operating assets and liabilities		43		(6,582,408,219,197	)		(382,676,653,008	)

				(6,607,468,990,041	)		(759,426,084,436	)
Interest received				1,442,167,452,931			1,103,052,980,271
Interest paid				(958,680,565,750	)		(448,730,584,509	)
Dividends received				74,040,765,112			47,165,956,301
Income taxes paid				(11,576,956,883	)		(204,006,008,899	)

Net cash used in operating activities				(6,061,518,294,631	)		(261,943,741,272	)

Cash flows from investing activities
Decrease in long-term deposit				500,000,000,000			498,550,000,000
Acquisition of financial assets at fair value through other comprehensive income				(5,622,658,475,953	)		(5,425,088,782,074	)
Disposal of financial assets at fair value through other comprehensive income				5,403,034,985,731			4,476,887,646,352
Acquisition of investments of subsidiaries and associates		9		(211,817,286,821	)		(488,146,088,553	)
Disposal of investment of subsidiaries and associates		9		125,766,349,941			474,612,192,592
Acquisition of property and equipment		11		(15,705,333,850	)		(22,279,332,929	)
Disposal of property and equipment		11		—			2,763,680,568
Acquisition of intangible assets		13		(83,213,525,185	)		(43,838,228,413	)
Disposal of intangible assets		13		2,020,704,075			1,019,665,000
Disposal of investment properties		12		—			2,986,319,434
Others				(77,219,607	)		(21,285,090,533	)

Net cash provided by (used in) investing activities				97,350,198,331			(543,818,018,556	)

Cash flows from financing activities
Increase in borrowings		43		4,754,831,923,405			1,867,511,733,452
Issuance of debentures		43		1,000,000,000,000			—
Repayment of debentures		43		(340,000,000,000	)		(520,000,000,000	)
Decrease in guarantee deposit liabilities		43		1,071,976,798			518,525,155
Dividends paid		25		(100,000,000,000	)		(400,000,000,000	)
Redemption of principal elements of lease payments		43		(31,662,680,098	)		(30,122,914,297	)
Issuance of hybrid securities		23		119,963,080,000			506,130,312,000
Dividends of hybrid securities		25		(25,167,500,000	)		(3,437,500,000	)
Increase in other liabilities		43		—			2,911,250,000

Net cash provided by financing activities				5,379,036,800,105			1,423,511,406,310

Effect of exchange rate changes on cash and cash equivalents				(569,201,171	)		(4,027,082,739	)

Net increase in cash and cash equivalents				(585,700,497,366	)		613,722,563,743
Cash and cash equivalents at the beginning of the year		5		1,027,870,362,068			414,147,798,325

Cash and cash equivalents at the end of the year		5		442,169,864,702			1,027,870,362,068

The above separate statements of cash flows should be read in conjunction with the accompanying notes Notes to the Separate Financial Statements

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KB SECURITIES Co., Ltd.

December 31, 2023 and 2022

1. The Company

KB Securities Co., Ltd. (the “Company” or “KB Securities”, formerly, Hyundai Securities Co., Ltd.) was established on June 1, 1962, under the name of Kookil Securities Co., Ltd. On June 5, 1986, the Company changed its name to “Hyundai Securities Co., Ltd.”. After several capital increases, the share capital of the Company amounts to 1,493,102 million as at December 31, 2023.

The Company became a wholly owned subsidiary of KB Financial Group Inc. on October 19, 2016, through a comprehensive exchange of shares. At the end of the reporting period, KB Financial Group Inc. owns 100% of ordinary shares of the Company.

Meanwhile, the Company merged with KB Investment & Securities Co., Ltd. (the “KB Investment & Securities”) on December 30, 2016 as a surviving company and changed its name to KB Securities Co., Ltd. As at December 31, 2023, the Company has 87 branch offices in Korea and one overseas branch office.

2. Material Accounting Policies

The material accounting policies applied in the preparation of these separate financial statements are set out below. These policies have been consistently applied to all the years presented, unless otherwise stated.

2.1 Basis of Preparation

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 condensed, restructured and translated into English from the Korean language financial statements.

Certain information attached to the Korean language financial statements, but not required for a fair presentation of the Company’s financial position, financial performance or cash flows, is not presented in the accompanying separate financial statements.

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

The separate financial statements have been prepared on the historical cost basis except for the following items:

•

Certain financial assets and liabilities (including derivatives instruments), certain classes of property, plant and equipment and investment properties measured at fair value

•

Assets held for sale measured at fair value less costs to sell, and

•

Defined benefit obligation and plan assets measured at fair value

The preparation of the separate financial statements requires the use of certain significant accounting estimates. Management also needs to exercise judgement in applying the Company’s accounting policies. The areas involving a higher degree of judgment or complexity, or areas where assumptions and estimates are significant to the separate financial statements are disclosed in Note 3.

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KB SECURITIES Co., Ltd.

Notes to the Separate Financial Statements

December 31, 2023 and 2022

2.2 Changes in Accounting Policy and Disclosures

2.2.1 New and amended standards adopted by the Company

The Company has applied the following amended standards for the first time for its annual reporting period commencing January 1, 2023.

•

Amendments to Korean IFRS No.1001 Presentation of Financial Statements – Accounting Policy Disclosure

•

Amendments to Korean IFRS No.1001 Presentation of Financial Statements—Disclosure of gains or losses on valuation of financial liabilities with exercise price adjustment conditions

•

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

•

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

•

Enactment of Korean IFRS No.1117 Insurance Contract

•

Amendments to Korean IFRS No. 1012 Income Taxes – Pillar 2 model rules for reforming international taxation

The amendments temporarily exempt the accounting treatment of deferred tax arising from the enforcement of laws reflecting the Pillar 2 model rules for reforming international taxation of multinational companies and require disclosure of related current corporate tax effects Analysing the impact of the amendments to this standard on the consolidated financial statements is in progress.

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KB SECURITIES Co., Ltd.

Notes to the Separate Financial Statements

December 31, 2023 and 2022

2.2.2 The following amended standards have been published that are not mandatory for December 31, 2023 reporting periods and have not been early adopted by the Company.

•

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

The amendments clarify that liabilities are classified as either current or non-current, depending on the substantive rights that exist at the end of the reporting period. Classification is unaffected by the likelihood that an entity will exercise the right to defer settlement of the liability or the management’s expectations thereof. Also, the settlement of liability includes the transfer of the entity’s own equity instruments; however, it would be excluded if an option to settle the liability by the transfer of the entity’s own equity instruments is recognized separately from the liability as an equity component of a compound financial instrument. In addition, agreements that the Company must comply with after the end of the reporting period do not affect the classification of the relevant liabilities at the end of the reporting period; further, if liabilities that must comply with agreements within 12 months after the reporting period are classified as non-current liabilities as of the end of the reporting period, the entity should disclose the risk that the liabilities may be repaid within 12 months after the reporting period. The amendments should be applied for annual reporting periods beginning on or after January 1, 2024, and earlier application is permitted. The Company does not expect that these amendments have a significant impact on the financial statements.

•

Amendments to Korean IFRS No.1007 Cash flow statements and Korean IFRS No.1107 Financial Instruments—Disclosure — Disclosure of information of supplier finance Arrangements

The amendments request that if the supplier finance arrangements are applied, information on the supplier finance arrangements must be disclosed so that users of financial statements can evaluate the impact of the supplier finance arrangements on the company’s liabilities, cash flow, and liquidity risk exposure. The amendments should be applied for annual reporting periods beginning on or after January 1, 2024, and earlier application is permitted. The Company does not expect that these amendments have a significant impact on the financial statements.

•

Amendments to Korean IFRS No.1116 Leases – Lease liabilities arising from sale and leaseback

The amendments clarify the method of subsequently measuring the lease liability arising from a sale and leaseback, the lease fee or modified lease fee is calculated in a manner that does not recognize the profit or loss related to the usage rights held by the seller-lessee. The amendments should be applied for annual reporting periods beginning on or after January 1, 2024, and earlier application is permitted. The Company does not expect that these amendments have a significant impact on the financial statements.

•

Amendments to Korean IFRS No. 1001 Presentation of Financial Statements –Disclosure of virtual assets

The amendments clarify additional disclosure requirements in the case of holding virtual assets or holding virtual assets on behalf of customers or issuing virtual assets. The amendments should be applied for annual reporting periods beginning on or after January 1, 2024, and earlier application is permitted. The Company does not expect that these amendments have a significant impact on the financial statements.

2.3 Foreign Currency Translation

(a) Functional and presentation currency

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

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KB SECURITIES Co., Ltd.

Notes to the Separate Financial Statements

December 31, 2023 and 2022

(b) Transactions and balances

2.4 Investments in Associates and Subsidiaries

The Company has prepared the separate financial statements in accordance with Korean IFRS No.1027, Separate Financial Statements. Investments in associates and subsidiaries are recognized at cost. The Company recognizes dividend income from subsidiaries or associates in profit or loss when its right to receive dividend is established.

2.5 Recognition and Measurement of Financial Instruments

2.5.1 Classification

The Company classifies financial assets as follows.

•

Those to be measured at fair value (through profit or loss or other comprehensive income)

•

Those to be measured at amortised cost

The classification depends on the Company’s business model for managing the financial assets and the contractual terms of the cash flows.

For financial assets measured at fair value, gains and losses will either be recorded in profit or loss or other comprehensive income. For investments in debt instruments, this will depend on the business model in which the investment is held. The Company reclassifies debt investments when, and only when its business model for managing those assets changes.

For investments in equity instruments that are not held for trading, this will depend on whether the Company has made an irrevocable election at the time of initial recognition to account for the equity investment at fair value through other comprehensive income. Changes in fair value of non-designated equity investment are recognized in profit or loss.

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KB SECURITIES Co., Ltd.

Notes to the Separate Financial Statements

December 31, 2023 and 2022

2.5.2 Measurement

At initial recognition, the Company measures a financial asset at its fair value plus, in the case of a financial asset not at fair value through profit or loss, transaction costs that are directly attributable to the acquisition of the financial asset. Transaction costs of financial assets carried at fair value through profit or loss are expensed in profit or loss.

Financial assets with embedded derivatives are considered in their entirety when determining whether their cash flows are solely payment of principal and interest.

2.5.2.1 Debt instruments

Subsequent measurement of debt instruments depends on the Company’s business model for managing the asset and the cash flow characteristics of the asset. The Company classifies its debt instruments into one of the following three measurement categories:

(a) Amortised cost

(b) Fair value through other comprehensive income

2.5.2.2 Equity instruments

The Company subsequently measures all equity investments at fair value. Where the Company’s management has elected to present fair value gains and losses on equity investments in other comprehensive income, there is no subsequent reclassification of fair value gains and losses to profit or loss following the derecognition of the investment. Dividend income from such investments continues to be recognized in profit or loss when the right to receive payments is established.

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KB SECURITIES Co., Ltd.

Notes to the Separate Financial Statements

December 31, 2023 and 2022

2.5.3 Impairment

The Company assesses on a forward-looking basis expected credit losses associated with its debt instruments carried at amortised cost and fair value through other comprehensive income. The impairment methodology applied depends on whether there has been a significant increase in credit risk.

Expected credit losses are a probability-weighted estimate of credit losses (i.e. the present value of all cash shortfalls) over the expected life of the financial instrument. The Company measures expected credit losses by reflecting reasonable and supportable information that is reasonably available at the reporting date without undue cost or effort, including information about past events, current conditions and forecasts of future economic conditions.

The Company uses the following three measurement techniques in accordance with Korean IFRS:

•

General approach: for financial assets and off-balance-sheet unused credit line that below two approaches are not applied

•

Simplified approach: for receivables, contract assets and lease receivables

•

Credit-impaired approach: for purchased or originated credit-impaired financial assets

The Company determines whether the credit risk has increased significantly since initial recognition using the following information. One or more of the following circumstances is deemed significant increase in credit risk.

•

More than 30 days past due;

•

Decline in credit rating at period end by more than certain notches as compared to that at initial recognition;

•

Decline in ratings below certain level in the early warning system;

Under simplified approach, the Company shall always measure the loss allowance at an amount equal to lifetime expected credit losses. Under credit-impaired approach, the Company shall only recognize the cumulative changes in lifetime expected credit losses since initial recognition as a loss allowance for purchased or originated credit-impaired financial assets.

The Company generally deems credit-impaired in case of one or more of the following circumstances:

•

90 days or more past due;

•

Legal proceedings related to collection;

•

Refinancing;

•

Corporate borrowers that are rated C or D;

•

Debt restructuring.

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KB SECURITIES Co., Ltd.

Notes to the Separate Financial Statements

December 31, 2023 and 2022

2.5.3.1 Forward-looking information

The Company uses forward-looking information, when it determines whether the credit risk has increased significantly since initial recognition and measures expected credit losses.

The Company assumes the risk component has a certain correlation with the business cycle, and calculates the expected credit loss by reflecting the forward-looking information with macroeconomic variables on the measurement inputs.

2.5.3.2 Measuring expected credit losses on financial assets at amortised cost

The amount of the expected credit losses on financial assets at amortised cost is measured as the difference between the asset’s carrying amount and the present value of estimated future cash flows discounted at the financial asset’s original effective interest rate. The Company estimates expected future cash flows for financial assets that are individually significant (individual assessment of impairment).

For financial assets that are not individually significant, the Company collectively estimates expected credit loss by grouping loans with homogeneous credit risk profile (collective assessment of impairment).

•

Individual assessment of impairment

Individual assessment of impairment losses are calculated using management’s best estimate on present value of expected future cash flows. The Company uses all the available information including operating cash flow of the borrower and net realizable value of any collateral held.

•

Collective assessment of impairment

2.5.3.3 Measuring expected credit losses on financial assets at fair value through other comprehensive income

2.5.4 Recognition and Derecognition

Regular way purchases and sales of financial assets are recognized or derecognized on trade-date, the date on which the Company commits to purchase or sell the asset. Financial assets are derecognized when the rights to receive cash flows from the financial assets have expired or have been transferred and the Company has transferred substantially all the risks and rewards of ownership.

If a transfer does not result in derecognition because the Company has retained substantially all the risks and rewards of ownership of the transferred asset, the Company continues to recognize the transferred asset in its entirety and recognizes a financial liability for the consideration received. The Company classified the financial liability as “borrowings” in the statement of financial position.

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KB SECURITIES Co., Ltd.

Notes to the Separate Financial Statements

December 31, 2023 and 2022

The Company writes off the carrying amount and allowance of financial assets in its entirety or to a portion thereof when the principal and interest are determined to be no longer recoverable. In general, the Company considers write-off when it is determined that the debtor does not have sufficient resources or income to cover the principal and interest, and this write-off decision is made in accordance with internal regulations.

2.5.5 Offsetting of financial instruments

2.6 Financial Liabilities

2.6.1 Classification and Measurement

The Company classifies non-derivative financial liabilities, except for financial liabilities at fair value through profit or loss, financial guarantee contracts and financial liabilities that arise when a transfer of financial assets does not qualify for derecognition, as financial liabilities carried at amortised cost and present as ‘deposits liabilities’, ‘borrowings’, and ‘other financial liabilities’ in the statement of financial position.

2.6.2 Derecognition

The Company’s financial liabilities at fair value through profit or loss are financial instruments held for trading. A financial liability is held for trading if it is incurred principally for the purpose of repurchasing in the near term. A derivative that is not a designated as hedging instruments and an embedded derivative that is separated are also classified as held for trading. Financial liabilities designated the financial liabilities at fair value through profit or loss is the structured financial liabilities containing embedded derivatives issued by the Company.

2.7 Derivative Financial Instruments

The Company enters into numerous derivative financial instrument contracts such as stock options, stock swaps, interest rate swaps and others for trading purposes or sale and issue of derivative combined securities. These derivative financial instruments are presented as derivative financial instruments within the financial statements irrespective of transaction purpose and subsequent measurement requirement.

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KB SECURITIES Co., Ltd.

Notes to the Separate Financial Statements

December 31, 2023 and 2022

2.7.1 Day 1 Profit and Loss

Accordance with Korean IFRS, if there is no available price from active market and if the Company uses a valuation technique that uses unobservable valuation parameters from market for the fair value at initial recognition of financial instruments, there could be a difference between the transaction price and the amount determined using that valuation technique. In these circumstances, the fair value of financial instruments is recognized as the transaction price and the difference is amortised by using the straight line method over the life of the financial instruments.

2.7.2 Credit risk adjustments

2.7.3 Hedge accounting

The accounting treatment of changes of fair value for the derivatives varies as the character of hedging items and the purpose of hedging. The Company holds derivative contracts for the purpose of hedging the risk and the Company designates certain derivatives as hedging instruments to hedge the risk as follows.

(a)	Fair value hedge : a hedge of the exposure to changes in fair value of a recognized asset or liability or an unrecognized firm commitment

(b)	Cash flow hedge : a hedge of the exposure to variability in cash flows that is attributable to a particular risk associated with all, or a component of, the recognized asset or liability or a highly probable forecast transaction

(c)	Hedge of net investments in foreign operations

On initial designation of the hedge, the Company formally documents the relationship between the hedging instrument(s) and hedged items, including the risk management objectives and strategy in undertaking the hedge transaction, together with the methods that will be used to assess the effectiveness of the hedging relationship.

The fair value of derivatives for hedge is disclosed in note 37.

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KB SECURITIES Co., Ltd.

Notes to the Separate Financial Statements

December 31, 2023 and 2022

The accounting treatments of hedge of net investments in foreign operations are similar to those of cash flow hedge.

2.8 Property and Equipment


Property and equipment	Estimated useful lives	Depreciation method
Buildings	40 years	Straight-line method
Vehicles	4 years	Straight-line method
Furniture and equipment	4 years	Straight-line method
Other	4 years	Straight-line method
Right-of-use assets	1~10 years (initial date of the contract entered into ~ maturity date)	Straight-line method

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KB SECURITIES Co., Ltd.

Notes to the Separate Financial Statements

December 31, 2023 and 2022

2.9 Investment Property

2.10 Intangible Assets

Intangible assets are measured initially at cost and subsequently carried at their cost less any accumulated amortization and any accumulated impairment losses.


Intangible assets	Estimated useful lives	Amortization method
Development costs	4 years	Straight-line method
Software	4 years	Straight-line method

2.11 Impairment of Non-financial Assets

2.12 Lease

Lease income from operating leases where the Company is a lessor is recognized on a straight-line basis over the lease term. Initial direct costs incurred in obtaining an operating lease are added to the carrying amount of the underlying asset and recognized as expense over the lease term on the same basis as lease income. The respective leased assets are included in the statement of financial position based on their nature.

The Company should assess whether a contract is, or contains a lease at the date the contract entered into and the initial application date under Korean IFRS No.1116. But the Company may elect not to reassess whether a contract is, or contains a lease for the contract entered into before the transition date by applying practical expedient permitted by Korean IFRS No.1116. The Company has gone through all the contract to assess whether the contract is, or contains, a lease at the date the contract entered into after the date of initial application.

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KB SECURITIES Co., Ltd.

Notes to the Separate Financial Statements

December 31, 2023 and 2022

Lease liabilities include the net present value of the following lease payments:

•

Fixed payments (including in-substance fixed payments), less any lease incentives receivable

•

Variable lease payment that are based on an index or a rate

•

Amounts expected to be payable by the lessee under residual value guarantees

•

The exercise price of a purchase option if the lessee is reasonably certain to exercise that option, and

•

Payments of penalties for terminating the lease, if the lease term reflects the lessee exercising an option to terminate the lease

The lease payments are discounted using the interest rate implicit in the lease, if that rate can be readily determined. If that rate cannot be readily determined, the lessee’s incremental borrowing rate is used, being the rate that the lessee would have to pay to borrow the funds necessary to obtain an asset of similar value to the right-of-use asset in a similar economic environment with similar terms and conditions.

Right-of-use assets are measured at cost comprising the following:

•

The amount of the initial measurement of lease liability

•

Any lease payments made at or before the commencement date less any lease incentives received

•

Any initial direct costs incurred by the lessee, and

•

An estimate of restoration costs

The right-of-use asset is depreciated over the shorter of the asset’s useful life and the lease term.

Related to sale and leaseback, the Company (seller-lessee) is required to apply the Korean IFRS No.1115 ‘Revenue from Contracts with Customers’ to determine whether the transfer of an asset is accounted for as a sale of that asset. However, the Company shall not reassess sale and leaseback transactions entered into before the date of initial application.

Large number of lease contracts held by the Company have extension option and termination option. These conditions are generally used for maximizing the flexibility of lease operation in a view of managing the contracts. Extension option or termination option included in the lease contracts are generally owned by the Company, not lessor. The Company re-evaluated the lease term of the lease contracts by taking into account the contract type, operation plan for branch offices, and costs related to lease termination. As a result, no significant change in the existing lease term has occurred.

2.13 Provisions

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KB SECURITIES Co., Ltd.

Notes to the Separate Financial Statements

December 31, 2023 and 2022

2.14 Financial Guarantee Contracts

Financial guarantees contracts provided by the Company are initially measured at fair value on the date the guarantee was given. Subsequent to initial recognition, the Company’s liabilities under such guarantees are measured at the higher of the amounts below and recognized as ‘other financial liabilities’:

•

Loss allowance in accordance with Korean IFRS No.1109, ‘Financial Instruments’

•

2.15 Revenue Recognition

The Company recognizes revenues in accordance with the following five-step revenue recognition standard (Korean IFRS No.1115 Revenue from Contracts with Customers).

•

Step 1: Identify the contract with a customer.

•

Step 2: Identify the performance obligations in the contract.

•

Step 3: Determine the transaction price.

•

Step 4: Allocate the transaction price to the performance obligations in the contract.

•

Step 5: Recognize revenue when (or as) the entity satisfies a performance obligation.

2.16 Employee Benefits

2.16.1 Retirement benefit liabilities: Defined benefit plans and Defined contribution plans

The Company has both defined benefit and defined contribution plans. A defined contribution plan is a pension plan under which the Company pays fixed contributions into a separate entity. The contributions are recognized as employee benefit expenses when an employee has rendered service. A defined benefit plan is a pension plan that is not a defined contribution plan.

If any plan amendments, curtailments, or settlements occur, past service costs or any gains or losses on settlement are recognized as profit or loss for the year.

2.16.2 Short-term employee benefits

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KB SECURITIES Co., Ltd.

Notes to the Separate Financial Statements

December 31, 2023 and 2022

The expected cost of profit-sharing and bonus payments are recognized as liabilities when the Company has a present legal or constructive obligation to make such payments as a result of past events rendered by employees and a reliable estimate of the obligation can be made.

2.16.3 Share-based payment

The Company is under share-based payment arrangements that grant shares to the executives of the Company. When the arrangements are exercised, the Company provides share or cash equal to the monetary value of the share.

The Company measures the services acquired and the liability incurred at fair value, and the fair value is recognized as expense and accrued expenses over the vesting period. Until the liability is settled, the Company remeasures the fair value of the liability at the end of each reporting period and at the date of settlement, with any changes in fair value recognized in profit or loss as share-based payments.

2.17 Income Tax Expenses

2.17.1 Current income tax

The Company offsets current income tax assets and current income tax liabilities if, and only if, the Company (a) has a legally enforceable right to set off the recognized amounts and (b) intends to settle on a net basis.

2.17.2 Deferred income tax

Deferred income tax is recognized on temporary differences arising from investments in subsidiaries and associates, except where the timing of the reversal of the temporary difference is controlled by the Company and it is probable that the temporary difference will not reverse in the foreseeable future.

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KB SECURITIES Co., Ltd.

Notes to the Separate Financial Statements

December 31, 2023 and 2022

The carrying amount of a deferred income tax asset is reviewed at the end of each reporting period. The Company reduces the carrying amount of a deferred income tax asset to the extent that it is no longer probable that sufficient taxable profit will be available to allow the benefit of part or all of that deferred income tax asset to be utilized.

Deferred income tax assets and liabilities are measured at the tax rates that are expected to apply to the period when the asset is realized or the liability is settled, based on tax rates (and tax laws) that have been enacted or substantively enacted by the end of the reporting period. The measurement of deferred income tax liabilities and deferred income tax assets reflects the tax consequences that would follow from the manner in which the Company expects, at the end of the reporting period, to recover or settle the carrying amount of its assets and liabilities.

Current income tax and deferred income tax are included in the calculation of income tax expense. Income taxes related to prior period are included in current income tax.

Deferred income taxes, recognized directly in equity or arisen from business combination, are directly deducted from equity or goodwill.

2.18 Operating Segment Reporting

Operating segments are components of the Company, about which separate internal reporting information is evaluated regularly by the chief operating decision makers including Board of Directors in deciding how to allocate resources and to assess performance. Each segment is a strategic business unit that offers different products and services, and is managed separately because each business has different risks and opportunities, different technology required and marketing strategies.

Segment information includes the items which are directly attributable and reasonably allocated to the segment.

2.19 Other Receivables and Payables Related to Brokerage Transactions

Regarding customer brokerage transactions, the Company recognizes the receivable from and payable to the Korea Exchange (Clearing and settlement organization) and customers in total amounts, which the Company recognizes as other financial assets and other financial liabilities. The Company offsets the receivable and payable that arise between Korea Exchange and the Company within the same day.

2.20 Business Combinations

The acquisition method of accounting is used to account for business combinations by the Company. The consideration transferred is measured at the fair values of the assets transferred, and identifiable assets acquired and liabilities and contingent liabilities assumed in a business combination are measured initially at their fair values at the acquisition date.

The Company applies the book-value method to account for business combinations of entities under common control. Identifiable assets acquired and liabilities assumed in a business combination are measured at their book values on the financial statements of the ultimate parent entity. In addition, the difference between the sum of book values of the assets and liabilities transferred and accumulated other comprehensive income; and the consideration paid is recognized as capital surplus.

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KB SECURITIES Co., Ltd.

Notes to the Separate Financial Statements

December 31, 2023 and 2022

2.21 Approval of Issuance of the Financial Statements

The issuance of the December 31, 2023 separate financial statements of the Company was approved by the Board of Directors on March 6, 2024, which is subject to change with approval at the annual shareholder’s meeting.

3. Critical Accounting Estimates and Assumptions

The preparation of financial statements requires the Company to make estimates and assumptions concerning the future. Management also needs to exercise judgement in applying the Company’s accounting policies. Estimates and assumptions are continually evaluated and are based on historical experience and other factors, including expectations of future events that are believed to be reasonable under the circumstances. As the resulting accounting estimates will, by definition, seldom equal the related actual results, it can contain a significant risk of causing a material adjustment.

3.1 Income taxes

The Company recorded, based on its best estimate, current taxes and deferred taxes that the Company will be liable in the future for the operating results at the end of the reporting period. However, the final tax outcome in the future may be different from the amounts that were initially recorded. Such differences will impact the current and deferred income tax assets and liabilities in the period in which the final tax outcome is determined.

If certain portion of the taxable income is not used for investments or increase in wages in accordance with the Special Taxation for Facilitation of Investment and Mutually-Beneficial Cooperation, the Company is liable to pay additional income tax calculated based on the tax law. Accordingly, the measurement of current and deferred income tax is affected by the tax effects from such tax law. As the Company’s income tax is dependent on the investments and increase in wages, there exists uncertainty with regard to measuring the final tax effects.

3.2 Fair value of financial instruments

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KB SECURITIES Co., Ltd.

Notes to the Separate Financial Statements

December 31, 2023 and 2022

3.3 Impairment of financial assets

In accordance with Korean IFRS No.1109, the provision for impairment for financial assets are based on assumptions about risk of default and expected loss rates. The Company uses judgment in making these assumptions and selecting the inputs to the impairment calculation based on the Company’s past history, existing market conditions as well as forward-looking estimates at the end of each reporting period (Note 2.5).

3.4 Measurement of defined benefit obligation

The present value of the defined benefit liability depends on a number of factors that are determined on an actuarial basis using a number of assumptions. The assumptions used in determining the net cost (income) for pensions include the discount rate. Any changes in these assumptions will impact the carrying amount of the defined benefit liability. The Company determines the appropriate discount rate at the end of the reporting period. This is the interest rate that is used to determine the present value of estimated future cash outflows expected to be required to settle the defined benefit liability. In determining the appropriate discount rate, the Company considers the interest rates of high-quality corporate bonds that are denominated in the currency in which the pension benefits will be paid, and that have terms to maturity approximating to the terms of the related pension liability. Other key assumptions for defined benefit liability are based in part on current market conditions.

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KB SECURITIES Co., Ltd.

Notes to the Separate Financial Statements

December 31, 2023 and 2022

4. Segment Information

4.1 Types of services from which each reportable segment derives its revenues

Management of the Company decides operating segment based on the information, which is to be reported to the chief executive officer, in order to allocate resources to the segment and evaluate performance of the segment. The Company’s operating segments consist of brokerage and wealth management, investment banking, trading and other business part.

In accordance with Korean IFRS No.1108, reporting segments of the Company by type of services categories are as follows:


Reporting segment		Main business activities
Brokerage and wealth management		Sales and services relating to wealth management and brokerage provided to individuals, corporations and institutional investors

Investment banking		Underwriting and advisory services related to bond issuance, structured finance, initial public offering, and mergers and acquisition

Trading		Trading of securities and derivatives, and proprietary trading

Others		Other services and support services

4.2 Revenue and income of segment reporting

Financial information by operating segment for the years ended December 31, 2023 and 2022, are as follows:


(in thousands of Korean won)
	2023
	Operating income		Operating expense		Operating profit (loss)		Non-operating income (expense)			Income tax expense		Profit (loss) for the year
Brokerage and wealth management		4,162,257,567		3,925,688,546		236,569,021		(15,673,946	)		—		220,895,075
Investment banking		974,957,814		797,871,693		177,086,121		(163,036,425	)		—		14,049,696
Trading		5,783,714,581		5,740,497,881		43,216,700		9,289,767			—		52,506,467
Others 1		319,277,714		122,613,549		196,664,165		(42,661,124	)		89,090,738		64,912,303

		11,240,207,676		10,586,671,669		653,536,007		(212,081,728	)		89,090,738		352,363,541

1	All income tax expenses are allocated to the others segment, due to the difficulty of reasonable allocation.


(in thousands of Korean won)
	2022
	Operating income		Operating expense		Operating profit (loss)			Non-operating income (expense)			Income tax expense		Profit (loss) for the year
Brokerage and wealth management		2,319,349,482		2,179,648,293		139,701,189			(19,620,828	)		—		120,080,361
Investment banking		867,151,810		746,582,110		120,569,700			68,589,313			—		189,159,013
Trading		10,622,124,083		10,740,421,352		(118,297,269	)		1,375,474			—		(116,921,795	)
Others 1		168,186,307		93,363,333		74,822,974			(36,598,074	)		60,247,522		(22,022,622	)

		13,976,811,682		13,760,015,088		216,796,594			13,745,885			60,247,522		170,294,957

1	All income tax expenses are allocated to the others segment, due to the difficulty of reasonable allocation.

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KB SECURITIES Co., Ltd.

Notes to the Separate Financial Statements

December 31, 2023 and 2022

4.3 Assets and liabilities of segments

Total assets and liabilities by each segment as at December 31, 2023 and 2022, are as follows:


(in thousands of Korean won)	2023
	Total assets		Total liabilities
Brokerage and wealth management		8,557,590,262		7,407,509,415
Investment banking		3,370,251,863		152,321,037
Trading		25,836,183,290		18,296,419,004
Others		20,064,462,388		25,815,026,079

		57,828,487,803		51,671,275,535


(in thousands of Korean won)	2022
	Total assets		Total liabilities
Brokerage and wealth management		7,398,410,715		6,428,705,688
Investment banking		3,135,300,826		86,637,307
Trading		23,836,270,897		18,743,394,623
Others		16,280,732,206		19,576,438,492

		50,650,714,644		44,835,176,110

4.4 Information on principal customers

No single customer contributed 10% or more to the Company’s revenue for the years ended December 31, 2023 and 2022.

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KB SECURITIES Co., Ltd.

Notes to the Separate Financial Statements

December 31, 2023 and 2022

5. Cash and Deposits

The details of cash and deposits as at December 31, 2023 and 2022, are as follows:


(in thousands of Korean won)	2023			2022
Cash and cash equivalents
Cash on hand		98			14,096
Demand deposits		170,183,415			658,388,425
Checking deposit		4,779,837			12,051,431
Foreign currency deposits		109,959,995			268,540,580
MMDA		92,034,412			84,127,974
Accommodation notes		65,212,108			4,747,856

		442,169,865			1,027,870,362

Deposits
Deposits for securities subscription		2,166,493			1,007,522
Reserve for claims of customers’ deposits		434,840,018			456,165,726
Guarantee deposits for securities lending and borrowing		203,006,941			120,336,120
Deposits for exchange-traded derivatives		624,629,214			1,079,340,866
Guarantee deposits for KSFC trading		529,659			2,513,154
Long-term deposits		75,000,000			575,000,000
Restricted due from financial institutes		39,000			39,000
Others		542,624,988			766,660,854
Allowances for credit losses of deposits		(290,185	)		(645,197	)

		1,882,546,128			3,000,418,045

		2,324,715,993			4,028,288,407

Restricted deposits as at December 31, 2023 and 2022, are as follows:


(in thousands of Korean won)	2023		2022
Deposits for securities subscription 1		2,166,493		1,007,522
Reserve for claims of customers’ deposits 2		434,840,018		456,165,726
Guarantee deposits for securities lending and borrowing 3		203,006,941		120,336,120
Deposits for exchange-traded derivatives 4		624,629,214		1,079,340,866
Guarantee deposits for KSFC trading 5		529,659		2,513,154
Long-term deposits 6		69,000,000		569,000,000
Restricted due from financial institutes 7		39,000		39,000
Others 8		542,624,988		766,660,854

		1,876,836,313		2,995,063,242

Subscription deposits are subscription margin of investors and the Company that are separately deposited at Korea Securities Finance Corporation(KSFC) or other relevant financial institutions until due date for payment for the subscription of the newly issued or sold securities in accordance with the provisions of Article 4-44 of the Regulation on Financial Investment Business.

2	The reserve for claims of customers’ deposits is deposited separately in a form of trust in KSFC to meet the demands of investors, such as return of deposit and others, in accordance with Article 74 of the Financial Investment Services and Capital Markets Act.

3	Deposited in Korea Securities Depository to guarantee for securities lending and borrowing.

4	The deposits for exchange-traded derivatives that the investors and the Company pay for foreign futures option trading to KEB Hana Bank and Forex Dealer Member.

5	In the case of an investor’s loan transaction, a certain portion of the price of securities sold is deposited at KSFC as margin.

6	Pledged deposits provided for securities lending and borrowing, repurchase agreements between institutions and retail payment through investment & securities companies are included.

7	Guarantee deposits for checking accounts

8	Deposits in foreign currency and others consist of the margin accounts for trading financial instruments in foreign markets and deposits to court.

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KB SECURITIES Co., Ltd.

Notes to the Separate Financial Statements

December 31, 2023 and 2022

Changes in allowances for credit losses of deposits for the years ended December 31, 2023 and 2022, are as follows:


(in thousands of Korean won)	2023
	12-month expected credit losses			Lifetime expected credit losses
	12-month expected credit losses			Non-impaired		Impaired
Beginning		645,197			—		—
Reversal of provision		(355,012	)		—		—

		290,185			—		—


(in thousands of Korean won)	2022
	12-month expected credit losses		Lifetime expected credit losses
	12-month expected credit losses		Non-impaired		Impaired
Beginning		632,598		—		—
Provision		12,599		—		—

		645,197		—		—

6. Financial Instruments at FVTPL

The details of financial instruments at FVTPL as at December 31, 2023 and 2022, are as follows:


(in thousands of Korean won)	Financial Assets at FVTPL				Financial Liabilities at FVTPL
	2023		2022		2023		2022
Financial assets required to be mandatorily measured at FVTPL		35,529,339,671		28,995,718,418		2,860,033,642		2,082,979,265
Financial assets designated at FVTPL		—		—		7,975,847,458		10,088,600,213

		35,529,339,671		28,995,718,418		10,835,881,100		12,171,579,478

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KB SECURITIES Co., Ltd.

Notes to the Separate Financial Statements

December 31, 2023 and 2022

6.1 Financial assets required to be mandatorily measured at FVTPL

The details of financial assets required to be mandatorily measured at FVTPL as at December 31, 2023 and 2022, are as follows:


(in thousands of Korean won)	2023		2022
Deposits
Reserve for claims of customers’ deposits (trust) 1		4,708,118,940		4,531,756,553
Equity instruments
Stocks		923,732,924		604,033,526
Debt instruments
Government and local government bonds		3,903,440,137		4,092,627,487
Special bonds		2,981,409,472		1,793,814,905
Corporate bonds		5,907,122,398		4,093,880,890
Corporate commercial papers		6,575,704,889		5,196,584,584
Asset-backed short-term bonds		2,257,642,941		2,406,246,303
Hybrid bond with security-like features		244,663,741		220,498,019
Investment in partnerships		581,762,940		440,156,234
Collective investment securities		4,600,708,350		3,311,063,660
Hybrid stock with bond-like features		124,485,659		120,388,757
Loans
Privately placed bonds		—		42,604,988
Derivative linked securities
Equity-linked securities		9,129,439		31,899,039
Other derivative linked securities		615,830,815		331,528,412
Other OTC derivative combined contract		187,620,544		236,574,425
Securities in foreign currency
Stocks in foreign currency		24,839,546		26,990,295
Bonds in foreign currency		661,392,565		621,320,119
Investments in partnerships in foreign currency		44,768,900		43,983,023
Collective investment securities in foreign currency		190,230,987		208,724,857
Collective fund for default loss		83,483,822		82,667,524
Hybrid bonds		473,554,744		558,301,229
Exchange traded notes		10,540		73,589
Other short-term securities held for sale		429,685,378		—

		35,529,339,671		28,995,718,418

Details of securities sold which are classified as financial liabilities at FVTPL as at December 31, 2023 and 2022, are as follows:


(in thousands of Korean won)	2023		2022
Equity Securities
Stocks		585,888,153		428,935,822
Collective investment securities		2,771,484		2,268,236
Debt Securities
Government and local government bonds		2,271,374,005		1,651,775,207

		2,860,033,642		2,082,979,265

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KB SECURITIES Co., Ltd.

Notes to the Separate Financial Statements

December 31, 2023 and 2022

Assets Pledged as Collateral

The details of financial assets pledged as collateral as at December 31, 2023 and 2022, are as follows:


(in thousands of Korean won)	Description	2023		2022		Security right holder
Financial assets at FVTPL	Guarantee deposits for lending and borrowing securities and bonds		10,076,739,059		7,063,541,100	Korea Securities Depository, etc.
	Margin required and guarantee deposits for derivatives trading		1,556,234,283		1,129,757,669	Korea Stock Exchange, etc.
	Guarantee deposits for clearing fund		—		1,458,725	Korea Securities Depository
	Guarantee deposits for reverse repurchase agreements		3,200,510,963		3,724,891,983	Customer, Institution
	Guarantee deposits for agency of balance payments		98,000,000		98,000,000	Kookmin Bank
Financial assets at FVOCI	Guarantee deposits for lending and borrowing securities and bond		1,719,208,234		1,592,460,037	Korea Securities Depository, etc.
	Guarantee deposits for derivatives trading		167,879,197		136,701,325	Hana Securities Co., Ltd., etc.
	Guarantee deposits for reverse repurchase agreements		2,509,724,246		2,234,882,535	Customer, Institution
Other financial assets	Guarantee deposits for lending and borrowing securities and bonds		—		47,850,000	KSFC

			19,328,295,982		16,029,543,374

(*)	As at December 31, 2023 and 2022, the accrued interests related to debt securities provided as collateral of 344,448 million and 228,578 million, respectively, are excluded.

The Company provides 7,916,155 million and 4,986,339 million of its borrowing securities held as collateral to KSFC and others as at December 31, 2023 and 2022, respectively.

As at December 31, 2023 and 2022, the fair values of collaterals sold or repledged as collaterals regardless of default are as follows:


(in thousands of Korean won)	Securities
	2023		2022
Fair value of collateral held		1,475,466,369		771,983,450
Fair value of collaterals sold or re-provided as collateral		—		—

		1,475,466,369		771,983,450

6.2 Financial liabilities designated at FVTPL

The details of financial liabilities designated at FVTPL as at December 31, 2023 and 2022, are as follows:


(in thousands of Korean won)	Financial liabilities designated at FVTPL
	2023		2022
Derivative linked securities
Equity-linked securities		5,150,606,199		6,804,836,388
Other derivative linked securities		1,834,571,974		1,636,774,811
Other OTC derivative combined contract		933,983,691		1,611,301,701
Exchange traded notes		56,685,594		35,687,313

		7,975,847,458		10,088,600,213

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KB SECURITIES Co., Ltd.

Notes to the Separate Financial Statements

December 31, 2023 and 2022

The differences between the contractual value to be paid at maturity and the carrying amount of financial liabilities at FVTPL as at December 31, 2023 and 2022, are as follows :


(in thousands of Korean won)	2023			2022
Contractual value to be paid at maturity		7,871,014,106			9,973,339,575
Carrying amount		7,975,847,458			10,088,600,213

Differences		(104,833,352	)		(115,260,638	)

Accumulated changes in fair value of financial liabilities at FVTPL due to the change of credit risk as at December 31, 2023 and 2022, are as follows :


(in thousands of Korean won)	Other comprehensive income recognized from changes of fair value due to the change of credit risk (before tax) 1
	2023			2022
Beginning of the year		(55,892,336	)		(3,070,045	)
Change of fair value		71,900,709			(52,822,291	)

End of the year		16,008,373			(55,892,336	)

1	The Company assessed OCI based on the probability of default corresponding to the Company’s credit rating and loss given default. The amount is before tax.

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KB SECURITIES Co., Ltd.

Notes to the Separate Financial Statements

December 31, 2023 and 2022

7. Derivatives and Hedge Accounting

Derivatives owned by the Company as at December 31, 2023 and 2022, are as follows:


	2023
	Assets				Liabilities
(in thousands of Korean won)	Hedging		Trading		Hedging		Trading		Unsettled amount
Exchange-traded derivatives
Interest rate:
Futures		—		6,226,442		—		4,358,742		4,042,993,055
Equity:
Futures		—		11,179,142		—		13,231,866		1,309,051,635
Purchase options		—		6,954,717		—		—		463,629,117
Written options		—		—		—		76,362,413		684,865,465
Currency:
Futures		—		695,841		—		242,418		193,521,882
Goods:
Futures		—		1,304,534		—		105,876		26,037,012

		—		26,360,676		—		94,301,315		6,720,098,166

OTC derivatives
Interest rate:
Forwards		—		501,834,690		—		483,149,733		14,811,295,000
Swaps		—		109,345,316		—		242,616,276		195,252,814,288
Options		—		2,018,458		—		3,037,884		310,000,000
Currency:
Forwards		—		49,044,667		5,307,120		51,416,659		6,062,007,794
Swaps		—		15,064,959		—		16,848,944		534,879,078
Options		—		9,208,609		—		952		412,828,000
Equity:
Swaps		—		327,873,021		—		491,916,197		5,114,409,518
Purchase options		—		71,207,596		—		—		1,864,702,957
Written options		—		—		—		163,911,123		1,854,850,307
Credit:
Swaps		—		17,799,282		—		8,695,443		2,864,356,720
Goods:
Swaps		—		4,348,110				4,351,784		31,635,429
Options		—		1,091,360		—		1,146,632		100,484,231
Others:
Swaps		—		—		—		245,312,183		694,541,167

		—		1,108,836,068		5,307,120		1,712,403,810		229,908,804,489

		—		1,135,196,744		5,307,120		1,806,705,125		236,628,902,655


	2022
	Assets				Liabilities
(in thousands of Korean won)	Hedging		Trading		Hedging		Trading		Unsettled amount
Exchange-traded derivatives
Interest rate:
Futures		—		577,939		—		256,477		2,310,773,337
Equity:
Futures		—		35,187,795		—		89,623,607		1,805,532,521
Purchase options		—		58,416,888		—		—		1,642,156,435
Written options		—		—		—		330,682,246		2,408,934,407

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KB SECURITIES Co., Ltd.

Notes to the Separate Financial Statements

December 31, 2023 and 2022


Currency:
Futures	—	36,107	—	1,116,502	272,274,527
Goods:
Futures	—	1,969,714	—	940,729	28,576,813

	—	96,188,443	—	422,619,561	8,468,248,040

OTC derivatives
Interest rate:
Forwards	—	699,505,103	—	585,959,569	9,274,000,000
Swaps	—	103,770,321	—	263,433,622	139,380,656,724
Options	—	8,032,470	—	8,906,536	830,000,000
Currency:
Forwards	—	230,688,984	10,070,190	162,136,418	9,184,163,903
Swaps	—	10,205,826	—	11,813,068	464,220,055
Options	—	21,446,632	—	438,473	595,631,000
Equity:
Swaps	—	377,816,741	—	492,274,693	6,591,918,841
Purchase options	—	107,414,599	—	—	1,446,151,498
Written options	—	—	—	28,591,489	1,747,432,558
Credit:
Swaps	—	32,859,630	—	17,468,307	3,006,113,907
Goods:
Options	—	887,437	—	885,284	131,500,117
Others:
Swaps	—	13,153,870	—	313,466,501	909,001,211

	—	1,605,781,613	10,070,190	1,885,373,960	173,560,789,814

	—	1,701,970,056	10,070,190	2,307,993,521	182,029,037,854

The Company entered into the derivative contracts and applied fair value hedge accounting for hedging foreign exchange risk of the investment in subsidiaries and others.

Gain or loss on fair value hedge for the years ended December 31, 2023 and 2022, are as follows:


(in thousands of Korean won)	2023			2022
Gain(loss) on the hedging instrument		(4,791,666	)		(17,212,706	)
Gain(loss) on the hedged item attributable to the hedged risk		4,791,666			17,212,706

		—			—

The average price related to hedge of net investments in foreign operations as at December 31, 2023 and 2022, are as follows:


(in thousands of Korean won)	2023
	The nominal amount of the hedging instrument		Average price (KRW/USD, Korean won)
1 year		31,332,420		1,071.00
2 year		—		—
3 year		207,593,400		—
Over 3 year		—		1,178.92

		238,925,820		1,164.76

Table of Contents

KB SECURITIES Co., Ltd.

Notes to the Separate Financial Statements

December 31, 2023 and 2022


(in thousands of Korean won)	2022
	The nominal amount of the hedging instrument		Average price (KRW/USD, Korean won)
1 year		65,012,490		1,071.00
2 year		—		—
3 year		—		—
Over 3 year		204,035,300		1,178.92

		269,047,790		1,152.84

The contents of fair value hedge as of December 31, 2023 and 2022, are as follows:


	2023
(in thousands of Korean won)	Carrying amount (asset)		Accumulated fair value (asset)		Change of fair value for the year
Currency
Investment in subsidiaries		269,912,803		22,784,034		4,791,666


	2022
(in thousands of Korean won)	Carrying amount (asset)		Accumulated fair value (asset)		Change of fair value for the year
Currency
Investment in subsidiaries		303,653,815		24,395,046		17,212,706

8. Financial Assets at FVOCI

The details of financial assets at FVOCI as at December 31, 2023 and 2022, are as follows:


(in thousands of Korean won)	2023		2022
Equity instruments
Stocks 1		432,986,575		420,330,275
Investment in partnerships		1,200,000		1,200,000
Other		425,898,552		264,586,560
Debt instruments
Government and municipal government bonds		5,248,842		5,025,406
Special bonds		1,519,494,875		690,761,850
Corporate bonds		2,542,007,878		3,194,758,700
Debt instruments in foreign currency		203,567,442		222,182,668

		5,130,404,164		4,798,845,459

1	Equity investment on Korea Stock Exchange and other relative institutions.

Table of Contents

KB SECURITIES Co., Ltd.

Notes to the Separate Financial Statements

December 31, 2023 and 2022

Changes in gains and losses on valuation of financial assets at FVOCI (before tax) for the year ended December 31, 2023 and 2022, are as follows:


	2023
(in thousands of Korean won)	Beginning balance			Valuation1		Disposal / transfer		Ending balance
Stocks		373,514,968			12,656,300		—		386,171,268
Government and local government bonds		(195,840	)		252,871		—		57,031
Special bonds		(2,654,207	)		3,686,348		2,654,207		3,686,348
Corporate bonds		(23,558,045	)		19,132,483		11,242,068		6,816,506
Securities in foreign currency		(6,164,532	)		5,080,455		49,013		(1,035,064	)
Other securities in Korean won		(22,900,422	)		21,311,991		—		(1,588,431	)

		318,041,922			62,120,448		13,945,288		394,107,658

1	Provision for credit loss of debt instruments at FVOCI as 693 million and reversal of provision for credit loss of debt instruments at FVOCI as 170 million are excluded.


	2022
(in thousands of Korean won)	Beginning balance			Valuation1			Disposal / transfer			Ending balance
Stocks		318,760,788			54,754,180			—			373,514,968
Government and local government bonds		1,768			(194,598	)		(3,010	)		(195,840	)
Special bonds		(3,852,333	)		(746,312	)		1,944,438			(2,654,207	)
Corporate bonds		(14,256,566	)		(15,405,862	)		6,104,383			(23,558,045	)
Securities in foreign currency		(915,931	)		(5,390,112	)		141,511			(6,164,532	)
Other securities in Korean won		(1,125,111	)		(21,775,311	)		—			(22,900,422	)

		298,612,615			11,241,985			8,187,322			318,041,922

1	Provision for credit loss of debt instruments at FVOCI as 2 million and reversal of provision for credit loss of debt instruments at FVOCI as 477 million are excluded.

There are no equity investments at FVOCI derecognized for the year ended December 31, 2023.

The dividend income from equity investments at FVOCI for the years ended December 31, 2023 and 2022, are as follows;


(in thousands of Korean won)	2023				2022
	Derecognised		Held at the end of reporting period		Derecognised		Held at the end of reporting period
Equity investments at FVOCI
Non marketable securities		—		9,216,729		—		9,536,521
Other equity investments		—		17,262,460		—		8,493,303

The Company recognized provision for credit loss of debt instruments at FVOCI amount (before tax) to 1,528 million and 1,004 million, as at December 31, 2023 and 2022, respectively.

Table of Contents

KB SECURITIES Co., Ltd.

Notes to the Separate Financial Statements

December 31, 2023 and 2022

9. Investments in Subsidiaries and Associates

Investments in subsidiaries and associates as at December 31, 2023 and 2022, are as follows:


(in thousands of Korean won)	2023
	Location		Percentage of ownership(%)		Date of financial statements 5		Net Asset			Book amount		Main Business
Subsidiaries
KBFG Securities America Inc.		USA		100.00		December		17,336,165			17,259,715		Investment, advisory
KB Securities Hong Kong Ltd.		Hong Kong		100.00		December		252,062,177			235,795,783		Investment, advisory
KB Securities Vietnam Joint Stock Company		Vietnam		99.81		December		218,463,690			173,875,579		Investment, advisory
KB FINA Joint Stock Company		Vietnam		77.82		December		10,759,391			11,146,330		IT(Fintech)
PT. KB Valbury Sekuritas		Indonesia		65.00		December		80,350,839			57,221,997		Investment, advisory
KB Digital Innovation&growth New Technology Business Investment Fund 1		Korea		20.00		December		7,830,219			2,000,000		Other financial
KB Pre-IPO 2nd (TCB) New Technology Business Investment Fund 1		Korea		42.86		December		33,482,109			14,550,000		Other financial
KB Global Contents Private Investment Fund 1		Korea		27.27		December		15,948,028			4,500,000		Other financial
JB New Jersey Private Real Estate Fund 1		Korea		98.15		December		16,307,532			1,074,621		Funds
LB Irealand Private Real Estate Investment Trust 8		Korea		96.64		December		(3,829,847	)		—		Funds
Pacific US BlackRock Private Placement Real Estate Fund Investment Trust No. 15		Korea		98.51		December		14,107,716			17,757,064		Funds
Vestas Qualified Investors’ Private Real Estate Fund Investment Trust No. 38		Korea		53.25		December		4,932,871			1,633,129		Funds
Mangrove Feeder Fund		Cayman Islands		86.06		December		35,029,713			34,117,020		Funds
GH Real Estate I LP		Guernsey		81.00		December		27,242,625			22,089,260		Investment
JB Dry Street Private Fund 1		Korea		100.00		December		209,816			239,920		Funds
JB Australia108 Private Fund 1		Korea		100.00		December		139,494			165,847		Funds
JB Forge Private Fund 1		Korea		100.00		December		99,653			118,464		Funds
JB Hall Street Private Fund 1		Korea		100.00		December		211,208			245,327		Funds
JB Margaret Street Private Fund 1		Korea		100.00		December		58,849			68,655		Funds
GVA Europe Pre-IPO Private Investment Trust No.1		Korea		100.00		December		29,888,662			20,000,000		Funds
LIFE Global Reits Pre-IPO General Private Investment Trust 1		Korea		99.50		December		59,595,114			59,470,000		Funds
Star-Lord AlphaFlux General Investors Private Real Estate Investment Company No.11 2		Korea		99.78		December		38,235,836			44,900,000		Funds
Able Gwonseon 1st Co., Ltd. 1		Korea		—		December		(15,057	)		—		Asset-backed securitization
Newstar IP Co., Ltd. 1		Korea		—		December		(669,090	)		—		Asset-backed securitization
Newstar Gimpo 1st Co., Ltd 1		Korea		—		December		(9,951,026	)		—		Asset-backed securitization
Able Gongpyeong 1st Co.,Ltd 1		Korea		—		December		(165,562	)		—		Asset-backed securitization
Newstar Believe Co., Ltd. 1		Korea		—		December		(901,759	)		—		Asset-backed securitization
ABR Joongang2 1st Co.,Ltd 1		Korea		—		December		492,477			—		Asset-backed securitization
KB Tongyoung 1st Co., Ltd 1		Korea		—		December		458,067			—		Asset-backed securitization

Table of Contents

KB SECURITIES Co., Ltd.

Notes to the Separate Financial Statements

December 31, 2023 and 2022


(in thousands of Korean won)	2023
	Location	Percent age of ownership(%)	Date of financial statements 5	Net Asset			Book amount		Main Business
Able Sewoon Co., Ltd. 1	Korea	—	December		147,378			—	Asset-backed securitization
Able Gasan 1st Co., Ltd. 1	Korea	—	December		115,712			—	Asset-backed securitization
Able PT 1st Co., Ltd 1	Korea	—	December		223,936			—	Asset-backed securitization
Newstar Plus 1st Co., Ltd. 1	Korea	—	December		613,732			—	Asset-backed securitization
KB MyeongJi 1st Co.,Ltd. 1	Korea	—	December		350,670			—	Asset-backed securitization
Able Dangjin 1st Co.,Ltd. 1	Korea	—	December		322,596			—	Asset-backed securitization
KB Osansegyo 2nd Co.,Ltd. 1	Korea	—	December		26,960			—	Asset-backed securitization
KB Mapo 2nd Co.,Ltd. 1	Korea	—	December		(811,560	)		—	Asset-backed securitization
Able Wonchang 1st Co., Ltd. 1	Korea	—	December		(1,347,484	)		—	Asset-backed securitization
Zitaress 1st Co., Ltd. 1	Korea	—	December		146,517			—	Asset-backed securitization
Able Beomeo-one Co., Ltd. 1	Korea	—	December		(278,327	)		—	Asset-backed securitization
KB Infra 2nd Co., Ltd. 1	Korea	—	December		(26,231	)		—	Asset-backed securitization
Newstar Sina Co., Ltd. 1	Korea	—	December		(293,262	)		—	Asset-backed securitization
KB Gold 1st Co.,Ltd. 1	Korea	—	December		786,223			—	Asset-backed securitization
Able MK 1st co.ltd 1	Korea	—	December		(255,688	)		—	Asset-backed securitization
Newstar Gimpo 4th Co.,Ltd. 1	Korea	—	December		(6,681,930	)		—	Asset-backed securitization
HD Value 1st Co., Ltd. 1	Korea	—	December		(12,873	)		—	Asset-backed securitization
Powerplay 1st Co., Ltd. 1	Korea	—	December		202,235			—	Asset-backed securitization
Able Dosan 1st Co., Ltd 1	Korea	—	December		916,396			—	Asset-backed securitization
Able Maseok 1st Co., Ltd. 1	Korea	—	December		(1,873,992	)		—	Asset-backed securitization
TW Seocho 1st Co., Ltd. 1	Korea	—	December		(3,797,995	)		—	Asset-backed securitization
TW Seocho 2nd Co., Ltd. 1	Korea	—	December		(749,366	)		—	Asset-backed securitization
Newstar Wave 1st Co., Ltd. 1	Korea	—	December		(3,080,973	)		—	Asset-backed securitization
Lamdamine 1st Co.,Ltd 1	Korea	—	December		(4,807,884	)		—	Asset-backed securitization
Able Next 1st Co., Ltd 1	Korea	—	December		(47,996	)		—	Asset-backed securitization
Newstar Enerbil 1st Co., Ltd. 1	Korea	—	December		(485,326	)		—	Asset-backed securitization
YSMC 1st Co., Ltd. 1	Korea	—	December		(951,338	)		—	Asset-backed securitization
KB SmartSchool 1st Co., Ltd. 1	Korea	—	December		585,430			—	Asset-backed securitization
Bighouse 7th Co., Ltd. 1	Korea	—	December		5,921,722			—	Asset-backed securitization
Gyeongsan Logis 1st Co., Ltd 1	Korea	—	December		169,091			—	Asset-backed securitization
Stoke 2nd Corp 1	Korea	—	December		779,732			—	Asset-backed securitization
KB Samyoung Co., Ltd. 1	Korea	—	December		148,627			—	Asset-backed securitization
Newstar Seongnam 1st Co.,Ltd 1	Korea	—	December		(922,015	)		—	Asset-backed securitization
KPS Sihwa 1st Co., Ltd. 1	Korea	—	December		(1,958,964	)		—	Asset-backed securitization
GDIC 2nd co.ltd 1	Korea	—	December		(8,094,528	)		—	Asset-backed securitization

Table of Contents

KB SECURITIES Co., Ltd.

Notes to the Separate Financial Statements

December 31, 2023 and 2022


(in thousands of Korean won)	2023
	Location		Percent age of ownership(%)	Date of financial statements 5	Net Asset			Book amount		Main Business
Newstar NRB First Co., Ltd. 1		Korea	—	December		(1,693,893	)		—		Asset-backed securitization
Able Dongtan 1st Co., Ltd. 1		Korea	—	December		(7,057,772	)		—		Asset-backed securitization
Newstar Gimpo 5th Co.,Ltd. 1		Korea	—	December		(36,105,757	)		—		Asset-backed securitization
Able Banpo 1st Co., Ltd. 1		Korea	—	December		(3,144,006	)		—		Asset-backed securitization
Able Banpo 2nd Co., Ltd. 1		Korea	—	December		(2,270,430	)		—		Asset-backed securitization
Able alpha Co., Ltd. 1,2		Korea	—	December		(343,974	)		—		Asset-backed securitization
Newstar one-firm 2023-1 3rd. Co., Ltd. 1,2		Korea	—	December		28,896			—		Asset-backed securitization
Newstar one-firm 2023-1 4th. Co., Ltd. 1,2		Korea	—	December		107,031			—		Asset-backed securitization
Newstar one-firm 2023-1 5th. Co., Ltd. 1.2		Korea	—	December		(261,762	)		—		Asset-backed securitization
K-1 23th Yeoksam Real Estate Investment Trust Company 2		Korea	60.88	December		138,339,817			46,050,000		Asset-backed securitization
French Shine 1st Co., Ltd. 1,2		Korea	—	December		(25,250	)		—		Asset-backed securitization
Able Yongdap 2nd Co., Ltd. 1,2		Korea	—	December		(91,076	)		—		Asset-backed securitization
KB Securities ESG Value Enhancement Fund 2		Korea	93.75	December		1,020,593			1,000,000		Other financial
Able Bonri 1st Co., Ltd. 1,2		Korea	—	December		1,345,461			—		Asset-backed securitization
Newstar JH Center Co., Ltd. 1,2		Korea	—	December		(38,011	)		—		Asset-backed securitization
Able TY 2nd Co., Ltd. 1.2		Korea	—	December		(3,270,012	)		—		Asset-backed securitization
Keppel Private Real Estate Investment Trust No.13 2		Korea	75.85	December		82,153,644			64,400,000		Funds
Able Eunhwasam 2nd Co., Ltd. 1,2		Korea	—	December		(3,047,739	)		—		Asset-backed securitization
Newstar Yangju Station 1st Co., Ltd. 1,2		Korea	—	December		6,699			—		Asset-backed securitization
Able Chowall 2nd Co., Ltd. 1,2		Korea	—	December		132,788			—		Asset-backed securitization
Newstar Sina 2nd Co., Ltd. 1,2		Korea	—	December		(994,226	)		—		Asset-backed securitization

									829,678,711

Associates
KB Special Purpose Acquisition Company No.21 3		Korea	0.13	November		15,827,475			10,000		SPAC
KB Special Purpose Acquisition Company No.22 3		Korea	0.19	November		10,505,498			10,000		SPAC
KB Special Purpose Acquisition Company No.25 3		Korea	0.12	November		8,412,529			5,000		SPAC
KB Special Purpose Acquisition Company No.26 3		Korea	0.09	November		10,583,516			5,000		SPAC
KB Special Purpose Acquisition Company No.27 3		Korea	0.04	November		25,704,209			5,000		SPAC
KB New Paradigm Agriculture Venture Fund		Korea	25.00	December		10,460,350			2,100,000		Investment
KB KONEX Market Vitalization Fund		Korea	23.44	December		32,567,309			615,000		Investment
KB-KDBC New Technology Business Investment Fund		Korea	33.33	December		9,093,717			1,800,000		Investment
KBTS Technology Venture Private Equity Fund 3		Korea	16.00	December		22,093,103			2,592,000		Investment
KB-SJ Tourism Venture Fund 3		Korea	18.52	December		17,505,418			4,600,000		Investment

Table of Contents

KB SECURITIES Co., Ltd.

Notes to the Separate Financial Statements

December 31, 2023 and 2022


(in thousands of Korean won)	2023
	Location	Percent age of ownership(%)	Date of financial statements 5	Net Asset		Book amount		Main Business
KB Shinjasanaubo Fund 3	Korea	14.67	December		12,040,505		1,804,000	Investment
UNION Media Commerce Fund	Korea	28.99	December		3,285,122		1,000,000	Investment
KB-Brain KOSDAQ Scale-Up Fund 3	Korea	15.96	December		14,441,479		—	Investment
KB SPROTT Renewable Private Equity Fund I 3	Korea	7.85	December		42,489,565		3,682,135	Investment
KB-Stonebridge Secondary Private Equity Fund 3	Korea	4.16	December		129,656,117		4,810,584	Investment
KB-SP Private Equity Fund IV 3	Korea	15.37	December		16,236,700		2,494,808	Investment
KB-UTC Inno-Tech Venture Fund 3	Korea	14.76	December		35,405,646		6,375,000	Investment
KB-NAU Special Situation Corporate Restructuring Private Equity Fund 3	Korea	6.00	December		145,043,886		4,786,339	Investment
KB Material and Parts No. 1 PEF 3	Korea	14.47	December		22,806,535		3,400,000	Investment
KB Global Commerce Private Equity Investment Fund 3	Korea	16.28	December		53,048,729		7,000,000	Investment
KB-KTB Technology Venture Fund 3	Korea	18.18	December		42,017,523		8,000,000	Investment
KB Bio Global Expansion Private Equity Fund No.1	Korea	39.47	December		40,267,615		15,000,000	Investment
KB Digital Platform Fund 3	Korea	16.67	December		102,743,011		18,000,000	Investment
KB-SOLIDUS Healthcare Investment Fund 3	Korea	5.10	December		44,544,473		2,383,333	Investment
KB-GeneN Medical Venture Fund 1	Korea	22.52	December		8,534,974		2,000,000	Investment
KB-BridgePole Venture Investment Fund 3	Korea	6.30	December		13,708,515		136,000	Investment
KB-Kyobo New Mobility Power Fund	Korea	28.57	December		9,176,579		3,000,000	Investment
DA-Friend Investment Fund II	Korea	27.06	December		3,427,626		987,633	Investment
Cornerstone Pentastone IV Fund	Korea	21.52	December		3,600,145		817,742	Investment
JS Private Equity Fund III	Korea	20.48	December		9,088,561		1,700,000	Investment
Mirae Asset Mobility Investment Fund I	Korea	22.99	December		8,477,062		2,000,000	Investment
KB-FT 1st Green Growth Investment Fund 3	Korea	10.34	December		18,649,437		2,000,000	Investment
THE CHAEUL FUND NO.1(formerly, SKS IB NEW M&T FUND NO.1)	Korea	31.25	December		3,111,012		1,000,000	Investment
POSITVE Sobujang Venture Fund #1	Korea	43.96	December		4,470,581		2,000,000	Investment
KB-NP Green ESG New Technology Venture Capital Fund 3	Korea	11.59	December		67,035,300		8,180,000	Investment
Hisstory 2022 Fintech Fund	Korea	34.78	December		5,571,213		2,000,000	Investment
KB Star Galaxy REIT	Korea	26.94	December		445,828,589		45,523,300	Investment
KB Bio Private Equity Investment Fund IV	Korea	24.19	December		27,985,830		7,500,000	Investment
Nextrade Co., Ltd. 3	Korea	6.64	September		138,950,321		9,700,000	Other Finance
LAKEWOOD-AVES Fund No.1	Korea	39.06	December		5,060,391		2,000,000	Investment
MW-Pyco NewWave New Technology Investment Fund 4th	Korea	51.28	December		3,831,786		2,000,000	Investment
KB-SUSUNG 1st Investment Fund 3	Korea	10.00	December		19,689,771		2,000,000	Investment
Friend 55 New Technology Business Investment Fund	Korea	53.33	December		2,217,136		1,200,000	Investment
Bitgoeul Cheomdan Green 1st Co., Ltd. 3	Korea	19.00	December		870,794		190,000	Investment
DSIP-Pharos Bioenergy Fund	Korea	34.10	December		48,262,698		4,000,000	Investment
Shinhan-Eco Venture Fund 2nd	Korea	20.00	December		9,000,360		1,825,000	Investment
Leading H2O Fund 1	Korea	48.23	December		3,087,152		1,500,000	Investment
2023 JB Newtech No.2 Fund	Korea	25.71	December		6,943,978		1,800,000	Investment
U-KB Credit No.1 Private Equity	Korea	23.26	December		20,551,019		4,813,953	Investment
KB-BridgePole Venture Investment Fund #2 3	Korea	14.29	December		10,460,612		1,500,000	Investment

Table of Contents

KB SECURITIES Co., Ltd.

Notes to the Separate Financial Statements

December 31, 2023 and 2022

(in thousands of Korean won)

2023

Location

Percent age

of
ownership(%)

Date of
financial
statements 5

Net Asset

Book amount

Main

Business

Sirius Silicon Valley I New Technology Fund

Korea

23.81

December

2,038,183

500,000

Investment

202,351,827

1,032,030,538

1	The Company has control over the special purpose entities (“SPEs”) and is exposed to variable returns. Accordingly, these SPEs are included as subsidiaries although the Company’s ownership is less than 50%.

2	Newly established in 2023 and included as subsidiaries.

3	Although the ownership of the Company is less than 20%, these are included as associates, since the Company has a significant influence over investee’s policy and operations.

4	The date is the closing date of financial statements used for the purpose of assessment of net asset value.


(in thousands of Korean won)	2022
	Location		Percent age of ownership(%)		Date of financial statements 5		Net Asset		Book amount		Main Business
Subsidiaries
KBFG Securities America Inc.		USA		100.00		December		18,041,916		17,259,715		Investment, advisory
KB Securities Hong Kong Ltd.		Hong Kong		100.00		December		239,897,905		232,643,725		Investment, advisory
KB Securities Vietnam Joint Stock Company		Vietnam		99.81		December		213,280,342		173,875,579		Investment, advisory
KB FINA Joint Stock Company		Vietnam		77.82		December		12,565,774		11,146,330		IT(Fintech)
PT. KB Valbury Sekuritas 2		Indonesia		65.00		December		74,490,022		57,221,997		Investment, advisory
KB Digital Innovation&growth New Technology Business Investment Fund1		Korea		20.00		December		8,973,047		2,000,000		Other financial
KB Pre-IPO 2nd (TCB) New Technology Business Investment Fund 1		Korea		42.86		December		29,330,303		15,000,000		Other financial
KB Global Contents Private Investment Fund 1, 2		Korea		27.27		December		16,206,667		4,500,000		Other financial
JB New Jersey Private Real Estate Fund 1		Korea		98.15		December		16,360,410		1,074,621		Funds
LB Irealand Private Real Estate Investment Trust 8		Korea		96.64		December		66,950,154		66,076,000		Funds
Pacific US BlackRock Private Placement Real Estate Fund Investment Trust No. 15		Korea		98.51		December		20,855,322		21,641,016		Funds
DAOL KTB Aircraft Private Investment Trust No.21-1		Korea		99.61		December		29,335,226		27,752,839		Funds
Vestas General Private Real Estate Fund Investment Trust No. 38		Korea		54.92		December		195,270,855		104,400,551		Funds
Mangrove Feeder Fund		Cayman Islands		92.88		December		76,046,414		71,010,090		Funds
GH Real Estate I LP		Guernsey		81.00		December		25,963,433		21,030,311		Investment
JB Dry Street Private Fund 1		Korea		100.00		December		558,206		974,200		Funds
JB Australia108 Private Fund 1		Korea		100.00		December		386,743		697,499		Funds
JB Forge Private Fund 1		Korea		100.00		December		276,586		499,062		Funds
JB Hall Street Private Fund 1		Korea		100.00		December		525,576		933,520		Funds
JB Margaret Street Private Fund 1		Korea		100.00		December		148,801		264,785		Funds
Hanwha US Equity Strategy Private Real Estate Fund 3		Korea		99.95		December		3,227,527		2,784,410		Funds
GVA Europe Pre-IPO Private Investment Trust No.1 2		Korea		66.70		December		29,960,445		20,000,000		Funds
LIFE Global Reits Pre-IPO General Private Investment Trust 1 2		Korea		99.50		December		59,684,316		59,470,000		Funds

Table of Contents

KB SECURITIES Co., Ltd.

Notes to the Separate Financial Statements

December 31, 2023 and 2022


(in thousands of Korean won)	2022
	Location	Percent age of ownership(%)	Date of financial statements 5	Net Asset			Book amount		Main Business
KB KBSTAR US Short-Term IG Corporate Bond ETF 2	Korea	59.88	December		79,716,716			50,000,000	Funds
Able Gwonseon 1st Co., Ltd. 1	Korea	—	December		(70,907	)		—	Asset-backed securitization
Paradise Yeongjong 2nd Co., Ltd. 1	Korea	—	December		(1,259,921	)		—	Asset-backed securitization
Newstar IP Co., Ltd. 1	Korea	—	December		(907,210	)		—	Asset-backed securitization
Songdo PFive 2nd Co., Ltd. 1	Korea	—	December		830,618			—	Asset-backed securitization
Newstar Gimpo 1st Co., Ltd. 1	Korea	—	December		(86,438	)		—	Asset-backed securitization
Able Gongpyeong 1st Co., Ltd. 1	Korea	—	December		31,243			—	Asset-backed securitization
Able Chowall 1st Co., Ltd. 1	Korea	—	December		(8,654	)		—	Asset-backed securitization
FN Gasan 1st Co., Ltd. 1	Korea	—	December		151,345			—	Asset-backed securitization
Newstar Believe Co., Ltd. 1	Korea	—	December		(296,886	)		—	Asset-backed securitization
ABR Joongang2 1st Co., Ltd. 1	Korea	—	December		290,572			—	Asset-backed securitization
KB Tongyoung 1st Co., Ltd. 1	Korea	—	December		(280,980	)		—	Asset-backed securitization
Able Sky 1st Co., Ltd. 1	Korea	—	December		205,106			—	Asset-backed securitization
Able Poongdong 1st Co., Ltd. 1	Korea	—	December		20,089			—	Asset-backed securitization
Able Sewoon Co., Ltd. 1	Korea	—	December		232,004			—	Asset-backed securitization
Able Gasan 1st Co., Ltd. 1	Korea	—	December		(208,595	)		—	Asset-backed securitization
Able PT 1st Co., Ltd. 1	Korea	—	December		(315,029	)		—	Asset-backed securitization
Newstar Plus 1st Co., Ltd. 1	Korea	—	December		270,056			—	Asset-backed securitization
KB MyeongJi 1st Co., Ltd. 1	Korea	—	December		98,240			—	Asset-backed securitization
Able Dangjin 1st Co., Ltd. 1	Korea	—	December		517,800			—	Asset-backed securitization
KB Osansegyo 2nd Co., Ltd. 1	Korea	—	December		(1,437	)		—	Asset-backed securitization
KB Mapo 2nd Co., Ltd. 1	Korea	—	December		(898,279	)		—	Asset-backed securitization
Able Wonchang 1st Co., Ltd. 1	Korea	—	December		(46,160	)		—	Asset-backed securitization
Zitaress 1st Co., Ltd. 1	Korea	—	December		(178,091	)		—	Asset-backed securitization
Able Beomeo-one Co., Ltd. 1	Korea	—	December		(214,104	)		—	Asset-backed securitization
KB Infra 2nd Co., Ltd. 1	Korea	—	December		313,932			—	Asset-backed securitization
Newstar Sina Co., Ltd. 1	Korea	—	December		(608,791	)		—	Asset-backed securitization
KB Gold 1st Co., Ltd. 1	Korea	—	December		15,041			—	Asset-backed securitization
Inspire Gold 2nd Co., Ltd. 1	Korea	—	December		(212,714	)		—	Asset-backed securitization
Able MK 1st Co., Ltd. 1	Korea	—	December		(101,453	)		—	Asset-backed securitization
Newstar Gimpo 4th Co., Ltd. 1, 2	Korea	—	December		(8,871	)		—	Asset-backed securitization
HD Value 1st Co., Ltd. 1, 2	Korea	—	December		(9,400	)		—	Asset-backed securitization

Table of Contents

KB SECURITIES Co., Ltd.

Notes to the Separate Financial Statements

December 31, 2023 and 2022


(in thousands of Korean won)	2022
	Location	Percent age of ownership(%)	Date of financial statements 5	Net Asset			Book amount		Main Business
Powerplay 1st Co., Ltd. 1, 2	Korea	—	December		288,040			—	Asset-backed securitization
Able Wonsi 1st Co., Ltd. 1, 2	Korea	—	December		(798,132	)		—	Asset-backed securitization
Able Dosan 1st Co., Ltd 1, 2	Korea	—	December		214,432			—	Asset-backed securitization
Newstar Gimpopoongmoo Co., Ltd. 1, 2	Korea	—	December		159,784			—	Asset-backed securitization
Able Maseok 1st Co., Ltd. 1, 2	Korea	—	December		(300,967	)		—	Asset-backed securitization
TW Seocho 1st Co., Ltd. 1, 2	Korea	—	December		(230,018	)		—	Asset-backed securitization
TW Seocho 2nd Co., Ltd. 1, 2	Korea	—	December		(349,910	)		—	Asset-backed securitization
Newstar Wave 1st Co., Ltd. 1, 2	Korea	—	December		(785,243	)		—	Asset-backed securitization
Lamdamine 1st Co., Ltd. 1, 2	Korea	—	December		(146,973	)		—	Asset-backed securitization
Able Next 1st Co., Ltd. 1, 2	Korea	—	December		(991,758	)		—	Asset-backed securitization
Able Dongil 1st Co., Ltd. 1, 2	Korea	—	December		(124,039	)		—	Asset-backed securitization
Newstar Shiny 1st Co., Ltd. 1, 2	Korea	—	December		(196,305	)		—	Asset-backed securitization
Newstar Enerbil 1st Co., Ltd. 1, 2	Korea	—	December		(182,606	)		—	Asset-backed securitization
YSMC 1st Co., Ltd. 1, 2	Korea	—	December		(892,249	)		—	Asset-backed securitization
HJ Galaxy 3rd Co., Ltd. 1, 2	Korea	—	December		229,465			—	Asset-backed securitization
KB SmartSchool 1st Co., Ltd. 1, 2	Korea	—	December		(464,566	)		—	Asset-backed securitization
Bighouse 7th Co., Ltd. 1, 2	Korea	—	December		(985,269	)		—	Asset-backed securitization
Newstar Energy 1st Co., Ltd. 1, 2	Korea	—	December		(5,618,828	)		—	Asset-backed securitization
Gyeongsan Logis 1st Co., Ltd. 1, 2	Korea	—	December		557,520			—	Asset-backed securitization
Stoke 2nd Corp 1, 2	Korea	—	December		643,798			—	Asset-backed securitization
KB Samyoung Co., Ltd. 1, 2	Korea	—	December		26,638			—	Asset-backed securitization
Newstar Seongnam 1st Co., Ltd. 1, 2	Korea	—	December		292,721			—	Asset-backed securitization
KPS Sihwa 1st Co., Ltd. 1, 2	Korea	—	December		3,569,531			—	Asset-backed securitization
KB NY 1st Co., Ltd. 1, 2	Korea	—	December		(1,707,082	)		—	Asset-backed securitization
GDIC 2nd Co., Ltd. 1, 2	Korea	—	December		(508,028	)		—	Asset-backed securitization
Newstar NRB First Co., Ltd. 1, 2	Korea	—	December		(1,808,292	)		—	Asset-backed securitization
Able Dongtan 1st Co., Ltd. 1, 2	Korea	—	December		(871,617	)		—	Asset-backed securitization
Newstar Gimpo 5th Co., Ltd. 1, 2	Korea	—	December		(1,481,018	)		—	Asset-backed securitization
Cassiopeia 1st Co., Ltd. 1, 2	Korea	—	December		(230,886	)		—	Asset-backed securitization
Able Banpo 1st Co., Ltd. 1, 2	Korea	—	December		(199,514	)		—	Asset-backed securitization
Able Banpo 2nd Co., Ltd. 1, 2	Korea	—	December		(177,437	)		—	Asset-backed securitization
Able Gyeonggi Gwangju 1st Co., Ltd. 1, 2	Korea	—	December		(380,377	)		—	Asset-backed securitization

Table of Contents

KB SECURITIES Co., Ltd.

Notes to the Separate Financial Statements

December 31, 2023 and 2022


(in thousands of Korean won)	2022
	Location		Percent age of ownership(%)	Date of financial statements 5		Net Asset			Book amount		Main Business
Newstar Byeongjeom 1st Co., Ltd. 1, 2		Korea	—		December		(158,797	)		—		Asset-backed securitization
Piggarden 1st Co., Ltd. 1, 2		Korea	—		December		(312,498	)		—		Asset-backed securitization

										962,256,250

Associates
Wise Asset Management Co., Ltd. 3		Korea	33.00		—		—			—		Asset Mgt.
KB Special Purpose Acquisition Company No.21 4		Korea	0.13		November		20,053			10,000		SPAC
KB Special Purpose Acquisition Company No.22 4		Korea	0.19		November		19,767			10,000		SPAC
KB Special Purpose Acquisition Company No.23 4		Korea	0.08		November		10,060			5,000		SPAC
KB Special Purpose Acquisition Company No.24 4		Korea	1.67		November		57,197			25,000		SPAC
KB New Paradigm Agriculture Venture Fund		Korea	25.00		December		2,976,845			2,100,000		Investment
KB KONEX Market Vitalization Fund		Korea	23.44		December		7,301,375			615,000		Investment
KB-KDBC New Technology Business Investment Fund		Korea	33.33		December		2,988,748			1,800,000		Investment
KBTS Technology Venture Private Equity Fund 4		Korea	16.00		December		3,941,180			2,784,000		Investment
KB-SJ Tourism Venture Fund 4		Korea	18.52		December		3,773,125			4,600,000		Investment
KB Shinjasanaubo Fund 4		Korea	14.67		December		1,810,764			1,804,000		Investment
UNION Media Commerce Fund		Korea	28.99		December		956,728			1,000,000		Investment
KB-Brain KOSDAQ Scale-Up Fund 4		Korea	15.96		December		6,675,432			4,950,000		Investment
KB SPROTT Renewable Private Equity Fund I 4		Korea	7.69		December		3,374,650			3,682,135		Investment
KB-Stonebridge Secondary Private Equity Fund 4		Korea	4.16		December		7,184,026			6,800,355		Investment
KB-SP Private Equity Fund IV 4		Korea	14.95		December		1,892,224			6,100,000		Investment
KB-UTC Inno-Tech Venture Fund 4		Korea	14.76		December		6,393,024			7,125,000		Investment
KB-NAU Special Situation Corporate Restructuring Private Equity Fund 4		Korea	6.00		December		6,276,963			5,003,207		Investment
December & Company Inc. 4		Korea	16.73		December		3,735,016			21,838,134		System software development
KB Material and Parts No. 1 PEF 4		Korea	14.47		December		3,320,638			3,400,000		Investment
KB Global Commerce Private Equity Investment Fund 4		Korea	16.28		December		6,219,107			7,000,000		Investment
KB-KTB Technology Venture Fund 4		Korea	18.18		December		5,806,248			6,000,000		Investment
KB Bio Global Expansion Private Equity Fund No.1		Korea	39.47		December		15,779,019			15,000,000		Investment
KB Digital Platform Fund 4		Korea	16.67		December		9,055,919			9,500,000		Investment
KB-SOLIDUS Healthcare Investment Fund 4		Korea	4.90		December		1,036,176			1,100,000		Investment
KB-GeneN Medical Venture Fund 1		Korea	22.52		December		1,964,512			2,000,000		Investment
KB-BridgePole Venture Investment Fund 4		Korea	6.30		December		834,741			850,000		Investment
KB-Kyobo New Mobility Power Fund		Korea	28.57		December		2,826,264			3,000,000		Investment
DA-Friend Investment Fund II		Korea	27.06		December		948,652			987,633		Investment
Cornerstone Pentastone IV Fund		Korea	21.52		December		792,174			817,742		Investment
SKS-VLP Fund No.2		Korea	23.11		December		1,121,400			1,155,560		Investment
JS Private Equity Fund III		Korea	20.48		December		1,664,180			1,700,000		Investment
Mirae Asset Mobility Investment Fund I		Korea	22.99		December		1,979,241			2,000,000		Investment

Table of Contents

KB SECURITIES Co., Ltd.

Notes to the Separate Financial Statements

December 31, 2023 and 2022


(in thousands of Korean won)	2022
	Location	Percent age of ownership(%)	Date of financial statements 5		Net Asset		Book amount		Main Business
KB-FT 1st Green Growth Investment Fund 4	Korea	10.34		December		1,969,650		2,000,000	Investment
THE CHAEUL FUND NO.1(former SKS IB NEW M&T FUND NO.1)	Korea	31.25		December		989,491		1,000,000	Investment
POSITIVE Sobujang Venture Fund No.1	Korea	43.96		December		1,977,209		2,000,000	Investment
KB-NP Green ESG New Technology Venture Capital Fund 4	Korea	11.59		December		3,617,183		3,740,000	Investment
Hisstory 2022 Fintech Fund	Korea	34.78		December		1,980,701		2,000,000	Investment
PEBBLES-MW M·C·E New Technology Investment Fund 1st	Korea	23.26		December		1,981,813		2,000,000	Investment
KB Star REIT	Korea	26.94		December		136,323,142		45,523,300	Investment
KB Bio Private Equity Investment Fund IV	Korea	24.19		December		7,492,209		7,500,000	Investment
Nextrade Co., Ltd. 4	Korea	6.64		December		9,700,000		9,700,000	Other Finance

								200,226,066

								1,162,482,316

1	The Company has control over the special purpose entities (“SPEs”) and is exposed to variable returns. Accordingly, these SPEs are included as subsidiaries although the Company’s ownership is less than 50%.

2	Newly established in 2022 and included as subsidiaries.

3	The Company recognized the entire book amount as a loss before the year ended December 31, 2022, as loss was expected. Disposal of securities are restricted due to stock lock-up requirements.

4	Although the ownership of the Company is less than 20%, these are included as associates, since the Company has a significant influence over investee’s policy and operations.

5	The date is the closing date of financial statements used for the purpose of assessment of net asset value.

Changes in investments in subsidiaries for the years ended December 31, 2023 and 2022, are as follows:


	2023
(in thousands of Korean won)	Beginning balance		Acquisition		Disposal			Impaired			Re-classification 1		Others		Ending balance
KBFG Securities America Inc.		17,259,715		—		—			—			—		—		17,259,715
KB Securities Hong Kong Ltd.		232,643,725		—		—			—			—		3,152,058		235,795,783
KB Securities Vietnam Joint Stock Company		173,875,579		—		—			—			—		—		173,875,579
KB FINA Joint Stock Company		11,146,330		—		—			—			—		—		11,146,330
PT. KB Valbury Sekuritas		57,221,997		—		—			—			—		—		57,221,997
KB Digital Innovation&growth New Technology Business Investment Fund		2,000,000		—		—			—			—		—		2,000,000
KB Pre-IPO 2nd (TCB) New Technology Business Investment Fund		15,000,000		—		(450,000	)		—			—		—		14,550,000
JB New Jersey Private Real Estate Fund 1		1,074,621		—		—			—			—		—		1,074,621
LB Irealand Private Real Estate Investment Trust 8		66,076,000		—		—			(66,076,000	)		—		—		—
Pacific US BlackRock Private Placement Real Estate Fund Investment Trust No. 15		21,641,016		—		(3,883,952	)		—			—		—		17,757,064

Table of Contents

KB SECURITIES Co., Ltd.

Notes to the Separate Financial Statements

December 31, 2023 and 2022


	2023
(in thousands of Korean won)	Beginning balance		Acquisition		Disposal			Impaired			Re-classification 1			Others		Ending balance
DAOL KTB Aircraft Private Investment Trust No.21-1		27,752,839		—		(27,752,839	)		—			—			—		—
Vestas Qualified Investors’ Private Real Estate Fund Investment Trust No. 38		104,400,551		—		—			(102,767,422	)		—			—		1,633,129
Mangrove Feeder Fund		71,010,090		—		(37,620,511	)		—			—			727,441		34,117,020
GH Real Estate I LP		21,030,311		—		—			1,058,949			—			—		22,089,260
JB Dry Street Private Fund 1		974,200		—		(734,280	)		—			—			—		239,920
JB Australia108 Private Fund 1		697,499		—		(531,652	)		—			—			—		165,847
JB Forge Private Fund 1		499,062		—		(380,598	)		—			—			—		118,464
JB Hall Street Private Fund 1		933,520		—		(688,193	)		—			—			—		245,327
JB Margaret Street Private Fund 1		264,785		—		(196,130	)		—			—			—		68,655
Hanwha US Equity Strategy Private Real Estate Fund 3		2,784,410		—		(2,784,410	)		—			—			—		—
KB Global Contents Private Investment Fund		4,500,000		—		—			—			—			—		4,500,000
GVA Europe Pre-IPO Private Investment Trust No.1		20,000,000		—		—			—			—			—		20,000,000
LIFE Global Reits Pre-IPO General Private Investment Trust 1		59,470,000		—		—			—			—			—		59,470,000
Star-Lord AlphaFlux General Investors Private Real Estate Investment Company No.11		—		44,900,000		—			—			—			—		44,900,000
KB KBSTAR US Short- Term IG Corporate Bond ETF 1		50,000,000		—		(20,000,000	)		—			(30,000,000	)		—		—
K-1 23th Yeoksam Real Esstae Investment Trust Company		—		46,050,000		—			—			—			—		46,050,000
KB Securities ESG Value Enhancement Fund		—		1,000,000		—			—			—			—		1,000,000
Keppel Private Real Estate Investment Trust No.13		—		69,400,000		(5,000,000	)		—			—			—		64,400,000

		962,256,250		161,350,000		(100,022,565	)		(167,784,473	)		(30,000,000	)		3,879,499		829,678,711

1	These instruments are reclassified to financial assets measured at FVTPL during the year ended December 31, 2023 .


	2022
(in thousands of Korean won)	Beginning balance		Acquisition		Disposal		Impaired		Re-classification 1		Others		Ending balance
KBFG Securities America Inc.		17,259,715		—		—		—		—		—		17,259,715
KB Securities Hong Kong Ltd.		219,432,709		—		—		—		—		13,211,016		232,643,725
KB Securities Vietnam Joint Stock Company		173,875,579		—		—		—		—		—		173,875,579
KB FINA Joint Stock Company		11,146,330		—		—		—		—		—		11,146,330

Table of Contents

KB SECURITIES Co., Ltd.

Notes to the Separate Financial Statements

December 31, 2023 and 2022


	2022
(in thousands of Korean won)	Beginning balance		Acquisition		Disposal			Impaired			Re-classification 1			Others		Ending balance
PT. KB Valbury Sekuritas		—		57,221,997		—			—			—			—		57,221,997
KB Digital Innovation&growth New Technology Business Investment Fund		2,000,000		—		—			—			—			—		2,000,000
KB Pre-IPO 2nd (TCB) New Technology Business Investment Fund		15,000,000		—		—			—			—			—		15,000,000
JB New Jersey Private Real Estate Fund 1		1,074,621		—		—			—			—			—		1,074,621
Heungkuk Global Highclass Private Real Estate Trust 23		1,903,215		—		(1,903,215	)		—			—			—		—
DGB General Private Real Estate Investment Trust No.8		6,967,178		—		(6,967,178	)		—			—			—		—
LB Irealand Private Real Estate Investment Trust 8		66,076,000		—		—			—			—			—		66,076,000
Pacific US BlackRock Private Placement Real Estate Fund Investment Trust No. 15		18,697,397		3,142,188		(198,569	)		—			—			—		21,641,016
DAOL KTB Aircraft Private Investment Trust No.21- 1		27,752,839		—		—			—			—			—		27,752,839
Vestas General Private Real Estate Fund Investment Trust No. 38		93,059,747		11,340,804		—			—			—			—		104,400,551
Mangrove Feeder Fund		67,008,400		—		—			—			—			4,001,690		71,010,090
GH Real Estate I LP		21,031,909		—		—			(1,598	)		—			—		21,030,311
JB Dry Street Private Fund 1		1,060,697		—		(86,497	)		—			—			—		974,200
JB Australia108 Private Fund 1		759,207		—		(61,708	)		—			—			—		697,499
JB Forge Private Fund 1		543,244		—		(44,182	)		—			—			—		499,062
JB Hall Street Private Fund 1		1,016,152		—		(82,632	)		—			—			—		933,520
JB Margaret Street Private Fund 1		288,186		—		(23,401	)		—			—			—		264,785
LB UK Private Real Estate Investment Trust No.18 1		34,500,000		—		(28,941,213	)		—			(5,558,787	)		—		—
Alpha Spain Real Estate Private Investment Trust 1		67,622,466		—		(67,622,466	)		—			—			—		—
Hanwha US Equity Strategy Private Real Estate Fund 3		183,669,714		—		(180,885,304	)		—			—			—		2,784,410
Korea Investment US Amazon Logistics Private Real Estate Investment Trust NO. 1 1		—		20,900,000		(20,800,000	)		—			(100,000	)		—		—
GVA Europe Real Estate Investment Trust No.2		—		95,000,000		(95,000,000	)		—			—			—		—
KB Global Contents Private Investment Fund		—		4,500,000		—			—			—			—		4,500,000

Table of Contents

KB SECURITIES Co., Ltd.

Notes to the Separate Financial Statements

December 31, 2023 and 2022


	2022
(in thousands of Korean won)	Beginning balance		Acquisition		Disposal			Impaired			Re-classification 1			Others		Ending balance
GVA Europe Pre-IPO Private Investment Trust No.1		—		20,000,000		—			—			—			—		20,000,000
LIFE Global Reits Pre- IPO General Private Investment Trust 1		—		59,470,000		—			—			—			—		59,470,000
KB KBSTAR US Short- Term IG Corporate Bond ETF		—		50,000,000		—			—			—			—		50,000,000
KB Wisestar Private Real Estate Fund Investment Trust No. 2 1		—		67,100,000		—			—			(67,100,000	)		—		—

		1,031,745,305		388,674,989		(402,616,365	)		(1,598	)		(72,758,787	)		17,212,706		962,256,250

1	These instruments are reclassified to financial assets measured at FVTPL during the year ended December 31, 2022 .

Changes in investment in associates for the years ended December 31, 2023 and 2022, are as follows:


	2023
(in thousands of Korean won)	Beginning balance		Acquisition		Disposal			Impaired			Re-classification1		Ending balance
KB Special Purpose Acquisition Company No.21		10,000		—		—			—			—		10,000
KB Special Purpose Acquisition Company No.22		10,000		—		—			—			—		10,000
KB Special Purpose Acquisition Company No.23		5,000		—		(5,000	)		—			—		—
KB Special Purpose Acquisition Company No.24		25,000		—		(25,000	)		—			—		—
KB Special Purpose Acquisition Company No.25		—		5,000		—			—			—		5,000
KB Special Purpose Acquisition Company No.26		—		5,000		—			—			—		5,000
KB Special Purpose Acquisition Company No.27		—		5,000		—			—			—		5,000
KB New Paradigm Agriculture Venture Fund		2,100,000		—		—			—			—		2,100,000
KB KONEX Market Vitalization Fund		615,000		—		—			—			—		615,000
KB-KDBC New Technology Business Investment Fund		1,800,000		—		—			—			—		1,800,000
KBTS Technology Venture Private Equity Fund		2,784,000		—		(192,000	)		—			—		2,592,000
KB-SJ Tourism Venture Fund		4,600,000		—		—			—			—		4,600,000
KB Shinjasanaubo Fund		1,804,000		—		—			—			—		1,804,000
UNION Media Commerce Fund		1,000,000		—		—			—			—		1,000,000
KB-Brain KOSDAQ Scale-Up Fund		4,950,000		—		(4,950,000	)		—			—		—
KB SPROTT Renewable Private Equity Fund I		3,682,135		—		—			—			—		3,682,135
KB-Stonebridge Secondary Private Equity Fund		6,800,355		—		(1,989,771	)		—			—		4,810,584
KB-SP Private Equity Fund IV		6,100,000		—		—			(3,605,192	)		—		2,494,808
KB-UTC Inno-Tech Venture Fund		7,125,000		—		(750,000	)		—			—		6,375,000

Table of Contents

KB SECURITIES Co., Ltd.

Notes to the Separate Financial Statements

December 31, 2023 and 2022


KB-NAU Special Situation Corporate Restructuring Private Equity Fund	5,003,207	900,000	(1,116,868	)	—		—		4,786,339
December & Company Inc.	21,838,134	—	(1,502,531	)	(19,171,095	)	(1,164,508	)	—
KB Material and Parts No. 1 PEF 1	3,400,000	—	—		—		—		3,400,000
KB Global Commerce Private Equity Investment Fund	7,000,000	—	—		—		—		7,000,000
KB-KTB Technology Venture Fund	6,000,000	2,000,000	—		—		—		8,000,000
KB Bio Global Expansion Private Equity Fund No.1	15,000,000	—	—		—		—		15,000,000
KB Digital Platform Fund	9,500,000	8,500,000	—		—		—		18,000,000
KB-SOLIDUS Healthcare Investment Fund	1,100,000	1,283,333	—		—		—		2,383,333
KB-GeneN Medical Venture Fund 1	2,000,000	—	—		—		—		2,000,000
KB-BridgePole Venture Investment Fund	850,000	—	(714,000	)	—		—		136,000
KB-Kyobo New Mobility Power Fund	3,000,000	—	—		—		—		3,000,000
DA-Friend Investment Fund II	987,633	—	—		—		—		987,633
Cornerstone Pentastone IV Fund	817,742	—	—		—		—		817,742
SKS-VLP Fund No.2	1,155,560	—	(1,155,560	)	—		—		—
JS Private Equity Fund III	1,700,000	—	—		—		—		1,700,000
Mirae Asset Mobility Investment Fund I	2,000,000	—	—		—		—		2,000,000
KB-FT 1st Green Growth Investment Fund	2,000,000	—	—		—		—		2,000,000
THE CHAEUL FUND NO.1(formerly, SKS IB NEW M&T FUND NO.1)	1,000,000	—	—		—		—		1,000,000
POSITVE Sobujang Venture Fund #1	2,000,000	—	—		—		—		2,000,000
KB-NP Green ESG New Technology Venture Capital Fund	3,740,000	4,440,000	—		—		—		8,180,000
Hisstory 2022 Fintech Fund	2,000,000	—	—		—		—		2,000,000
PEBBLES-MW M.C.E New Technology Investment Fund 1st	2,000,000	—	(2,000,000	)	—		—		—
KB Star Galaxy REIT	45,523,300	—	—		—		—		45,523,300
KB Bio Private Equity Investment Fund IV	7,500,000	—	—		—		—		7,500,000
Nextrade Co., Ltd.	9,700,000	—	—		—		—		9,700,000
LAKEWOOD-AVES Fund No.1	—	2,000,000	—		—		—		2,000,000
MW-Pyco NewWave New Technology Investment Fund 4th	—	2,000,000	—		—		—		2,000,000
KB-SUSUNG 1st Investment Fund	—	2,000,000	—		—		—		2,000,000
Friend 55 New Technology Business Investment Fund	—	1,200,000	—		—		—		1,200,000
Bitgoeul Cheomdan Green 1st Co., Ltd.	—	190,000	—		—		—		190,000
DSIP-Pharos Bioenergy Fund	—	4,000,000	—		—		—		4,000,000
Shinhan-Eco Venture Fund 2nd	—	1,825,000	—		—		—		1,825,000
Leading H2O Fund 1	—	1,500,000	—		—		—		1,500,000
2023 JB Newtech No.2 Fund	—	1,800,000	—		—		—		1,800,000

Table of Contents

KB SECURITIES Co., Ltd.

Notes to the Separate Financial Statements

December 31, 2023 and 2022


U-KB Credit No.1 Private Equity	—	4,813,953	—		—		—		4,813,953
KB-BridgePole Venture Investment Fund #2	—	1,500,000	—		—		—		1,500,000
Sirius Silicon Valley I New Technology Fund	—	500,000	—		—		—		500,000

	200,226,066	40,467,286	(14,400,730	)	(22,776,287	)	(1,164,508	)	202,351,827

1	These instruments are reclassified from financial assets measured at FVTPL for the year ended December 31, 2023 .


	2022
(in thousands of Korean won)	Beginning balance		Acquisition		Disposal			Impaired			Re-classfification1		Ending balance
KB Special Purpose Acquisition Company No.17		500		—		(500	)		—			—		—
KB Special Purpose Acquisition Company No.18		1,000		—		(1,000	)		—			—		—
KB Special Purpose Acquisition Company No.19		1,000		—		(1,000	)		—			—		—
KB Special Purpose Acquisition Company No.20		1,000		—		(1,000	)		—			—		—
KB Special Purpose Acquisition Company No.21		—		10,000		—			—			—		10,000
KB Special Purpose Acquisition Company No.22		—		10,000		—			—			—		10,000
KB Special Purpose Acquisition Company No.23		—		5,000		—			—			—		5,000
KB Special Purpose Acquisition Company No.24		—		25,000		—			—			—		25,000
KB New Paradigm Agriculture Venture Fund		2,725,000		—		(625,000	)		—			—		2,100,000
KB KONEX Market Vitalization Fund		615,000		—		—			—			—		615,000
KB-KDBC New Technology Business Investment Fund		4,400,000		—		(2,600,000	)		—			—		1,800,000
KBTS Technology Venture Private Equity Fund		4,080,000		—		(1,296,000	)		—			—		2,784,000
KB-SJ Tourism Venture Fund		5,000,000		—		(400,000	)		—			—		4,600,000
KB Shinjasanaubo Fund		1,936,000		—		(132,000	)		—			—		1,804,000
UNION Media Commerce Fund		1,000,000		—		—			—			—		1,000,000
KB-Brain KOSDAQ Scale-Up Fund		9,750,000		—		(4,800,000	)		—			—		4,950,000
KB SPROTT Renewable Private Equity Fund I		1,182,775		2,499,360		—			—			—		3,682,135
KB-Stonebridge Secondary Private Equity Fund		6,183,416		1,248,439		(631,500	)		—			—		6,800,355
KB-SP Private Equity Fund IV		6,100,000		—		—			—			—		6,100,000
KB-UTC Inno-Tech Venture Fund		7,125,000		—		—			—			—		7,125,000
KB-NAU Special Situation Corporate Restructuring Private Equity Fund		6,696,000		660,000		(2,352,793	)		—			—		5,003,207
Project Vanilla Co., Ltd.		525,344		—		(525,344	)		—			—		—
December & Company Inc.		30,000,000		—		—			(8,161,866	)		—		21,838,134
KB Material and Parts No. 1 PEF		3,400,000		—		—			—			—		3,400,000
KB Bio Private Equity Fund III Ltd.		10,000,000		—		(10,000,000	)		—			—		—
KB Global Commerce Private Equity Investment Fund		7,000,000		—		—			—			—		7,000,000

Table of Contents

KB SECURITIES Co., Ltd.

Notes to the Separate Financial Statements

December 31, 2023 and 2022


KB-KTB Technology Venture Fund	2,000,000	4,000,000	—		—		—	6,000,000
KB Bio Global Expansion Private Equity Fund No.1	15,000,000	—	—		—		—	15,000,000
KB Digital Platform Fund	4,500,000	5,000,000	—		—		—	9,500,000
KB-SOLIDUS Healthcare Investment Fund	100,000	1,000,000	—		—		—	1,100,000
KB-GeneN Medical Venture Fund 1	—	2,000,000	—		—		—	2,000,000
KB-BridgePole Venture Investment Fund	—	850,000	—		—		—	850,000
KB-Kyobo New Mobility Power Fund	—	3,000,000	—		—		—	3,000,000
DA-Friend Investment Fund II 1	—	—	—		—		987,633	987,633
Cornerstone Pentastone IV Fund 1	—	—	—		—		817,742	817,742
SKS-VLP Fund No.2 1	—	—	—		—		1,155,560	1,155,560
JS Private Equity Fund III	—	1,700,000	—		—		—	1,700,000
Mirae Asset Mobility Investment Fund I	—	2,000,000	—		—		—	2,000,000
KB-FT 1st Green Growth Investment Fund	—	2,000,000	—		—		—	2,000,000
THE CHAEUL FUND NO.1(former SKS IB NEW M&T FUND NO.1)	—	1,000,000	—		—		—	1,000,000
POSITIVE Sobujang Venture Fund No.1	—	2,000,000	—		—		—	2,000,000
KB-NP Green ESG New Technology Venture Capital Fund	—	3,740,000	—		—		—	3,740,000
Hisstory 2022 Fintech Fund	—	2,000,000	—		—		—	2,000,000
PEBBLES-MW M.C.E New Technology Investment Fund 1st	—	2,000,000	—		—		—	2,000,000
KB Star REIT	—	45,523,300	—		—		—	45,523,300
KB Bio Private Equity Investment Fund IV	—	7,500,000	—		—		—	7,500,000
Nextrade Co., Ltd.	—	9,700,000	—		—		—	9,700,000

	129,322,035	99,471,099	(23,366,137	)	(8,161,866	)	2,960,935	200,226,066

1	These instruments are reclassified from financial assets measured at FVTPL for the year ended December 31, 2022 .

Table of Contents

KB SECURITIES Co., Ltd.

Notes to the Separate Financial Statements

December 31, 2023 and 2022

10. Loans Measured at Amortised Cost

The details of loans measured at amortised cost as at December 31, 2023 and 2022, are as follows:


(in thousands of Korean won)	2023									2022
(in thousands of Korean won)	Total amount			Allowances			Book amount			Total amount			Allowances			Book amount
Retails
Broker’s loans		3,069,936,779			—			3,069,936,779			2,670,524,438			—			2,670,524,438
Loans to employees		12,837,275			—			12,837,275			11,821,078			—			11,821,078
Present value discount		(17,803	)		—			(17,803	)		(25,619	)		—			(25,619	)

		3,082,756,251			—			3,082,756,251			2,682,319,897			—			2,682,319,897

Corporates
Broker’s loans		251,523,081			—			251,523,081			277,741,537			—			277,741,537
Securities purchased under repurchase agreements		1,369,600,000			—			1,369,600,000			730,100,000			—			730,100,000
Loans receivable		3,208,755,582			(41,135,212	)		3,167,620,370			2,789,966,306			(16,386,956	)		2,773,579,350
Purchased loans		52,226,101			(381,401	)		51,844,700			78,787,460			(3,193,805	)		75,593,655
Advances for customers		7,564,877			(7,564,877	)		—			7,564,877			(7,564,877	)		—
Privately placed bonds		30,500,000			(1,838,554	)		28,661,446			500,000			(299,446	)		200,554
Financial lease receivables		29,544,593			—			29,544,593			35,135,664			—			35,135,664
Net deferred origination fees and costs		(5,759,466	)		—			(5,759,466	)		(4,820,171	)		—			(4,820,171	)
Present value discount		(2,186,170	)		—			(2,186,170	)		(3,064,593	)		—			(3,064,593	)

		4,941,768,598			(50,920,044	)		4,890,848,554			3,911,911,080			(27,445,084	)		3,884,465,996

		8,024,524,849			(50,920,044	)		7,973,604,805			6,594,230,977			(27,445,084	)		6,566,785,893

Table of Contents

KB SECURITIES Co., Ltd.

Notes to the Separate Financial Statements

December 31, 2023 and 2022

The changes in book amount of loan measured at amortised cost for the years ended December 31, 2023 and 2022, are as follows:


(in thousands of Korean won)	2023
	Retails								Corporates
	The financial instruments applying 12-month expected credit losses		The financial instruments applying lifetime expected credit losses				The financial instruments applying credit loss model		The financial instruments applying 12-month expected credit losses			The financial instruments applying lifetime expected credit losses						The financial instruments applying credit loss model
			Non-impaired		Impaired		The financial instruments applying credit loss model					Non-impaired			Impaired			The financial instruments applying credit loss model
Beginning		2,682,319,898		—		—		—		3,893,554,296			—			18,356,784			—
Transfer between stages
Transfer to lifetime expected credit Losses (Non- impaired)		—		—		—		—		(37,901,424	)		37,901,424			—			—
Transfer to lifetime expected credit Losses (impaired)		—		—		—		—		(52,736,957	)		—			52,736,957			—
Write-off		—		—		—		—		—			—			(10,761,359	)		—
Sales		—		—		—		—		(356,502,050	)		—			—			—
Other increase /decrease, net		400,436,353		—		—		—		1,401,107,808			(981,881	)		(3,005,000	)		—

Ending		3,082,756,251		—		—		—		4,847,521,673			36,919,543			57,327,382			—


(in thousands of Korean won)	2022
	Retails									Corporates
	The financial instruments applying 12-month expected credit losses			The financial instruments applying lifetime expected credit losses				The financial instruments applying credit loss model		The financial instruments applying 12-month expected credit losses			The financial instruments applying lifetime expected credit losses					The financial instruments applying credit loss model
				Non-impaired		Impaired		The financial instruments applying credit loss model					Non-impaired		Impaired			The financial instruments applying credit loss model
Beginning		2,890,313,073			—		—		—		2,549,095,780			—		49,239,870			—
Transfer between stages
Transfer to lifetime expected credit Losses (impaired)		—			—		—		—		(6,675,000	)		—		6,675,000			—
Write-off		—			—		—		—		—			—		(33,202,354	)		—
Sales		—			—		—		—		(722,881,522	)		—		—			—
Other increase /decrease, net		(207,993,176	)		—		—		—		2,074,015,038			—		(4,355,732	)		—

Ending		2,682,319,897			—		—		—		3,893,554,296			—		18,356,784			—

Table of Contents

KB SECURITIES Co., Ltd.

Notes to the Separate Financial Statements

December 31, 2023 and 2022

The changes in allowances for loan losses for the years ended December 31, 2023 and 2022, are as follows:


(In thousands of Korean won)	2023
	Corporates
	The financial instruments applying 12-month expected credit losses			The financial instruments applying lifetime expected credit losses					The financial instruments applying credit loss model
				Non-impaired		Impaired			The financial instruments applying credit loss model
Beginning		10,696,664			—		16,748,421			—
Transfer between stages
Transfer to lifetime expected credit Losses (Non- impaired)		(90,184	)		90,184		—			—
Transfer to lifetime expected credit Losses (impaired)		(802,282	)		—		802,282			—
Write-off		—			—		(10,761,359	)		—
Sale		(736,955	)		—		—			—
Provision (reversal) for loan losses		2,034,322			11,468,096		21,470,855			—

Ending		11,101,565			11,558,280		28,260,199			—


(In thousands of Korean won)	2022
	Corporates
	The financial instruments applying 12-month expected credit losses			The financial instruments applying lifetime expected credit losses					The financial instruments applying credit loss model
				Non-impaired		Impaired			The financial instruments applying credit loss model
Beginning		9,173,399			—		49,031,507			—
Transfer between stages
Transfer to lifetime expected credit Losses (impaired)		(3,461,509	)		—		3,461,509			—
Write-off		—			—		(33,202,354	)		—
Provision (reversal) for loan losses		4,984,774			—		805,841			—
Other transfer		—			—		(3,348,083	)		—

Ending		10,696,664			—		16,748,420			—

Among the loans which have been written-off, the Company manages loans for which the claims against borrowers have not been lost due to reasons such as incomplete extinctive prescription pursuant to relevant laws and uncollected receivables after writing-off, as the written-off loans. As at December 31, 2023 and 2022, the balances of the written-off loans are 21,186,737 thousand and 9,218,967 thousand, respectively.

Broker’s loan

The Company provides loans for stock purchases with credit period of 180 days (can be extended for six times) for investors using margin transaction. As at December 31, 2023, interest rate of the loan is differentiated from 4.9% to 9.1% based on maturities, and overdue interest rate is 9.9%.

Table of Contents

KB SECURITIES Co., Ltd.

Notes to the Separate Financial Statements

December 31, 2023 and 2022

Also, as the Company operates loans secured by securities. At the initial transaction, in case of superior shares and common shares, the Company requires trading securities or cash as collateral, corresponding to 167% and 250% of the loan, respectively. Over 140% collateral of the loan is required. As at December 31, 2023, the interest rate of loans secured by securities is differentiated from Annual Percentage Rate(APR) 6.9% to 9.1% based on maturities, from APR 7.3% to 8.6% based on credit rating, and the loan with past due date is 9.9%

For margin loans to customers, trading securities or cash is required to be pledged corresponding to 140% of the loan. Because of this condition, the Company pledged securities as collateral which are purchased with the margin loans. If the value of the pledged securities do not reach to 140% of the loan, the Company requires additional cash or trading securities as collateral.

Advances for Customers

Advances for customers consist of advanced payments on loss compensation and advanced payments for others.

Advanced payments on loss compensation are the monetary amount of claim for reimbursement, paid by the Company, if any losses from embezzlement and arbitrary trading are occurred.

11. Property and Equipment

The details of property and equipment as at December 31, 2023 and 2022, are as follows:


	2023
(in thousands of Korean won)	Acquisition cost		Accumulated depreciation			Accumulated revaluation		Book amount
Land		28,369,717		—			83,580,757		111,950,474
Buildings		40,740,713		(19,791,950	)		—		20,948,763
Furniture and equipment		173,705,240		(145,107,592	)		—		28,597,648
Others		58,162,791		(46,374,171	)		—		11,788,620
Right-of-use assets		151,654,509		(91,495,514	)		—		60,158,995

		452,632,970		(302,769,227	)		83,580,757		233,444,500


	2022
(in thousands of Korean won)	Acquisition cost		Accumulated depreciation			Accumulated revaluation		Book amount
Land		28,242,445		—			83,580,757		111,823,202
Buildings		40,613,878		(18,705,038	)		—		21,908,840
Furniture and equipment		166,644,659		(134,101,041	)		—		32,543,618
Others		56,137,689		(43,986,992	)		—		12,150,697
Right-of-use assets		134,063,357		(58,683,464	)		—		75,379,893

		425,702,028		(255,476,535	)		83,580,757		253,806,250

Table of Contents

KB SECURITIES Co., Ltd.

Notes to the Separate Financial Statements

December 31, 2023 and 2022

The details of right-of-use assets as at December 31, 2023 and 2022, are as follows:


	2023
(in thousands of Korean won)	Acquisition cost		Accumulated depreciation			Book amount
Buildings		143,730,769		(87,627,963	)		56,102,806
Vehicles		4,035,307		(2,366,979	)		1,668,328
Others		3,888,433		(1,500,572	)		2,387,861

		151,654,509		(91,495,514	)		60,158,995


	2022
(in thousands of Korean won)	Acquisition cost		Accumulated depreciation			Book amount
Buildings		125,426,370		(53,310,578	)		72,115,792
Vehicles		4,039,939		(1,781,351	)		2,258,588
Others		4,597,048		(3,591,535	)		1,005,513

		134,063,357		(58,683,464	)		75,379,893

The changes in property and equipment for the years ended December 31, 2023 and 2022, are as follows:


	2023
(in thousands of Korean won)	Beginning balance		Acquisition		Disposal			Depreciation			Others 1			Ending balance
Land		111,823,202		—		—			—			127,272			111,950,474
Buildings		21,908,840		—		—			(1,005,321	)		45,244			20,948,763
Furniture and equipment		32,543,618		10,671,895		(8,908	)		(14,608,957	)		—			28,597,648
Others		12,150,697		5,086,739		(5,402	)		(5,443,414	)		—			11,788,620
Right-of-use assets		75,379,893		11,588,643		(1,658,599	)		(23,719,467	)		(1,431,475	)		60,158,995

		253,806,250		27,347,277		(1,672,909	)		(44,777,159	)		(1,258,959	)		233,444,500

1	Others consist of reclassification to investment properties and others.


	2022
(in thousands of Korean won)	Beginning balance		Acquisition		Disposal			Depreciation			Re-valuation		Others 1		Ending balance
Land		65,029,822		—		(1,115,081	)		—			47,521,151		387,310		111,823,202
Buildings		23,398,034		—		(543,148	)		(1,007,299	)		—		61,253		21,908,840
Furniture and equipment		31,344,696		15,914,642		(5,231	)		(14,710,489	)		—		—		32,543,618
Others		13,221,419		6,364,691		(97,415	)		(7,337,998	)		—		—		12,150,697
Right-of-use assets		72,426,383		30,479,675		(3,497,265	)		(24,028,900	)		—		—		75,379,893

		205,420,354		52,759,008		(5,258,140	)		(47,084,686	)		47,521,151		448,563		253,806,250

1	Others consist of reclassification to investment properties and others.

Table of Contents

KB SECURITIES Co., Ltd.

Notes to the Separate Financial Statements

December 31, 2023 and 2022

The changes in right-of-use assets for the year ended December 31, 2023 and 2022, are as follows:


	2023
(in thousands of Korean won)	Beginning balance		Acquisition		Disposal			Depreciation			Others 1			Ending balance
Buildings		72,115,792		7,932,226		(1,450,914	)		(21,391,701	)		(1,102,597	)		56,102,806
Vehicles		2,258,588		1,246,881		(207,685	)		(1,319,688	)		(309,768	)		1,668,328
Others		1,005,513		2,409,536		—			(1,008,078	)		(19,110	)		2,387,861

		75,379,893		11,588,643		(1,658,599	)		(23,719,467	)		(1,431,475	)		60,158,995

1	Others consist of transfer to lease and others.


	2022
(in thousands of Korean won)	Beginning balance		Acquisition		Disposal			Depreciation			Ending balance
Buildings		69,145,814		27,808,891		(3,080,026	)		(21,758,887	)		72,115,792
Vehicles		1,570,194		2,291,705		(414,828	)		(1,188,483	)		2,258,588
Others		1,710,375		379,079		(2,411	)		(1,081,530	)		1,005,513

		72,426,383		30,479,675		(3,497,265	)		(24,028,900	)		75,379,893

The Company applies the revaluation model in relation to the measurement after the initial recognition of the land and the date of revaluation of the land was August 5, 2022. The Company used the assessed price provided by qualified appraiser for the revaluation of the land.

Classification of land that is measured at fair value by fair value hierarchy levels as at December 31, 2023 and 2022, are as follows:


	2023
(in thousands of Korean won)	Level 1		Level 2		Level 3		Total
Land		—		—		111,950,474		111,950,474

	2022
(in thousands of Korean won)	Level 1		Level 2		Level 3		Total
Land		—		—		111,823,202		111,823,202

Table of Contents

KB SECURITIES Co., Ltd.

Notes to the Separate Financial Statements

December 31, 2023 and 2022

Changes in land which is classified to Level 3 for the years ended December 31, 2023 and 2022, are as follows:


(in thousands of Korean won)	2023		2022
Beginning balance		111,823,202		65,029,822
Reclassification to property and equipment		127,272		387,310
Reclassification to investment properties		—		—
Disposal		—		(1,115,081	)
Changes in fair-value		—		47,521,151

Ending balance		111,950,474		111,823,202

Book amounts of land under cost model as at December 31, 2023 and 2022, are as follows:


	2023				2022
(in thousands of Korean won)	Under revaluation model		Under cost model		Under revaluation model		Under cost model
Land		111,950,474		28,369,717		111,823,202		28,242,445

Changes in other comprehensive income related to the revaluation for the years ended December 31, 2023 and 2022, are as follows:


	2023
(in thousands of Korean won)	Beginning balance			Other		Ending balance
Land		84,032,663			—		84,032,663
Income tax effects		(22,366,410	)		84,033		(22,282,377	)

After income tax		61,666,253			84,033		61,750,286


	2022
(in thousands of Korean won)	Beginning balance			Re-classification			Ending balance
Land		36,132,407			47,900,256			84,032,663
Income tax effects		(10,034,165	)		(12,332,245	)		(22,366,410	)

After income tax		26,098,242			35,568,011			61,666,253

Table of Contents

KB SECURITIES Co., Ltd.

Notes to the Separate Financial Statements

December 31, 2023 and 2022

12. Investment Properties

The details of investment properties as at December 31, 2023 and 2022, are as follows:


	2023
(in thousands of Korean won)	Acquisition cost		Accumulated depreciation			Accumulated revaluation			Book amount
Land		8,671,749		—			(332,251	)		8,339,498
Buildings		15,176,289		(9,411,664	)		—			5,764,625

		23,848,038		(9,411,664	)		(332,251	)		14,104,123


	2022
(in thousands of Korean won)	Acquisition cost		Accumulated depreciation			Accumulated revaluation			Book amount
Land		8,799,021		—			(332,251	)		8,466,770
Buildings		15,303,124		(9,110,040	)		—			6,193,084

		24,102,145		(9,110,040	)		(332,251	)		14,659,854

The changes in investment properties for the years ended December 31, 2023 and 2022, are as follows:


	2023
(in thousands of Korean won)	Beginning balance		Disposal			Depreciation			Re-classification			Ending balance
Land		8,466,770		—			—			(127,272	)		8,339,498
Buildings		6,193,084		—			(383,216	)		(45,243	)		5,764,625

		14,659,854		—			(383,216	)		(172,515	)		14,104,123


	2022
(in thousands of Korean won)	Beginning balance		Disposal			Depreciation			Re-classification			Ending balance
Land		10,028,459		(1,174,378	)		—			(387,311	)		8,466,770
Buildings		7,726,518		(1,053,788	)		(418,394	)		(61,252	)		6,193,084

		17,754,977		(2,228,166	)		(418,394	)		(448,563	)		14,659,854

Details of income and expenditure on investment properties for the years ended December 31, 2023 and 2022, are as follows:


(in thousands of Korean won)	2023			2022
Rental income		1,939,106			1,812,717
Expenditure on operating investment properties		(1,038,663	)		(970,252	)
Expenditure on non-operating investment properties		(1,939	)		(32,508	)

		898,504			809,957

Table of Contents

KB SECURITIES Co., Ltd.

Notes to the Separate Financial Statements

December 31, 2023 and 2022

Details of fair value of investment properties as at December 31, 2023 and 2022 are as follows:


	2023				2022
(in thousands of Korean won)	Book amount		Fair value		Book amount		Fair value
Land		8,339,498		46,547,855		8,466,770		47,402,527
Buildings		5,764,625		8,389,170		6,193,084		8,444,966

		14,104,123		54,937,025		14,659,854		55,847,493

The fair values of investment properties as at December 31, 2023 was evaluated by an independent appraiser, based on the evaluation result at August 5, 2022. The qualified appraiser is a member of the Korea Appraisers Association and has appropriate qualifications and experience in evaluating real estate in the location of investment properties. This evaluation was based on international evaluation standards and is based on the market price of similar real estate.

The fair values of investment properties are classified as Level 3 based upon the inputs, which are used in valuation method.

Investment properties are provided as collaterals for rental deposits and lease hold right, which amount to 610,000 thousand and 610,000 thousand as at December 31, 2023 and 2022, respectively.

13. Intangible Assets

The details of intangible assets as at December 31, 2023 and 2022, are as follows:


	2023
(in thousands of Korean won)	Acquisition cost		Accumulated amortization			Accumulated impairment			Book amount
Goodwill		58,888,990		—			—			58,888,990
Development costs		271,791,803		(167,392,492	)		—			104,399,311
Software		124,767,737		(100,721,088	)		—			24,046,649
Memberships		42,759,695		(133,491	)		(7,983,800	)		34,642,404
Others		23,294,717		—			—			23,294,717

		521,502,942		(268,247,071	)		(7,983,800	)		245,272,071


	2022
(in thousands of Korean won)	Acquisition cost		Accumulated amortization			Accumulated impairment			Book amount
Goodwill		58,888,990		—			—			58,888,990
Development costs		186,869,610		(139,522,251	)		—			47,347,359
Software		117,345,440		(89,018,725	)		—			28,326,715
Memberships		37,615,266		(115,840	)		(9,866,646	)		27,632,780
Others		23,294,717		—			—			23,294,717

		424,014,023		(228,656,816	)		(9,866,646	)		185,490,561

Table of Contents

KB SECURITIES Co., Ltd.

Notes to the Separate Financial Statements

December 31, 2023 and 2022

The changes in intangible assets for the years ended December 31, 2023 and 2022, are as follows:


	2023
(in thousands of Korean won)	Beginning balance		Acquisition1		Disposal			Amortization			Impairment2			Reversal of Impairment3		Ending balance
Goodwill		58,888,990		—		—			—			—			—		58,888,990
Development costs		47,347,359		84,922,193		—			(27,870,241	)		—			—		104,399,311
Software		28,326,715		7,422,297		—			(11,702,363	)		—			—		24,046,649
Memberships		27,632,780		5,962,498		(586,929	)		(17,652	)		(74,692	)		1,726,399		34,642,404
Others		23,294,717		—		—			—			—			—		23,294,717

		185,490,561		98,306,988		(586,929	)		(39,590,256	)		(74,692	)		1,726,399		245,272,071

1	Advance payments and others transferred from other accounts are included.

2	Memberships are composed of condominium and golf memberships, which are intangible assets with indefinite useful lives. The Company recognized a impairment loss because the market price of the asset is lower than book amount as at December 31, 2023.

3	Memberships are composed of condominium and golf memberships, which are intangible assets with indefinite useful lives. The Company recognized a reversal of impairment loss because the market price of the asset is higher than book amount as at December 31, 2023.


	2022
(in thousands of Korean won)	Beginning balance		Acquisition1		Disposal			Amortization			Impairment2			Reversal of Impairment3		Ending balance
Goodwill		58,888,990		—		—			—			—			—		58,888,990
Development costs		35,653,327		29,140,791		—			(17,446,759	)		—			—		47,347,359
Software		25,476,035		12,951,582		—			(10,100,902	)		—			—		28,326,715
Memberships		27,580,308		1,745,855		(1,041,665	)		(17,652	)		(1,028,750	)		394,684		27,632,780
Others		23,294,717		—		—			—			—			—		23,294,717

		170,893,377		43,838,228		(1,041,665	)		(27,565,313	)		(1,028,750	)		394,684		185,490,561

1	Advance payments and others transferred from other accounts are included.

2	Memberships are composed of condominium and golf memberships, which are intangible assets with indefinite useful lives. The Company recognized a impairment loss because the market price of the asset is lower than book amount as at December 31, 2022.

3	Memberships are composed of condominium and golf memberships, which are intangible assets with indefinite useful lives. The Company recognized a reversal of impairment loss because the market price of the asset is higher than book amount as at December 31, 2022.

14. Other Financial Assets

The details of other financial assets as at December 31, 2023 and 2022, are as follows:


(in thousands of Korean won)	2023			2022
Other receivables		3,405,945,754			2,262,695,642
Accrued income		233,498,176			190,160,953
Accrued interest on bonds		268,457,904			148,382,124
Guarantee deposits		63,018,206			67,571,758
Other		157,061,158			67,835,435
Provision for other financial assets		(51,522,487	)		(37,655,617	)

		4,076,458,711			2,698,990,295

Table of Contents

KB SECURITIES Co., Ltd.

Notes to the Separate Financial Statements

December 31, 2023 and 2022

15. Other Assets

The details of other assets as at December 31, 2023 and 2022, are as follows:


(in thousands of Korean won)	2023		2022
Other receivables		1,117		116,417,803
Advance payments		37,346,174		47,263,896
Prepaid expenses		83,535,083		75,560,143
Prepaid value-added taxes		185,241		786,782
Others		12,848,867		3,648,511

		133,916,482		243,677,135

16. Deposit Liabilities

The details of deposit liabilities as at December 31, 2023 and 2022, are as follows:


(in thousands of Korean won)	2023		2022
Customers’ deposits
Customers’ deposits for brokerage		5,519,397,856		5,049,354,662
Customers’ deposits for exchange-traded derivatives trading		547,223,805		779,295,471
Customers’ deposits for subscription		—		904,010
Customers’ deposits for savings		5,880,012		6,445,014
Customers’ deposits for repo		61,587		61,600
Customers’ deposits for the investor of collective investment securities		249,819,423		324,357,905
Others		48,652		48,641

		6,322,431,335		6,160,467,303

Guarantee deposits
Guarantee deposits in foreign currency		395,717,894		190,255,947
Guarantee deposits in Korean won		415,758,876		468,648,375

		811,476,770		658,904,322

		7,133,908,105		6,819,371,625

Table of Contents

KB SECURITIES Co., Ltd.

Notes to the Separate Financial Statements

December 31, 2023 and 2022

17. Borrowings

The details of borrowings as at December 31, 2023 and 2022, are as follows:


(in thousands of Korean won)	2023			2022
Call money		1,240,000,000			830,000,000
Borrowings:
Borrowing from KSFC		1,262,819,934			1,244,222,242
Asset-backed short-term bonds		375,000,000			1,254,200,000
CP borrowings		3,380,000,000			1,920,000,000
Securities sold under repurchase agreements		9,036,097,623			6,231,390,409
Short-term note issued		9,587,511,022			7,249,429,201
Debentures:
Debentures		2,516,820,000			1,850,190,000
Less: discount on debentures issued		(4,361,049	)		(3,764,611	)

		27,393,887,530			20,575,667,241

The details of call money as at December 31, 2023 and 2022, are as follows:


(in thousands of Korean won)	Interest rate (%)		2023		2022
Samsung Asset Management Co., Ltd. and others		3.58~4.22		1,240,000,000		830,000,000

The details of borrowings as at December 31, 2023 and 2022, are as follows:


(in thousands of Korean won)		Interest rate (%)		2023		2022
Borrowings from KSFC	KSFC		3.90~4.49		1,262,819,934		1,244,222,242
Asset-backed short-term bonds	SK Securities Co., Ltd. and others		4.01~4.21		375,000,000		1,254,200,000
CP borrowings	Korea Investment & Securities Co., Ltd. and others		4.05~4.86		3,380,000,000		1,920,000,000

					5,017,819,934		4,418,422,242

The details of securities sold under repurchase agreements as at December 31, 2023 and 2022, are as follows:


(in thousands of Korean won)	Interest rate (%)		2023		2022
Customers		0.00~6.00		5,578,817,182		4,181,390,409
Financial institution		2.49~4.15		3,457,280,441		2,050,000,000

				9,036,097,623		6,231,390,409

The details of short-term note issued as at December 31, 2023 and 2022, are as follows:


(in thousands of Korean won)	Interest rate (%)		2023		2022
Individual		3.10~6.00		6,560,366,893		4,650,359,585
Corporate		3.05~5.45		3,027,144,129		2,599,069,616

				9,587,511,022		7,249,429,201

Table of Contents

KB SECURITIES Co., Ltd.

Notes to the Separate Financial Statements

December 31, 2023 and 2022

The details of debentures as at December 31, 2023 and 2022, are as follows:


(in thousands of Korean won)	Date issued		Maturity		Interest rate (%)		2023			2022
The 34-2nd unsecured public debenture		2018.03.09		2023.03.09		3.02		—			210,000,000
The 36-2nd unsecured public debenture		2019.04.18		2024.04.18		2.09		250,000,000			250,000,000
The 37-2nd unsecured public debenture		2019.06.14		2024.06.14		1.80		150,000,000			150,000,000
The 38-2nd unsecured public debenture		2020.06.11		2023.06.09		1.54		—			130,000,000
The 39-1st unsecured public debenture		2021.03.04		2024.03.04		1.31		110,000,000			110,000,000
The 39-2nd unsecured public debenture		2021.03.04		2026.03.04		1.70		120,000,000			120,000,000
The 40-1st unsecured public debenture		2021.04.23		2024.04.23		1.53		300,000,000			300,000,000
The 40-2nd unsecured public debenture		2021.04.23		2026.04.23		1.94		200,000,000			200,000,000
The 41-1st unsecured public debenture		2023.02.07		2025.02.07		3.88		330,000,000			—
The 41-2nd unsecured public debenture		2023.02.07		2026.02.06		3.85		210,000,000			—
The 42-1st unsecured public debenture		2023.06.26		2025.06.26		4.39		240,000,000			—
The 42-2nd unsecured public debenture		2023.06.26		2026.06.26		4.43		220,000,000			—
The 21-1 public debenture in foreign currency 1		2021.11.01		2026.11.01		2.13		386,820,000			380,190,000
Less: Discount on debentures issued								(4,361,049	)		(3,764,611	)

								2,512,458,951			1,846,425,389

1	The issuance price of this public debenture is US$ 300,000,000.

The changes in borrowings for the years ended December 31, 2023 and 2022, are as follows:


(in thousands of Korean won)	2023			2022
Beginning balance		20,575,667,241			21,994,629,818
Increase in call money		410,000,000			790,000,000
Increase in borrowings from KSFC		18,597,692			151,126,185
Increase(decrease) in asset-backed short-term bonds		(879,200,000	)		739,200,000
Increase in CP borrowings		1,460,000,000			1,920,000,000
Increase(decrease) in securities sold under repurchase agreements		2,804,707,214			(7,299,818,541	)
Increase in short-term note issued		2,338,081,821			2,774,283,871
Increase(decrease) in debentures		666,033,562			(493,754,092	)

Ending balance		27,393,887,530			20,575,667,241

Table of Contents

KB SECURITIES Co., Ltd.

Notes to the Separate Financial Statements

December 31, 2023 and 2022

18. Post-employment Benefits

18.1 Defined Benefit Plans

The details of defined benefit liabilities as at December 31, 2023 and 2022, are as follows:


(in thousands of Korean won)	2023			2022
Present value of defined benefit obligations		74,927,348			67,247,328
Fair value of plan assets		(13,270,798	)		(12,430,101	)

Net defined benefit liabilities		61,656,550			54,817,227

The changes in the defined benefit obligation for the years ended December 31, 2023 and 2022, are as follows:


(in thousands of Korean won)	2023			2022
Beginning balance		67,247,328			70,914,622
Current service cost		19,390,274			21,836,961
Past service cost		—			2,910,304
Interest cost		2,511,195			1,151,821
Remeasurements:
Actuarial gains and losses arising from changes in demographic assumptions		—			(6,811,193	)
Actuarial gains and losses arising from changes in financial assumptions		5,658,388			(13,735,991	)
Actuarial gains and losses arising from experience adjustments		1,119,181			16,604,753
Payments from plans:		(521,708	)		(8,301,323	)
Payments from the Company		(19,564,548	)		(17,440,714	)
Transfer from related companies		—			2,438,158
Transfer to related companies		(912,762	)		(370,486	)
Settlement		—			(78,335	)
Gain or loss on settlement		—			(1,871,249	)

Ending balance		74,927,348			67,247,328

The changes in the fair value of plan assets for the years ended December 31, 2023 and 2022, are as follows:


(in thousands of Korean won)	2023			2022
Beginning balance		(12,430,101	)		(15,294,733	)
Interest income		(610,329	)		(178,723	)
Remeasurements:
Return on plan assets (excluding amounts included in interest income)		35,162			157,107
Contributions by employers		(1,700,000	)		(3,347,402	)
Payments from plans:
Benefits paid		521,708			8,301,323
Settlement		—			—
Transfer from related companies		—			(2,438,159	)
Transfer to related companies		912,762			370,486

Ending balance		(13,270,798	)		(12,430,101	)

Table of Contents

KB SECURITIES Co., Ltd.

Notes to the Separate Financial Statements

December 31, 2023 and 2022

Plan assets are composed of the detail assets that have no quoted price in active market. The details of plan assets as at December 31, 2023 and 2022, are as follows:


	2023				2022
(in thousands of Korean won)	Fair value		Composition(%)		Fair value		Composition(%)
Cash and deposits		8,202,579		61.81		8,853,577		71.23
Investment funds		5,068,219		38.19		3,576,524		28.77

		13,270,798		100.00		12,430,101		100.00

Key actuarial assumptions used as at December 31, 2023 and 2022, are as follows:


	2023	2022
Discount rate	DB (including special retirement by salaries peak plan) 4.3%, Compensation promotion DC 3.7%	DB (including special retirement by salaries peak plan) 5.1%, Compensation promotion DC 5.0 %

Expected salary growth rate	DB : executives 4.9% DC: Promotion + Base up: 2.6%, Special retirement by Salaries peak plan : 4.9%	DB : executives 0% DC: Promotion + Base up: 2.3%, Special retirement by Salaries peak plan : 4.6%

The sensitivity analysis for significant actuarial assumptions used to determine the present value of the defined benefit obligation as at December 31, 2023, are as follows:


	Effect on the present value of defined benefit obligation
(in thousands of Korean won)	Changes in assumption			Increase			Decrease
Discount rate		0.50	%		(1,920,920	)		2,038,338
Expected salary growth rate1		0.50	%		1,913,283			(1,813,236	)
Retirement rate		0.50	%		(1,518,999	)		1,601,352

1	The sensitivity analysis for the expected salary growth rate is limited to special retirement by salaries peak plan and DB.

The methods and assumptions used in preparing the sensitivity analyses did not change compared to the previous period.

The effect of defined benefit plan on future cash inflows

Expected maturity analysis of undiscounted pension benefits as at December 31, 2023, is as follows:


(in thousands of Korean won)	Less than 1 year		Between 1 and 2 years		Between 2 and 5 years		Between 5 and 10 years		Over 10 years		Total
Pension benefits1		4,617,334		7,784,708		26,818,513		32,688,752		74,637,317		146,546,624

1	Fixed pension benefits of 12.9 billion under promotion compensation defined contribution plan are excluded.

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KB SECURITIES Co., Ltd.

Notes to the Separate Financial Statements

December 31, 2023 and 2022

The weighted average duration of the defined benefit obligations is 5.92 years.

Expected contribution to post-employment benefit plans for the year ending December 31, 2024 are 1,370,000 thousand.

18.2 Defined Contribution Plans

The Company recognized the expenses of 7,211,349 thousand and 9,212,523 thousand for defined contribution plans for the years ended December 31, 2023 and 2022, respectively.

19. Provisions

The details of provisions as at December 31, 2023 and 2022, are as follows:


(in thousands of Korean won)	2023		2022
Provisions for non-financial guarantees		6,414,834		1,456,106
Provisions for asset retirement obligation1		9,058,920		8,802,261
Provisions for lawsuits		111,425,114		51,221,194
Provisions for others		86,029,362		89,454,890

		212,928,230		150,934,451

1	The Company recognized the provision for asset retirement obligation in connection with the leased asset for the expenditures expected to recover the asset.

The changes in provisions for non-financial guarantees for the years ended December 31, 2023 and 2022 are as follows,


	2023
(in thousands of Korean won)	The financial instruments applying 12-month expected credit losses		The financial instruments applying lifetime expected credit losses
			Non-impaired			Impaired
Beginning		1,223,748		232,358			—
Provision for losses (reversal of provision)		4,994,143		(35,634	)		—
Other transfer (foreign exchange and other)		219		—			—

Ending		6,218,110		196,724			—


	2022
(in thousands of Korean won)	The financial instruments applying 12-month expected credit losses			The financial instruments applying lifetime expected credit losses
				Non-impaired		Impaired
Beginning		1,642,264			38,146		—
Provision for losses (reversal of provision)		(418,773	)		194,211		—
Other transfer (foreign exchange and other)		258			—		—

Ending		1,223,749			232,357		—

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KB SECURITIES Co., Ltd.

Notes to the Separate Financial Statements

December 31, 2023 and 2022

The changes in other provisions for the years ended December 31, 2023 and 2022, are as follows:


	2023
(in thousands of Korean won)	Provisions for asset retirement obligation			Provisions for lawsuits			Provisions for others			Total
Beginning		8,802,261			51,221,194			89,454,890			149,478,345
Contribution		259,114			57,194,551			8,490,000			65,943,665
Reversal		—			—			(8,100,000	)		(8,100,000	)
Use		(77,219	)		(150,631	)		(655,528	)		(883,378	)
Amortization of discounts		74,764			—			—			74,764
Other 1		—			3,160,000			(3,160,000	)		—

Ending		9,058,920			111,425,114			86,029,362			206,513,396

1	As a lawsuit was filed during the year ended December 31, 2023, the estimated loss on the sale of funds related to Lime Asset Management was replaced to provisions for lawsuits.


	2022
(in thousands of Korean won)	Provisions for asset retirement obligation			Provisions for lawsuits			Provisions for the points			Provisions for others			Total
Beginning		7,997,559			25,150,111			2,569,985			68,700,000			104,417,655
Contribution		1,026,723			25,165,908			2,451,694			33,965,528			62,609,853
Reversal		—			—			—			(4,038,034	)		(4,038,034	)
Use		(423,495	)		(1,229,477	)		(2,788,799	)		(7,037,952	)		(11,479,723	)
Amortization of discounts		201,474			—			—			—			201,474
Other 1		—			2,134,652			(2,232,880	)		(2,134,652	)		(2,232,880	)

Ending		8,802,261			51,221,194			—			89,454,890			149,478,345

1	As a lawsuit was filed during the year ended December 31, 2022, the estimated loss on the sale of funds related to Lime Asset Management was replaced to provisions for lawsuits.

20. Other Financial Liabilities

The details of other financial liabilities as at December 31, 2023 and 2022, are as follows:


(in thousands of Korean won)	2023		2022
Other payables		3,454,954,452		1,944,408,865
Accrued expenses		122,376,810		94,964,650
Financial guarantee liabilities		49,618,487		57,125,511
Provisions for financial guarantee contracts		87,624,173		16,577,411
Leasehold deposits received		8,274,358		7,940,809
Lease liabilities		97,681,939		121,082,291
Other		47,337,787		1,473,378

		3,867,868,006		2,243,572,915

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KB SECURITIES Co., Ltd.

Notes to the Separate Financial Statements

December 31, 2023 and 2022

The changes in liabilities of the provisions for financial guarantee contracts for the years ended December 31, 2023 and 2022 are as follows:


(in thousands of Korean won)	2023
	The financial instruments applying 12-month expected credit losses			The financial instruments applying lifetime expected credit losses
				Non-impaired		Impaired
Beginning		14,984,493			1,592,918		—
Transfer between stages
Transfer to lifetime expected credit Losses (Non-impaired)		(2,145,335	)		2,145,335		—
Transfer to lifetime expected credit Losses (Impaired)		(19,894	)		—		19,894
Provision (reversal)		9,061,890			62,004,766		(19,894	)

Ending		21,881,154			65,743,019		—


(in thousands of Korean won)	2022
	The financial instruments applying 12-month expected credit losses		The financial instruments applying lifetime expected credit losses
			Non-impaired		Impaired
Beginning		1,772,389		1,187,459		—
Provision		13,212,104		405,459		—

Ending		14,984,493		1,592,918		—

21. Other Liabilities

The details of other liabilities as at December 31, 2023 and 2022, are as follows:


(in thousands of Korean won)	2023		2022
Account payables		16,495,445		31,630
Accrued expenses		240,392,084		179,569,071
Accrued dividends		6,947,805		2,952,757
Advances from customers		5,602,168		5,355,119
Unearned revenue		10,300,322		185,683,671
Taxes withheld		46,567,059		42,772,294
Other long-term employee benefits		7,075,328		7,176,237
Others		2,362,726		3,783,577

		335,742,937		427,324,356

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KB SECURITIES Co., Ltd.

Notes to the Separate Financial Statements

December 31, 2023 and 2022

22. Share Capital

The details of share capital as at December 31, 2023 and 2022, are as follows:

(in thousands of Korean won, except per share)

Authorized shares

Outstanding
shares

Par value

per share

2023

2022

Ordinary share

1,000,000,000
shares

298,620,424
shares

5,000
won

1,493,102,120

There are no changes in ordinary shares for the years ended December 31, 2023 and 2022.

23. Hybrid Securities

Details of hybrid security classified as equity as of December 31, 2023 and 2022, are as follows:


(in thousands of Korean won)	Issuance date		Maturity		Interest rate (%)		2023		2022
Bond-type Hybrid Securities No.11		March 31, 2022		Permanent		4.30		208,010,652		208,010,752
Bond-type Hybrid Securities No.2		May 30, 2022		Permanent		4.80		48,170,880		48,170,780
Bond-type Hybrid Securities No.32		September 30, 2022		Permanent		5.50		249,948,780		249,948,780
Bond-type Hybrid Securities No.43		May 8, 2023		Permanent		5.35		119,963,080		—

								626,093,392		506,130,312

1	As at December 31, 2023 and 2022, among the hybrid securities issued by the Company, the balance held by KB Financial Group, a related party of the Company, is 200,000 million.

2	As at December 31, 2023 and 2022, among the hybrid securities issued by the Company, the balance held by KB Financial Group, a related party of the Company, is 230,000 million.

3	As at December 31, 2023, among the hybrid securities issued by the Company, the balance held by KB Financial Group, a related party of the Company, is 100,000 million.

The Company may extend the maturity under the same conditions at the time of maturity of the above hybrid securities, and interest payment may be deferred except in cases where a cash dividend or stock dividend has been resolved for common stock. Above hybrid securities are early redeemable by the Company after 5 years from the issuance date and each interest payment date thereafter.

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KB SECURITIES Co., Ltd.

Notes to the Separate Financial Statements

December 31, 2023 and 2022

24. Other Paid-in Capital

The details of other paid-in capital as at December 31, 2023 and 2022, are as follows:


(in thousands of Korean won)	2023			2022
Share premium 1		1,142,353,750			1,142,353,750
Gains and losses on sale of treasury share		(45,331,811	)		(45,331,811	)
Other equity 2		382,088,147			382,088,147

		1,479,110,086			1,479,110,086

1	Share premium was previously paid from stock issuance and new stock issuance due to merger and can only be used for capitalization and deficit recovery.

2	Other equity arose from the paid-in capital increase of preferred share and gains on merger.

There are no changes in other paid-in capital for the years ended December 31, 2023 and 2022.

25. Retained Earnings

The details of retained earnings as at December 31, 2023 and 2022, are as follows:


(in thousands of Korean won)	2023		2022
Legal reserve
Earned surplus reserve 1		158,656,298		128,656,298
Reserve for liability to compensate for damages 2		500,000		500,000
Voluntary reserves		1,678,600,357		1,839,996,357
Regulatory reserve for credit losses 3		100,315,429		101,842,161
Unappropriated retained earnings		323,200,993		(32,922,732	)

		2,261,273,077		2,038,072,084

The Commercial Act of the Republic of Korea requires the Company to appropriate, as a legal reserve, an amount equal to a minimum of 10% of cash dividends paid until such reserve equals 50% of its issued share capital. The reserve is not available for the payment of cash dividends, but may be transferred to share capital or used to reduce accumulated deficit.

The Company provides reserve for loss on electronic financial transactions to make reparation for the damage in process of the electronic transfers or operations. Also, the Company provides reserve to compensate for inflicted damage on a credit information subject when violating the Credit Information Use and Protection Act.

3	The Company accumulates allowances for possible loan losses in accordance with Korean IFRS and reserve for possible loan losses as much as the amount below the provision of allowances according to minimum accumulation ratio required by Financial Supervisory Service.

Changes in retained earnings for the years ended December 31, 2023 and 2022, are as follows:


(in thousands of Korean won)	2023			2022
Beginning balance		2,038,072,084			2,270,994,816
Profit for the year		352,363,541			170,294,956
Dividends		(100,000,000	)		(400,000,000	)
Dividends of hybrid securities		(29,162,548	)		(3,479,007	)
Transfer to gain due to disposal of revaluation assets		—			261,319

Ending balance		2,261,273,077			2,038,072,084

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KB SECURITIES Co., Ltd.

Notes to the Separate Financial Statements

December 31, 2023 and 2022

The amount of dividends and dividends per share for the years ended December 31, 2023 and 2022, are as follows:

2023

(in Korean won and number of shares)

Type of
share

Number of
shares
outstanding

Number of
treasury

Number of
dividend
shares

Dividend
per
share

Total dividend

(In thousands of
Korean won)

Annual dividend

Ordinary
share

298,620,424
shares

—

298,620,424

334

100,000,000

2022

(in Korean won and number of shares)

Type of
share

Number of
shares
outstanding

Number of
treasury

Number of
dividend
shares

Dividend
per
share

Total dividend

(In thousands of
Korean won)

Interim dividend

Ordinary
share

298,620,424
shares

—

298,620,424

669

200,000,000

Annual dividend

Ordinary
share

298,620,424
shares

—

298,620,424

669

200,000,000

Appropriation of retained earnings for the years ended December 31, 2023 and 2022, consists of:


	2023				2022
(in thousands of Korean won)	(Expected date of appropriation: March 21, 2024)				(Date of appropriation: March 23, 2023)
Unappropriated retained earnings
Balance at the beginning of year		—				—
Changes of accounting policies		—				—
Interim dividend		—				(200,000,000	)
Dividends of hybrid securities		(29,162,548	)			(3,479,007	)
Transfer due to disposal of revaluation assets		—				261,319
Profit for the year		352,363,541		323,200,993		170,294,956		(32,922,732	)

Transfers such as discretionary reserves
Regulatory reserve for credit losses		53,015,036				1,526,732
Voluntary reserves		—		53,015,036		161,396,000		162,922,732

				376,216,029				130,000,000

Appropriation of retained earnings
Earned surplus reserve		15,000,000				30,000,000
Regulatory reserve for credit losses		—				—
Voluntary reserves		211,216,029				—
Dividends		150,000,000		376,216,029		100,000,000		130,000,000

(cash dividends per ordinary share: 502 (10.04%) in 2023)
(cash dividends per ordinary share: 334 (6.69%) in 2022)
Unappropriated retained earnings carried forward to subsequent year				—				—

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KB SECURITIES Co., Ltd.

Notes to the Separate Financial Statements

December 31, 2023 and 2022

Payout and dividend yield ratios as at December 31, 2023 and 2022, are as follows:


	2023			2022
	Ordinary share			Ordinary share
	Annual dividend			Interim dividend			Annual dividend
Number of shares outstanding		298,620,424			298,620,424			298,620,424
Number of treasury shares		—			—			—
Number of dividend shares		298,620,424			298,620,424			298,620,424
Par value per share (in Korean won)		5,000			5,000			5,000
Payout ratio		10.04	%		13.39	%		6.69	%
Scheduled dividends (in thousands of Korean won)		150,000,000			200,000,000			100,000,000
Dividends per share (in Korean won)		502			669			334

The Company accumulates allowances for possible loan losses in accordance with Korean IFRS and reserve for possible loan losses as much as the amount below the provision of allowances according to minimum accumulation ratio required by Regulation on Supervision of Financial Investment.

The details of the regulatory reserve for credit losses (reversal of reserve) to be appropriated as at December 31, 2023 and 2022, are as follows:


(in thousands of Korean won)	2023			2022
Beginning		100,315,429			101,842,161
Amounts to be reserved (reversed)		(53,015,036	)		(1,526,732	)

Ending		47,300,393			100,315,429

The adjusted profit of the year after reflection of reserve for credit losses for the years ended December 31, 2023 and 2022, are as follows:


(in thousands of Korean won)	2023		2022
Profit for the year before reserve for credit loss		352,363,541		170,294,956
Amounts to be reversed (reserved)		53,015,036		1,526,732

Adjusted profit after reversal (provision) of reserve for credit losses1		405,378,577		171,821,688

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KB SECURITIES Co., Ltd.

Notes to the Separate Financial Statements

December 31, 2023 and 2022

26. Other Components of Equity

The details of other components of equity as at December 31, 2023 and 2022, are as follows:


(in thousands of Korean won)	2023			2022
Changes in the fair value of financial assets at FVOCI		290,063,237			233,760,812
Revaluation surplus		62,144,795			62,060,360
Remeasurements of net defined benefit liabilities		(42,792,277	)		(37,778,107	)
Gain or loss on financial liabilities designated at FVTPL due to the change of credit risk		(11,782,162	)		41,080,867

		297,633,593			299,123,932

The changes in gain or loss on valuation of financial assets at FVOCI for the years ended December 31, 2023 and 2022, are as follows:


(in thousands of Korean won)	2023			2022
Beginning balance		233,760,812			216,494,145
Gain on valuation		62,120,448			11,241,986
Tax effect of gain (loss) on valuation 1		(16,026,282	)		(39,698	)
Transfer to gain due to disposal or impairment		13,869,917			8,187,321
Tax effect of transfer 1		(3,661,658	)		(2,122,942	)

Ending balance		290,063,237			233,760,812

1	Including income tax effect (Note 35)

The changes in gain on revaluation of property and equipment for the years ended December 31, 2023 and 2022, are as follows:


(in thousands of Korean won)	2023		2022
Beginning balance		62,060,360		26,749,635
Net gain on revaluation of property and equipment		—		47,900,256
Tax effect of net gains on revaluation 1		84,435		(12,328,212	)
Transfer to retained earnings due to disposal of revaluation assets		—		(261,319	)

Ending balance		62,144,795		62,060,360

1	Including income tax effect (Note 35)

The changes in remeasurements of the net defined benefit liability for the years ended December 31, 2023 and 2022, are as follows:


(in thousands of Korean won)	2023			2022
Beginning balance		(37,778,107	)		(40,522,467	)
Changes during the year		(6,812,731	)		3,785,324
Tax effect 1		1,798,561			(1,040,964	)

Ending balance		(42,792,277	)		(37,778,107	)

1	Including income tax effect (Note 35)

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KB SECURITIES Co., Ltd.

Notes to the Separate Financial Statements

December 31, 2023 and 2022

The change in gain or loss on financial liabilities designated at FVTPL due to the change of credit risk for the years ended December 31, 2023 and 2022, are as follows:


(in thousands of Korean won)	2023			2022
Beginning balance		41,080,867			2,225,784
Changes during the year		(71,900,708	)		52,822,290
Tax effect 1		19,037,679			(13,967,207	)

Ending balance		(11,782,162	)		41,080,867

1	Including income tax effect (Note 35)

27. Fee and Commission Income and Expense

The details of fee and commission income for the years ended December 31, 2023 and 2022, are as follows:


(in thousands of Korean won)	2023		2022
Brokerage commissions		505,724,502		414,015,645
Underwriting commissions		135,286,825		167,839,908
Brokerage commissions on collective investment securities		19,252,925		19,850,174
Management fee on asset management		24,227,127		27,285,178
Commissions on merger and acquisition		97,120,428		130,161,016
Trust fees and commissions		18,564,028		17,996,232
Other commissions		140,908,136		144,662,369

		941,083,971		921,810,522

The details of fee and commission expense for the years ended December 31, 2023 and 2022, are as follows:


(in thousands of Korean won)	2023		2022
Trading commission		56,240,638		48,429,891
Advisory fees		1,038,490		1,664,749
Investment management delegation fees		378,829		239,715
Commission fees on group brand		26,136,638		15,634,928
Contributions to other institutions		8,023,014		8,093,205
Others		118,685,646		92,315,789

		210,503,255		166,378,277

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KB SECURITIES Co., Ltd.

Notes to the Separate Financial Statements

December 31, 2023 and 2022

28. Gain or Loss on Valuation and Disposal of Financial Instruments

The details of gain or loss on valuation and disposal of financial instruments for the years ended December 31, 2023 and 2022, are as follows:


	2023
(in thousands of Korean won)	Gain		Loss		Net
Financial instruments at FVTPL		1,940,096,949		1,211,466,813		728,630,136
Financial instruments designated at FVTPL		727,598,407		1,057,169,764		(329,571,357	)
Derivative financial instruments		5,027,369,696		5,176,387,032		(149,017,336	)
Financial assets at FVOCI 1		3,240,874		3,579,804		(338,930	)

		7,698,305,926		7,448,603,413		249,702,513

1	Gain or loss on valuation of financial assets at FVOCI is excluded.


	2022
(in thousands of Korean won)	Gain		Loss		Net
Financial instruments at FVTPL		1,300,472,857		2,016,946,613		(716,473,756	)
Financial instruments designated at FVTPL		1,188,229,550		429,243,880		758,985,670
Derivative financial instruments		8,135,153,253		8,534,426,565		(399,273,312	)
Financial assets at FVOCI 1		525,431		16,448,205		(15,922,774	)

		10,624,381,091		10,997,065,263		(372,684,172	)

1	Gain or loss on valuation of financial assets at FVOCI is excluded.

The details of gain or loss on valuation and disposal of financial instruments at FVTPL for the years ended December 31, 2023 and 2022, are as follows:


	2023
(in thousands of Korean won)	Gain		Loss		Net
Financial assets at FVTPL		1,748,959,887		704,952,978		1,044,006,909
Financial liabilities at FVTPL		191,137,062		506,513,835		(315,376,773	)

		1,940,096,949		1,211,466,813		728,630,136


	2022
(in thousands of Korean won)	Gain		Loss		Net
Financial assets at FVTPL		1,189,377,822		1,954,324,119		(764,946,297	)
Financial liabilities at FVTPL		111,095,035		62,622,494		48,472,541

		1,300,472,857		2,016,946,613		(716,473,756	)

The details of gain or loss on valuation and disposal of financial instruments designated at FVTPL for the years ended December 31, 2023 and 2022, are as follows:


	2023
(in thousands of Korean won)	Gain		Loss		Net
Financial liabilities designated at FVTPL
Derivatives-linked securities sold		567,910,956		879,330,365		(311,419,409	)
Other OTC derivative-combined contract sold		129,915,134		154,821,326		(24,906,192	)
Exchange traded notes sold		29,772,317		23,018,073		6,754,244

		727,598,407		1,057,169,764		(329,571,357	)

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KB SECURITIES Co., Ltd.

Notes to the Separate Financial Statements

December 31, 2023 and 2022


	2022
(in thousands of Korean won)	Gain		Loss		Net
Financial liabilities designated at FVTPL
Derivatives-linked securities sold		914,565,927		359,592,452		554,973,475
Other OTC derivative-combined contract sold		244,528,092		52,797,971		191,730,121
Exchange traded notes sold		29,135,531		16,853,457		12,282,074

		1,188,229,550		429,243,880		758,985,670

The details of gain or loss on valuation and disposal of derivative financial instruments for the years ended December 31, 2023 and 2022, are as follows:


	2023
(in thousands of Korean won)	Gain		Loss		Net
Interest rate		2,137,530,340		2,159,871,413		(22,341,073	)
Currency		699,007,323		701,286,144		(2,278,821	)
Stock		1,950,908,686		2,088,474,647		(137,565,961	)
Credit		32,631,396		35,689,309		(3,057,913	)
Commodity		30,829,129		42,149,844		(11,320,715	)
Others		176,462,822		148,915,675		27,547,147

		5,027,369,696		5,176,387,032		(149,017,336	)


	2022
(in thousands of Korean won)	Gain		Loss		Net
Interest rate		4,485,897,307		4,273,096,366		212,800,941
Currency		1,560,403,367		1,434,696,665		125,706,702
Stock		1,934,335,781		2,444,365,562		(510,029,781	)
Credit		38,991,621		31,943,503		7,048,118
Commodity		33,575,544		30,167,440		3,408,104
Others		81,949,633		320,157,029		(238,207,396	)

		8,135,153,253		8,534,426,565		(399,273,312	)

The details of gain or loss on disposal of financial assets at FVOCI for the years ended December 31, 2023 and 2022, are as follows:


	2023
(in thousands of Korean won)	Gain		Loss		Net
Debt instruments		3,240,874		3,579,804		(338,930	)

	2022
(in thousands of Korean won)	Gain		Loss		Net
Debt instruments		525,431		16,448,205		(15,922,774	)

Table of Contents

KB SECURITIES Co., Ltd.

Notes to the Separate Financial Statements

December 31, 2023 and 2022

As at December 31, 2023, the Company holds PIS(Portfolio Index Swap) in connection with Lime Tethys Qualified Investor Private Investment Trust No. 2 and Lime Pluto FI Qualified Investor Private Investment Trust D-1, which were prohibited to repurchase in the fourth quarter of 2019. The Company holds beneficiary certificates and TRS contracts of 146.3 billion (nominal amount) respectively. Meanwhile, the Company sold 68.1 billion in subsidiary funds of the fund.

29. Interest Income and Interest Expense

The details of interest income for the years ended December 31, 2023 and 2022, are as follows:


(in thousands of Korean won)	2023		2022
Interest on financial assets at FVTPL
Interest on debt instruments at FVTPL		625,539,039		393,096,129
Interest on loans at FVTPL		—		4,189,123
Interest on commercial papers		182,112,270		142,422,181

		807,651,309		539,707,433

Interest on financial assets at FVOCI and financial assets measured at amortised cost
Interest on loans measured at amortised cost		3,832,928		4,129,316
Interest on debt instruments at FVOCI		170,895,226		76,499,887
Interest on broker’s loans		228,177,604		199,259,024
Interest on loans		190,128,411		130,220,677
Interest on deposits with KSFC		22,932,437		9,784,119
Interest on deposits with financial institution		356,594		26,600
Interest on bonds purchased under resale agreements		42,484,716		16,034,415
Gains on transactions of certificates of deposits		69,266		51,521
Interest on deposits		36,128,689		21,546,272
Interest on other receivables		764,747		1,006,503
Others 1		34,286,948		15,193,910

		730,057,566		473,752,244

		1,537,708,875		1,013,459,677

1	Interest on lease receivables of 935 million and 1,084 million for the year ended December 31, 2023 and 2022, respectively, are included.

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KB SECURITIES Co., Ltd.

Notes to the Separate Financial Statements

December 31, 2023 and 2022

The details of interest expense for the years ended December 31, 2023 and 2022, are as follows:


(in thousands of Korean won)	2023		2022
Interest on borrowings		61,742,569		35,798,927
Interest on customers’ deposits		54,585,335		32,178,353
Interest on bonds sold under repurchase agreements		309,464,045		171,398,994
Losses on transactions of certificates of deposit		—		76
Interest on debentures		61,837,024		41,716,419
Interest on short-term note issued		429,887,015		163,134,122
Interest on asset-backed short-term bonds		45,194,333		39,622,114
Fees for the proceeds from the sale of stocks loaned		2,080		2,466
Others 1		30,163,002		17,762,166

		992,875,403		501,613,637

1	Interest on lease liabilities of 4,409 million and 3,373 million for the year ended December 31, 2023 and 2022, respectively, are included.

30. Gain or Loss on Valuation and Disposal of Financial Assets measured at Amortised Costs

The details of gain or loss on valuation and disposal of financial assets measured at amortised cost for the years ended December 31, 2023 and 2022, are as follows:


(in thousands of Korean won)	2023			2022
Gain(loss) on valuation of financial assets measured at amortised cost
Reversal(provision) of allowance for credit losses of loans		(34,206,739	)		(5,790,615	)
Reversal(provision) of allowance for credit losses of deposits		355,011			(12,598	)
Reversal(provision) of allowance for credit losses of other financial assets		(14,394,599	)		(1,484,417	)
Gain(loss) on disposal of financial assets measured at amortised cost
Gain(loss) on disposal of loans measured at amortised cost		(5,042,842	)		(3,640,849	)

		(53,289,169	)		(10,928,479	)

31. Gain or Loss on Foreign Currency Transactions

The details of gain on foreign currency transactions for the years ended December 31, 2023 and 2022, are as follows:


(in thousands of Korean won)	2023		2022
Gain on foreign currency transactions		805,225,226		1,151,952,824
Gain on foreign exchange translation		99,615,973		104,536,359

		904,841,199		1,256,489,183

The details of loss on foreign currency transactions for the years ended December 31, 2023 and 2022, are as follows:


(in thousands of Korean won)	2023		2022
Loss on foreign currency transactions		787,889,725		1,110,025,273
Loss on foreign exchange translation		84,017,919		146,515,703

		871,907,644		1,256,540,976

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KB SECURITIES Co., Ltd.

Notes to the Separate Financial Statements

December 31, 2023 and 2022

32. Other Operating Income and Other Operating Expenses

The details of other operating income for the years ended December 31, 2023 and 2022, are as follows:


(in thousands of Korean won)	2023		2022
Dividend income		58,446,964		49,602,892
Distribution income		76,744,597		101,178,211
Reversal of provision for credit loss		8,125,021		2,597,680
Gains on disposal of general product		851,262		41,651
Others		7,144,881		3,360,615

		151,312,725		156,781,049

The details of other operating expenses for the years ended December 31, 2023 and 2022, are as follows:


(in thousands of Korean won)	2023		2022
Provision for credit losses		84,130,291		15,990,682
Others		63,621,085		37,757,329

		147,751,376		53,748,011

33. Selling and Administrative Expenses

(a)	The details of selling and administrative expenses for the years ended December 31, 2023 and 2022, are as follows:


(in thousands of Korean won)	2023		2022
Labor costs
Salaries		424,506,394		350,121,189
Post-employment benefits		28,502,489		33,061,636
Retirement bonus		1,280,577		22,686,894
Other long-term employee benefits		1,313,191		(454,613	)
Employee benefits		86,895,482		84,596,564

		542,498,133		490,011,670

Other selling and administrative expenses
Employee benefits		11,302,464		11,490,947
Sales promotion expenses		864,713		754,374
Computer system operation expenses		62,582,302		50,881,343
Management expenses for rent		20,025,529		19,284,493
Commissions		22,840,138		23,560,103
Research and development		249,603		310,103
Advertising expenses		28,452,421		26,135,402
Depreciation		44,777,159		47,084,686
Training expenses		2,510,588		2,948,539
Amortization expenses of intangible assets		39,590,256		27,565,313
Taxes and dues		35,886,699		26,139,663
Consignment fees		2,335,409		5,792,592
Others		40,871,015		37,891,058

		312,288,296		279,838,616

		854,786,429		769,850,286

Table of Contents

KB SECURITIES Co., Ltd.

Notes to the Separate Financial Statements

December 31, 2023 and 2022

(b)	Stock Grant Agreement

The executives of the Company have stock grant agreement with KB Financial Group Inc., and the Company settles the expense arising from the agreement with KB Financial Group Inc. The Company recognizes the expense in profit or loss as selling and administrative expenses.

The details of the share grants linked to long-term performance as at December 31, 2023, are as follows:


(In number of shares)	Grant date	Granted shares		Payable shares1		Vesting conditions
Series 1-1	2010-1-1		1,231		266	Service, vesting conditions : market 40%, non-market 60%
Series 1-8	2011-1-1		1,289		365	Service, vesting conditions : market 40%, non-market 60%
Series 1-10	2012-1-1		1,976		644	Service, vesting conditions : market 40%, non-market 60%
Series 1-11	2012-6-18		708		142	Service, vesting conditions : market 40%, non-market 60%
Series 1-13	2013-1-1		3,340		1,074	Service, vesting conditions : market 40%, non-market 60%
Series 1-19	2015-2-24		1,812		584	Service, vesting conditions : market 30%, non-market 70%
Series 1-21	2016-1-1		6,671		1,309	Service, vesting conditions : market 30%, non-market 70%
Series 1-22	2016-12-30		36,732		10,250	Service, vesting conditions : market 20%, non-market 80%
Series 1-24	2017-2-24		1,698		1,516	Service, vesting conditions : market 20%, non-market 80%
Series 1-25	2017-6-1		1,511		—	Service, vesting conditions : market 20%, non-market 80%
Series 1-26	2017-9-4		1,551		1,028	Service, vesting conditions : market 20%, non-market 80%
Series 1-28	2018-1-1		12,252		2,961	Service, vesting conditions : market 20%, non-market 80%
Series 1-29	2018-7-9		1,208		—	Service, vesting conditions : market 20%, non-market 80%
Series 1-30	2019-1-1		80,289		45,119	Service, vesting conditions : market 80%, non-market 20%
Series 1-30	2019-1-1		4,580		3,482	Service, vesting conditions : market 0%, non-market 100%
Series 1-31	2019-2-24		809		637	Service, vesting conditions : market 20%, non-market 80%
Series 1-32	2019-3-4		1,888		1,021	Service, vesting conditions : market 20%, non-market 80%
Series 1-33	2019-6-1		3,994		1,621	Service, vesting conditions : market 20%, non-market 80%
Series 1-34	2019-9-1		2,927		706	Service, vesting conditions : market 20%, non-market 80%
Series 1-35	2019-9-4		358		207	Service, vesting conditions : market 20%, non-market 80%
Series 1-36	2019-5-27		1,167		383	Service, vesting conditions : market 20%, non-market 80%
Series 1-37	2020-1-1		48,962		17,855	Service, vesting conditions : market 20%, non-market 80%
Series 1-38	2020-3-6		2,856		1,233	Service, vesting conditions : market 0%, non-market 100%
Series 1-39	2020-8-1		12,744		4,173	Service, vesting conditions : market 20%, non-market 80%
Series 1-40	2021-1-1		98,808		42,155	Service, vesting conditions : market 80%, non-market 20%
Series 1-40	2021-1-1		5,675		2,237	Service, vesting conditions : market 0%, non-market 100%

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KB SECURITIES Co., Ltd.

Notes to the Separate Financial Statements

December 31, 2023 and 2022


Series 1-41	2021-3-4	3,591	5,383	Service, vesting conditions : market 20%, non-market 80%
Series 1-42	2021-3-15	5,034	5,552	Service, vesting conditions : market 20%, non-market 80%
Series 1-43	2021-5-27	604	199	Service, vesting conditions : market 20%, non-market 80%
Series 1-44	2021-6-1	2,904	4,601	Service, vesting conditions : market 20%, non-market 80%
Series 1-45	2021-8-1	2,320	2,980	Service, vesting conditions : market 20%, non-market 80%
Series 1-46	2021-9-1	3,201	5,338	Service, vesting conditions : market 20%, non-market 80%
Series 1-47	2022-1-1	61,447	70,901	Service, vesting conditions : market 20%, non-market 80%
Series 1-48	2022-2-17	1,990	2,695	Service, vesting conditions : market 20%, non-market 80%
Series 1-49	2022-3-6	928	256	Service, vesting conditions : market 0%, non-market 100%
Series 1-50	2022-03-14	1,060	1,060	Service, vesting conditions : market 20%, non-market 80%
Series 1-51	2022-05-09	2,839	2,338	Service, vesting conditions : market 20%, non-market 80%
Series 1-52	2022-07-18	602	602	Service, vesting conditions : market 20%, non-market 80%
Series 1-53	2022-08-01	4,945	4,484	Service, vesting conditions : market 20%, non-market 80%
Series 1-54	2022-08-16	3,375	4,381	Service, vesting conditions : market 20%, non-market 80%
Series 1-55	2023-01-01	76,499	46,927	Service, vesting conditions : market 20%, non-market 80%
Series 1-55	2023-01-01	5,022	2,507	Service, vesting conditions : market 0%, non-market 100%
Series 1-56	2023-02-15	3,161	1,383	Service, vesting conditions : market 20%, non-market 80%
Series 1-57	2023-03-04	3,361	1,393	Service, vesting conditions : market 20%, non-market 80%
Series 1-58	2023-03-15	1,367	1,367	Service, vesting conditions : market 20%, non-market 80%
Series 1-59	2023-06-01	3,626	1,061	Service, vesting conditions : market 20%, non-market 80%
Series 1-60	2023-08-01	2,768	579	Service, vesting conditions : market 20%, non-market 80%
Series 1-61	2023-09-01	3,390	565	Service, vesting conditions : market 20%, non-market 80%

		531,070	307,520

1	The number of maximum payable shares per executive as at December 31, 2023.

The details of share grants linked to short-term performance as at December 31, 2023, are as follows:


(In number of shares)	Grant date	Granted shares		Payable shares1		Vesting conditions2
Series 2-3	2016-1-1		6,844		1,823	Proportional to service period, vesting conditions satisfied
Series 2-4	2017-1-1		25,285		12,171	Proportional to service period, vesting conditions satisfied
Series 2-5	2018-1-1		36,155		22,049	Proportional to service period, vesting conditions satisfied
Series 2-6	2019-1-1		60,039		19,601	Proportional to service period, vesting conditions satisfied

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KB SECURITIES Co., Ltd.

Notes to the Separate Financial Statements

December 31, 2023 and 2022


Series 2-7	2020-1-1	68,689	37,482	Proportional to service period, vesting conditions satisfied
Series 2-8	2021-1-1	69,448	54,053	Proportional to service period, vesting conditions satisfied
Series 2-9	2022-1-1	55,521	55,521	Proportional to service period, vesting conditions satisfied
Series 2-10	2023-1-1	94,583	94,583	Proportional to service period, vesting conditions satisfied
Series 3-3	2016-1-1	15,036	7,458	Proportional to service period, vesting conditions satisfied
Series 3-4	2017-1-1	12,112	7,055	Proportional to service period, vesting conditions satisfied
Series 3-5	2018-1-1	10,352	8,896	Proportional to service period, vesting conditions satisfied
Series 3-6	2019-1-1	44,696	16,885	Proportional to service period, vesting conditions satisfied
Series 3-7	2020-1-1	77,112	39,144	Proportional to service period, vesting conditions satisfied
Series 3-8	2021-1-1	91,948	73,194	Proportional to service period, vesting conditions satisfied
Series 3-9	2022-1-1	66,060	66,060	Proportional to service period, vesting conditions satisfied
Series 4-1	2017-12-31	23,667	21,865	Proportional to service period, vesting conditions satisfied
Series 4-2	2019-12-31	255,976	10,243	Proportional to service period, vesting conditions satisfied
Series 4-3	2020-12-31	267,279	98,725	Proportional to service period, vesting conditions satisfied
Series 4-4	2021-12-31	270,257	200,417	Proportional to service period, vesting conditions satisfied
Series 4-5	2022-12-31	217,733	217,733	Proportional to service period, vesting conditions satisfied

		1,768,792	1,064,958

1	The number of maximum payable shares per executive as at December 31, 2023.

2	Number of vested shares is determined by performance and paid for a deferred payment schedule over 3 to 5 years.

Share grants are measured at fair value using the Monte Carlo Simulation Model and assumptions used in determining the fair value as at December 31, 2023, are as follows:


(In Korean won)	Risk free rate (%)	Fair value (Market performance condition)	Fair value (Non-market performance condition)
Series 1-1	3.434	—	49,315~52,755
Series 1-8	3.434	—	49,315~52,755
Series 1-10	3.434	—	49,315~52,755
Series 1-11	3.434	—	47,631~47,631
Series 1-13	3.434	—	47,631~52,755
Series 1-19	3.434	—	45,096~47,631
Series 1-21	3.434	—	45,096~52,755
Series 1-22	3.434	—	45,096~56,379
Series 1-24	3.434	—	45,096~56,379
Series 1-26	3.434	—	45,096~56,379
Series 1-28	3.434	—	45,096~56,379
Series 1-30	3.434	—	44,873~56,379
Series 1-31	3.434	—	45,096~56,379
Series 1-32	3.434	—	42,787~47,066
Series 1-33	3.434	—	51,649~52,755
Series 1-34	3.434	—	51,649~52,755
Series 1-35	3.434	—	45,096~56,379
Series 1-36	3.434	—	51,649~52,755
Series 1-37	3.434	—	47,066~52,755

Table of Contents

KB SECURITIES Co., Ltd.

Notes to the Separate Financial Statements

December 31, 2023 and 2022


(In Korean won)	Risk free rate (%)	Fair value (Market performance condition)	Fair value (Non-market performance condition)
Series 1-38	3.434	—	49,315~52,755
Series 1-39	3.434	—	49,315~52,755
Series 1-40	3.434	—	44,873~52,755
Series 1-41	3.434	41,598~51,288	42,787~47,066
Series 1-42	3.434	44,468~49,843	47,066~51,649
Series 1-43	3.434	-	51,649~52,755
Series 1-44	3.434	40,109~49,453	42,787~47,066
Series 1-45	3.434	47,038~52,723	47,066~51,649
Series 1-46	3.434	47,066~52,755	47,066~51,649
Series 1-47	3.434	42,096~48,102	47,066~51,649
Series 1-48	3.434	38,995~44,883	44,873~49,315
Series 1-49	3.434	-	49,315~52,755
Series 1-50	3.434	44,402~49,769	47,066~51,649
Series 1-51	3.434	42,445~48,855	44,873~49,315
Series 1-52	3.434	46,882~52,549	47,066~51,649
Series 1-53	3.434	42,737~49,191	44,873~52,755
Series 1-54	3.434	42,203~48,576	44,873~49,315
Series 1-55	3.434	44,873~52,755	44,873~51,649
Series 1-56	3.434	42,787~49,315	42,787~47,066
Series 1-57	3.434	42,787~49,315	42,787~47,066
Series 1-58	3.434	47,066~52,755	47,066~51,649
Series 1-59	3.434	42,787~49,315	42,787~47,066
Series 1-60	3.434	41,987~48,393	42,787~47,066
Series 1-61	3.434	39,955~46,050	42,787~47,066
Series 2-3	3.434	—	47,631~52,755
Series 2-4	3.434	—	44,873~52,755
Series 2-5	3.434	—	44,873~56,379
Series 2-6	3.434	—	42,787~56,379
Series 2-7	3.434	—	42,787~56,379
Series 2-8	3.434	—	42,787~53,595
Series 2-9	3.434	—	42,787~52,755
Series 2-10	3.434	—	42,787~51,649
Series 3-3	3.434	—	47,631~52,755
Series 3-4	3.434	—	45,096~52,755
Series 3-5	3.434	—	44,873~56,379
Series 3-6	3.434	—	44,873~56,379
Series 3-7	3.434	—	44,873~56,379
Series 3-8	3.434	—	44,873~52,755
Series 3-9	3.434	—	44,873~52,755
Series 4-1	3.434	—	45,096~56,379
Series 4-2	3.434	—	50,973~50,973
Series 4-3	3.434	—	49,315~52,755
Series 4-4	3.434	—	50,973~52,755
Series 4-5	3.434	—	49,315~52,755

The Company used the volatility of the stock price over the previous year as the expected volatility and used the dividend yield as the arithmetic mean of the dividend rate of one year before, two years before, and three years before the base year, in order to calculate fair value. Fair value is calculated based on risk free interest rate of 1 year-KTB rate.

Table of Contents

KB SECURITIES Co., Ltd.

Notes to the Separate Financial Statements

December 31, 2023 and 2022

34. Non-operating Income and Non-operating Expenses

The details of non-operating income for the years ended December 31, 2023 and 2022, are as follows:


(in thousands of Korean won)	2023		2022
Gain on disposal of property and equipment		—		1,481,966
Gain on disposal of investment properties		—		601,745
Gain on disposal of intangible assets		1,436,275		—
Reversal of impairment loss on intangible assets		1,726,399		394,684
Reversal of loss on revaluation of property and equipment		—		72,800
Rent		6,449,025		5,968,469
Gain related to investments in subsidiaries and associates		20,350,670		78,025,598
Others		25,648,222		7,037,551

		55,610,591		93,582,813

The details of non-operating expenses for the years ended December 31, 2023 and 2022 are as follows:


(in thousands of Korean won)	2023		2022
Loss on disposal of property and equipment		14,308		292,841
Loss on disposal of investment properties		—		29,912
Depreciation of investment properties		383,216		418,394
Loss on disposal of intangible assets		2,500		22,000
Impairment loss on intangible assets		74,692		1,028,751
Loss on revaluation of property and equipment		—		451,905
Loss related to investments in subsidiaries and associates1		193,716,114		10,726,299
Donation		3,787,859		8,023,559
Others		69,713,630		58,843,267

		267,692,319		79,836,928

During the year ended December 31, 2023, there were signs of impairment for investments related to Vestas General Private Real Estate Fund Investment Trust No. 38 and LB Irealand Private Real Estate Investment Trust 8, which were subsidiaries of the Company, and the estimated recoverable amount was lower than the book value, so KRW 102,767 million and KRW 66,076 million of impairment losses, respectively, were recognized.

Table of Contents

KB SECURITIES Co., Ltd.

Notes to the Separate Financial Statements

December 31, 2023 and 2022

35. Tax Expense and Deferred Tax

The details of income tax expense for the years ended December 31, 2023 and 2022, are as follows:


(in thousands of Korean won)	2023			2022
Current tax
Current tax on profits for the year		145,757,259			42,582,556
Adjustments in respect of prior years		1,908,329			(1,091,537	)
Deferred tax
Origination and reversal of temporary differences		(56,454,276	)		45,258,159
Tax recognized directly in equity
Gain or loss on valuation for financial assets at FVOCI		(19,687,942	)		(2,162,640	)
Gain on revaluation of property and equipment		84,436			(12,328,212	)
Changes on the fair value of financial liabilities designated at FVTPL due to the change of credit risk		19,037,679			(13,967,207	)
Remeasurements of net defined benefit liabilities		1,798,561			(1,040,964	)
Tax effect derived from group’s income tax system		(3,353,308	)		2,997,367

Income tax expense		89,090,738			60,247,522

Reconciliations of profit before tax and tax expense for the years ended December 31, 2023 and 2022, are as follows:


(in thousands of Korean won)	2023			2022
Profit before tax (A)		441,454,279			230,542,478

Tax based on statutory rate		106,181,930			55,329,280
Adjustments
Non-deductible expense		4,853,834			4,321,064
Non-taxable income		(8,847,983	)		(3,968,641	)
Changes in deferred tax assets (liabilities) that have not been recognized		(8,165,095	)		(612,030	)
Effect from tax reduction and credit		(1,362,312	)		(201,610	)
Adjustment in respect of prior years		1,908,329			(1,091,537	)
Tax effect from group’s income tax system		(3,353,308	)		2,997,367
Changes in tax rate		(291,679	)		1,797,093
Others		(1,832,978	)		1,676,536

Tax expense (B)		89,090,738			60,247,522

Effective tax rate (B/A)		20.18	%		26.13	%

Table of Contents

KB SECURITIES Co., Ltd.

Notes to the Separate Financial Statements

December 31, 2023 and 2022

The changes in deferred tax assets (liabilities) for the years ended December 31, 2023 and 2022, are as follows:


	2023
(in thousands of Korean won)	Beginning balance			Profit (loss) for the year			Other comprehensive income			Ending balance
Provision for impairment		136,919			(517	)		—			136,402
Commissions income		7,803,594			1,333,066			—			9,136,660
Financial assets at FVOCI		(85,934,450	)		403,339			(19,687,941	)		(105,219,052	)
Defined benefit obligation		17,820,542			161,717			1,798,561			19,780,820
Other long-term employee benefits		1,901,703			(33,816	)		—			1,867,887
Financial assets at FVTPL		195,212,195			(159,303,751	)		—			35,908,444
Financial liabilities at FVTPL		(307,146,059	)		50,510,309			19,037,679			(237,598,071	)
Accrued expenses		54,462,905			14,753,559			—			69,216,464
Dividends (specific overseas company)		9,419,063			(140,884	)		—			9,278,179
Accrued income		(24,776,460	)		(9,752,775	)		—			(34,529,235	)
Property and equipment		(22,035,671	)		(4,181	)		84,436			(21,955,416	)
Provisions for asset retirement obligation		2,332,599			58,956			—			2,391,555
Investments in associates and subsidiaries		(163,368	)		(2,314,051	)		—			(2,477,419	)
Derivatives		45,168,323			109,004,625			—			154,172,948
Loans		1,604,716			(98,398	)		—			1,506,318
Intangible assets		(20,232,372	)		(620,051	)		—			(20,852,423	)
Plan assets		(3,293,977	)		(209,514	)		—			(3,503,491	)
Advance depreciation provision		(2,410,822	)		9,097			—			(2,401,725	)
Interest related to loan for construction		(58,852	)		3,945			—			(54,907	)
Others		52,127,628			43,311,683			—			95,439,311

Subtotal		(78,061,844	)		47,072,358			1,232,735			(29,756,751	)
Unrecognized deferred tax assets (liabilities)		(4,216,737	)		(8,149,183	)		—			(12,365,920	)

Deferred tax assets (liabilities), net 1		(73,845,107	)		55,221,541			1,232,735			(17,390,831	)

1	The income tax rates used in computing deferred tax assets (liabilities) are the expected average tax rate, applicable to the forecasted period when the temporary differences are reversed.


	2022
(in thousands of Korean won)	Beginning balance			Profit (loss) for the year			Other comprehensive income			Ending balance
Provision for impairment		142,086			(5,167	)		—			136,919
Commissions income		4,622,730			3,180,864			—			7,803,594
Financial assets at FVOCI		(79,210,178	)		(4,561,632	)		(2,162,640	)		(85,934,450	)
Defined benefit obligation		19,501,521			(640,015	)		(1,040,964	)		17,820,542
Other long-term employee benefits		2,098,484			(196,781	)		—			1,901,703
Financial assets at FVTPL		55,244,765			139,967,430			—			195,212,195
Financial liabilities at FVTPL		(49,107,484	)		(244,071,368	)		(13,967,207	)		(307,146,059	)
Accrued expenses		75,757,563			(21,294,658	)		—			54,462,905
Dividends (specific overseas company)		10,545,651			(1,126,588	)		—			9,419,063
Accrued income		(22,988,746	)		(1,787,714	)		—			(24,776,460	)
Property and equipment		(9,782,627	)		75,168			(12,328,212	)		(22,035,671	)
Provisions for asset retirement obligation		2,199,329			133,270			—			2,332,599
Investments in associates and subsidiaries		1,747,824			(1,911,192	)		—			(163,368	)
Derivatives		(57,458,767	)		102,627,090			—			45,168,323
Loans		1,584,488			20,228			—			1,604,716
Intangible assets		(20,530,350	)		297,978			—			(20,232,372	)
Plan assets		(4,206,052	)		912,075			—			(3,293,977	)
Advance depreciation provision		(2,501,796	)		90,974			—			(2,410,822	)
Interest related to loan for construction		(64,951	)		6,099			—			(58,852	)

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KB SECURITIES Co., Ltd.

Notes to the Separate Financial Statements

December 31, 2023 and 2022


Others	40,214,855		11,912,773		—		52,127,628

Subtotal	(32,191,655	)	(16,371,166	)	(29,499,023	)	(78,061,844	)
Unrecognized deferred tax assets (liabilities)	(3,604,707	)	(612,030	)	—		(4,216,737	)

Deferred tax assets (liabilities), net 1	(28,586,948	)	(15,759,136	)	(29,499,023	)	(73,845,107	)

1	The income tax rates used in computing deferred tax assets (liabilities) are the expected average tax rate, applicable to the forecasted period when the temporary differences are reversed.

Temporary differences which were not recognized due to uncertainty of their realization as at December 31, 2023 and 2022, are as follows:


(in thousands of Korean won)	2023		2022
Taxable temporary difference
Investments in subsidiaries		35,292,457		17,815,543
Intangible assets		58,888,990		58,888,990
Others		445,550		445,550

		94,626,997		77,150,083

Deductible temporary difference
Commission		9,239,637		7,512,805
Dividends		20,365,324		35,543,632
Investments in subsidiaries		15,476,124		15,476,124
Others		2,705,305		2,705,305

		47,786,390		61,237,866

		46,840,607		15,912,217

Details of income taxes that are charged or credited directly to equity for the years ended December 31, 2023 and 2022, are as follows:


(in thousands of Korean won)	2023			2022
Recognized in other comprehensive income
Gain or loss on valuation for financial assets at FVOCI		(16,026,284	)		(39,698	)
Changes on the fair value of financial liabilities designated at FVTPL due to the change of credit risk		19,037,679			(13,967,207	)
Gain on revaluation of property and equipment		84,436			(12,328,212	)
Remeasurements of net defined benefit liabilities		1,798,561			(1,040,964	)
Reclassified to profit or loss
Gain or loss on valuation for financial assets at FVOCI		(3,661,658	)		(2,122,942	)

		1,232,734			(29,499,023	)

Table of Contents

KB SECURITIES Co., Ltd.

Notes to the Separate Financial Statements

December 31, 2023 and 2022

36. Carrying Amounts of Financial Instruments by Category

The carrying amounts of financial assets and liabilities by category as at December 31, 2023 and 2022, are as follows:


	2023
(in thousands of Korean won)	Financial asset measured at fair value through profit or loss		Financial asset measured at fair value through Other Comprehensive income		Financial asset measured at amortised cost		Totals
Financial Assets
Cash and deposits		—		—		2,324,715,993		2,324,715,993
Financial Assets at FVTPL		35,529,339,671		—		—		35,529,339,671
Derivative financial assets		1,135,196,744		—		—		1,135,196,744
Equity instruments at FVOCI		—		860,085,126		—		860,085,126
Debt instruments at FVOCI		—		4,270,319,038		—		4,270,319,038
Loans measured at amortised cost		—		—		7,973,604,805		7,973,604,805
Other financial assets		—		—		4,076,458,711		4,076,458,711

		36,664,536,415		5,130,404,164		14,374,779,509		56,169,720,088


	2023
(in thousands of Korean won)	Financial liabilities measured at fair value through profit or loss		Financial liabilities designated at fair value through profit or loss		Financial liabilities measured at amortised cost		Derivative liabilities (hedging)		Totals
Financial Liabilities
Financial liabilities at FVTPL		2,860,033,642		—		—		—		2,860,033,642
Financial liabilities designated at FVTPL		—		7,975,847,458		—		—		7,975,847,458
Derivative financial liabilities		1,806,705,125		—		—		5,307,120		1,812,012,245
Deposit liabilities		—		—		7,133,908,105		—		7,133,908,105
Borrowings		—		—		27,393,887,530		—		27,393,887,530
Other financial liabilities		—		—		3,867,868,006		—		3,867,868,006

		4,666,738,767		7,975,847,458		38,395,663,641		5,307,120		51,043,556,986

Table of Contents

KB SECURITIES Co., Ltd.

Notes to the Separate Financial Statements

December 31, 2023 and 2022


	2022
(in thousands of Korean won)	Financial asset measured at fair value through profit or loss		Financial asset measured at fair value through Other Comprehensive income		Financial asset measured at amortised cost		Totals
Financial Assets
Cash and deposits		—		—		4,028,288,407		4,028,288,407
Financial Assets at FVTPL		28,995,718,418		—		—		28,995,718,418
Derivative financial assets		1,701,970,056		—		—		1,701,970,056
Equity instruments at FVOCI		—		686,116,835		—		686,116,835
Debt instruments at FVOCI		—		4,112,728,624		—		4,112,728,624
Loans measured at amortised cost		—		—		6,566,785,893		6,566,785,893
Other financial assets		—		—		2,698,990,295		2,698,990,295

		30,697,688,474		4,798,845,459		13,294,064,595		48,790,598,528


	2022
(in thousands of Korean won)	Financial liabilities measured at fair value through profit or loss		Financial liabilities designated at fair value through profit or loss		Financial liabilities measured at amortised cost		Derivative liabilities (hedging)		Totals
Financial Liabilities
Financial liabilities at FVTPL		2,082,979,265		—		—		—		2,082,979,265
Financial liabilities designated at FVTPL		—		10,088,600,213		—		—		10,088,600,213
Derivative financial liabilities		2,307,993,521		—		—		10,070,190		2,318,063,711
Deposit liabilities		—		—		6,819,371,625		—		6,819,371,625
Borrowings		—		—		20,575,667,241		—		20,575,667,241
Other financial liabilities		—		—		2,243,572,915		—		2,243,572,915

		4,390,972,786		10,088,600,213		29,638,611,781		10,070,190		44,128,254,970

Table of Contents

KB SECURITIES Co., Ltd.

Notes to the Separate Financial Statements

December 31, 2023 and 2022

37. Financial Instruments

37.1 Fair Value of Financial Instruments by Class

Fair values of financial assets and financial liabilities as at December 31, 2023 and 2022, are as follows:


	2023				2022
(in thousands of Korean won)	Carrying amount		Fair value		Carrying amount		Fair value
Financial assets
Cash and deposits 2		2,324,715,993		2,324,715,993		4,028,288,407		4,028,288,407
Financial assets at FVTPL 1		35,529,339,671		35,529,339,671		28,995,718,418		28,995,718,418
Derivative financial assets 1		1,135,196,744		1,135,196,744		1,701,970,056		1,701,970,056
Financial assets at FVOCI		5,130,404,164		5,130,404,164		4,798,845,459		4,798,845,459
Loans measured at amortised cost		7,973,604,805		7,977,344,594		6,566,785,893		6,544,314,422
Other financial assets 2		4,076,458,711		4,076,458,711		2,698,990,295		2,698,990,295

		56,169,720,088		56,173,459,877		48,790,598,528		48,768,127,057

1	Deferred transaction gain or losses are adjusted in the carrying amount.

2	The fair value of cash and deposits, other financial assets, deposit liabilities and other financial liabilities with short maturity dates or uncertain maturity dates is presented at their book amounts.


	2023				2022
(in thousands of Korean won)	Carrying amount		Fair value		Carrying amount		Fair value
Financial liabilities
Deposit liabilities 2		7,133,908,105		7,133,908,105		6,819,371,625		6,819,371,625
Financial liabilities at FVTPL		2,860,033,642		2,860,033,642		2,082,979,265		2,082,979,265
Financial liabilities designated at FVTPL 1		7,975,847,458		7,975,847,458		10,088,600,213		10,088,600,213
Derivative financial liabilities 1		1,812,012,245		1,812,012,245		2,318,063,711		2,318,063,711
Borrowings		27,393,887,530		27,384,172,276		20,575,667,241		20,512,526,086
Other financial liabilities 2		3,867,868,006		3,867,868,006		2,243,572,915		2,243,572,915

		51,043,556,986		51,033,841,732		44,128,254,970		44,065,113,815

1	Deferred transaction gain or losses are adjusted in the carrying amount.

2	The fair value of cash and deposits, other financial assets, deposit liabilities and other financial liabilities with short maturity dates or uncertain maturity dates is presented at their book amounts.

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

37.2 Fair Value Hierarchy

Financial instruments measured at fair value are categorized within the fair value hierarchy, and the defined levels are as follows:


Level 1		Quoted prices (unadjusted) in active markets for identical assets or liabilities

Level 2		Fair value using inputs other than quoted prices included within Level 1 that are observable for the asset or liability, either directly (that is, prices) or indirectly (that is, derived from prices)

Level 3		Fair value using inputs for the asset or liability that are not based on observable market data (that is, unobservable inputs)

Table of Contents

KB SECURITIES Co., Ltd.

Notes to the Separate Financial Statements

December 31, 2023 and 2022

(a) Fair value hierarchy of financial instruments measured at fair value

The fair value hierarchy of financial assets and liabilities measured at fair value as at December 31, 2023 and 2022, are as follows:


	2023
(in thousands of Korean won)	Level 1		Level 2		Level 3		Total
Financial assets
Financial assets at FVTPL – debt instruments 1		6,754,020,777		24,550,643,744		2,840,320,518		34,144,985,039
Financial assets at FVTPL - equity instruments		757,882,526		379,716,820		246,755,286		1,384,354,632
Derivative financial assets 1		26,360,676		1,017,206,808		91,629,260		1,135,196,744
Financial assets at FVOCI		5,248,843		4,690,968,746		434,186,575		5,130,404,164

		7,543,512,822		30,638,536,118		3,612,891,639		41,794,940,579

Financial liabilities
Financial liabilities at FVTPL		2,860,033,642		—		—		2,860,033,642
Financial liabilities designated at FVTPL1		56,685,594		881,791,359		7,037,370,505		7,975,847,458
Derivative financial liabilities 1		94,301,314		962,156,434		755,554,497		1,812,012,245

		3,011,020,550		1,843,947,793		7,792,925,002		12,647,893,345

1	Deferred transaction gain or losses are adjusted in the carrying amount.


	2022
(in thousands of Korean won)	Level 1		Level 2		Level 3		Total
Financial assets
Financial assets at FVTPL – debt instruments 1		6,259,722,865		19,448,292,474		2,136,574,599		27,844,589,938
Financial assets at FVTPL - equity instruments		481,362,503		520,104,659		149,661,318		1,151,128,480
Derivative financial assets 1		96,188,443		1,485,006,498		120,775,115		1,701,970,056
Financial assets at FVOCI		5,025,406		4,372,289,778		421,530,275		4,798,845,459

		6,842,299,217		25,825,693,409		2,828,541,307		35,496,533,933

Financial liabilities
Financial liabilities at FVTPL		2,082,979,265		—		—		2,082,979,265
Financial liabilities designated at FVTPL1		35,687,313		1,811,403,735		8,241,509,165		10,088,600,213
Derivative financial liabilities 1		422,619,560		1,117,902,302		777,541,849		2,318,063,711

		2,541,286,138		2,929,306,037		9,019,051,014		14,489,643,189

1	Deferred transaction gain or losses are adjusted in the carrying amount.

Table of Contents

KB SECURITIES Co., Ltd.

Notes to the Separate Financial Statements

December 31, 2023 and 2022

37.3 Valuation techniques and inputs classified by Level 2

The details of the valuation techniques and inputs classified by Level 2 as at December 31, 2023 and 2022 are as follows:


(in thousands of Korean won)	2023		Valuation techniques	Inputs
Financial assets at FVTPL		24,930,360,564	DCF Model, Closed form formula, Monte Carlo Simulation, Black Scholes model, Hull and White Model, Net asset value and others	Price of underlying asset, interest rate, dividend rate, volatility, discount rate and others
Derivative financial assets(trading)		1,017,206,808	DCF Model, Closed form formula, Monte Carlo Simulation, Black Scholes model, Hull and White Model, Net asset value and others	Interest rate, price of underlying asset, exchange rate, credit spread, discount rate, volatility and others
Financial assets at FVOCI		4,690,968,746	DCF Model	Discount rate, Interest rate and others

		30,638,536,118

Financial liabilities designated at FVTPL		881,791,359	DCF Model, Closed form formula, Monte Carlo Simulation, Black Scholes model, Hull and White Model, Net asset value and others	Price of underlying asset, interest rate, dividend rate, volatility, discount rate
Derivative financial liabilities(trading)		956,849,314	DCF Model, Closed form formula, Monte Carlo Simulation, Black Scholes model, Hull and White Model, Net asset value and others	Interest rate, price of underlying asset, exchange rate, credit spread, discount rate, volatility
Derivative financial liabilities(hedging)		5,307,120	DCF Model	Discount rate, exchange rate and others

		1,843,947,793


(in thousands of Korean won)	2022		Valuation techniques	Inputs
Financial assets at FVTPL		19,968,397,133	DCF Model, Closed form formula, Monte Carlo Simulation, Black Scholes model, Hull and White Model, Net asset value and others	Price of underlying asset, interest rate, dividend rate, volatility, discount rate and others
Derivative financial assets(trading)		1,485,006,498	DCF Model, Closed form formula, Monte Carlo Simulation, Black Scholes model, Hull and White Model, Net asset value and others	Interest rate, price of underlying asset, exchange rate, credit spread, discount rate, volatility and others
Financial assets at FVOCI		4,372,289,778	DCF Model	Discount rate, Interest rate and others

		25,825,693,409

Financial liabilities designated at FVTPL		1,811,403,735	DCF Model, Closed form formula, Monte Carlo Simulation, Black Scholes model, Hull and White Model, Net asset value and others	Price of underlying asset, interest rate, dividend rate, volatility, discount rate
Derivative financial liabilities(trading)		1,107,832,112	DCF Model, Closed form formula, Monte Carlo Simulation, Black Scholes model, Hull and White Model, Net asset value and others	Interest rate, price of underlying asset, exchange rate, credit spread, discount rate, volatility
Derivative financial liabilities(hedging)		10,070,190	DCF Model	Discount rate, exchange rate and others

		2,929,306,037

Table of Contents

KB SECURITIES Co., Ltd.

Notes to the Separate Financial Statements

December 31, 2023 and 2022

37.4 Level 3 of the Fair Value Hierarchy Disclosure

(a) Valuation Process for Fair Value Measurements Categorized Within Level 3 of the Fair Value Hierarchy

The fair value of financial instruments classified as Level 3 is determined by external valuation or self-valuation of the Company. Unobservable inputs are produced by the external appraiser or internal valuation system and the Company reviews the adequacy of the inputs. The Risk Management Council reviews the adequacy of the assessment methodology and valuation method of external appraiser and the internal valuation. The agenda of the Risk Management Council is being reported or approved by the Risk Committee.

(b) Changes in Fair Value Measurements Categories of the Fair Value hierarchy

The changes in financial instruments with Level 3 fair value for the years ended December 31, 2023 and 2022, are as follows:


	2023
(in thousands of Korean won)	Financial assets at FVTPL			Financial assets at FVOCI		Net derivatives			Financial liabilities designated at FVTPL
Beginning balance		2,286,235,917			421,530,275		(656,766,734	)		(8,241,509,165	)
Total gains or losses
Profit or loss		88,895,905			—		(75,110,379	)		(337,404,523	)
Other comprehensive income		—			12,656,300		—			(32,370,491	)
Purchases		1,359,209,239			—		11,645,512			—
Sales		(655,925,918	)		—		(6,653,771	)		—
Issues		—			—		(6,275,196	)		(4,431,945,040	)
Settlements		—			—		69,235,329			6,005,858,714
Transfer within levels 1		8,660,662			—		—			—

Ending balance		3,087,075,805			434,186,575		(663,925,239	)		(7,037,370,505	)

1	Transfer within levels occurred due to the change in the availability of observable market data on the financial instruments.

Table of Contents

KB SECURITIES Co., Ltd.

Notes to the Separate Financial Statements

December 31, 2023 and 2022


	2022
(in thousands of Korean won)	Financial assets at FVTPL			Financial assets at FVOCI		Net derivatives			Financial liabilities designated at FVTPL
Beginning balance		1,728,987,322			366,776,095		41,344,748			(7,829,040,979	)
Total gains or losses
Profit or loss		(73,050,511	)		—		(666,119,493	)		563,317,417
Other comprehensive income		—			54,754,180		—			60,520,089
Purchases		898,515,700			—		23,525,783			—
Sales		(278,907,255	)		—		(59,177,496	)		—
Issues		—			—		(14,796,230	)		(5,222,820,340	)
Settlements		—			—		18,455,954			4,186,514,648
Transfer within levels 1		10,690,661			—		—			—

Ending balance		2,286,235,917			421,530,275		(656,766,734	)		(8,241,509,165	)

1	Transfer within levels occurred due to the change in the availability of observable market data on the financial instruments.


	2023
(in thousands of Korean won)	Financial assets at FVTPL		Financial assets at FVOCI		Net derivatives			Financial liabilities designated at FVTPL
Profit or loss
Gain or loss on valuation of financial instruments 1		46,805,083		—		(38,278,972	)		70,813,358
Other comprehensive income
Gain or loss on valuation of financial assets at FVOCI 2		—		12,656,300		—			—
Changes in fair value of financial liabilities at FVTPL due to the change of credit risk 2		—		—		—			(51,567,843	)

		46,805,083		12,656,300		(38,278,972	)		19,245,515

1	Included in gain or loss on valuation and disposal of financial instruments on the statements of Profit or Loss.

2	Included in other comprehensive income on the statements of comprehensive income.


	2022
(in thousands of Korean won)	Financial assets at FVTPL			Financial assets at FVOCI		Net derivatives			Financial liabilities designated at FVTPL
Profit or loss
Gain or loss on valuation of financial instruments 1		(84,173,390	)		—		(558,677,313	)		726,467,752
Other comprehensive income
Gain or loss on valuation of financial assets at FVOCI 2		—			54,754,180		—			—
Changes in fair value of financial liabilities at FVTPL due to the change of credit risk 2		—			—		—			56,580,809

		(84,173,390	)		54,754,180		(558,677,313	)		783,048,561

1	Included in gain or loss on valuation and disposal of financial instruments on the statements of Profit or Loss.

2	Included in other comprehensive income on the statements of comprehensive income.

Table of Contents

KB SECURITIES Co., Ltd.

Notes to the Separate Financial Statements

December 31, 2023 and 2022

Valuation techniques and inputs for level 3 financial instruments are as follows:

2023

(in thousands of
Korean won)

Type

Fair value

Valuation
techniques

Inputs

Unobservable

input

Range

Relevance

Financial assets at FVTPL

Equity-linked securities

9,129,439

DCF model, Closed Form, Monte Carlo

Price of underlying asset, interest rate,

Underlying asset volatility

0.29 ~ 0.37

Proportional

Correlation

0.57 ~ 0.76

Proportional


Retails
Grade 1	3,080,984,125	—	—	—	—	3,080,984,125
Grade 2	321,798	—	—	—	—	321,798
Grade 3	—	—	—	—	—	—
Grade 4	1,450,328	—	—	—	—	1,450,328
Grade 5	—	—	—	—	—	—

	3,082,756,251	—	—	—	—	3,082,756,251

	7,930,277,924	36,919,543	57,327,382	—	—	8,024,524,849


	2022
(in thousands of Korean won)	On demand		Up to one month		One to three months		Three to 12 months		12 months to five years		More than five years		Total
Financial liabilities
Financial liabilities at FVTPL		2,082,979,265		—		—		—		—		—		2,082,979,265
Financial liabilities designated at FVTPL 1		10,088,600,213		—		—		—		—		—		10,088,600,213
Derivatives (trading) 2		2,307,993,521		—		—		—		—		—		2,307,993,521
Derivatives (hedge)		—		10,070,190		—		—		—		—		10,070,190
Deposit liabilities 3		6,819,371,625		—		—		—		—		—		6,819,371,625
Borrowings		7,771,843,528		5,329,426,599		2,015,024,991		4,101,825,134		1,553,452,225		—		20,771,572,477
Other financial liabilities		16,349,365		2,032,090,684		8,545,723		28,456,303		91,630,986		8,755,567		2,185,828,628
Guaranteed payments and commitment 4		4,190,717,005		—		—		—		—		—		4,190,717,005


LB UK Private Real Estate Investment Trust No.18 1	—	28,941,213
Alpha Spain Real Estate Private Investment Trust 1 1	—	67,622,466
Hanwha US Equity Strategy Private Real Estate Fund 3	—	180,885,304
Korea Investment US Amazon Logistics Private Real Estate Investment Trust NO. 1 1	20,900,000	20,800,000
GVA Europe Real Estate Investment Trust No.2 1	95,000,000	95,000,000
KB Global Contents Private Investment Fund	4,500,000	—
GVA Europe Pre-IPO Private Investment Trust No.1	20,000,000	—
LIFE Global Reits Pre-IPO General Private Investment Trust 1	59,470,000	—
KB KBSTAR US Short-Term IG Corporate Bond ETF	50,000,000	—
KB Wisestar Private Real Estate Fund Investment Trust No. 2 1	67,100,000	—
Associates
KB Special Purpose Acquisition Company No.17 1	—	500
KB Special Purpose Acquisition Company No.18 1	—	1,000
KB Special Purpose Acquisition Company No.19 1	—	1,000
KB Special Purpose Acquisition Company No.20 1	—	1,000
KB Special Purpose Acquisition Company No.21	10,000	—
KB Special Purpose Acquisition Company No.22	10,000	—
KB Special Purpose Acquisition Company No.23	5,000	—
KB Special Purpose Acquisition Company No.24	25,000	—
KB New Paradigm Agriculture Venture Fund	—	625,000
KB-KDBC New Technology Business Investment Fund	—	2,600,000
KBTS Technology Venture Private Equity Fund	—	1,296,000
KB-SJ Tourism Venture Fund	—	400,000
KB Shinjasanaubo Fund	—	132,000
KB-Brain KOSDAQ Scale-Up Fund	—	4,800,000
KB SPROTT Renewable Private Equity Fund I	2,499,360	—
KB-Stonebridge Secondary Private Equity Fund	1,248,439	631,500
KB-NAU Special Situation Corporate Restructuring Private Equity Fund	660,000	2,352,793
Project Vanilla Co., Ltd. 1	—	525,344
KB Bio Private Equity Fund III Ltd. 1	—	10,000,000
KB-KTB Technology Venture Fund	4,000,000	—
KB Digital Platform Fund	5,000,000	—
KB-SOLIDUS Healthcare Investment Fund	1,000,000	—
KB-GeneN Medical Venture Fund 1	2,000,000	—
KB-BridgePole Venture Investment Fund	850,000	—
KB-Kyobo New Mobility Power Fund	3,000,000	—
JS Private Equity Fund III	1,700,000	—
Mirae Asset Mobility Investment Fund I	2,000,000	—
KB-FT 1st Green Growth Investment Fund	2,000,000	—
THE CHAEUL FUND NO.1 2	1,000,000	—
POSITIVE Sobujang Venture Fund No.1	2,000,000	—
KB-NP Green ESG New Technology Venture Capital Fund	3,740,000	—
Hisstory 2022 Fintech Fund	2,000,000	—
PEBBLES-MW M·C·E New Technology Investment Fund 1st	2,000,000	—
KB Star REIT	45,523,300	—
KB Bio Private Equity Investment Fund IV	7,500,000	—
Nextrade Co., Ltd.	9,700,000	—
Apollo REIT PropCo LLC 1	19,968,049	19,968,049
Others
Star-Lord General Investors Private Real Estate Investment Company No.10	20,000,000	—
KB NA Compass Energy Private Special Asset Fund 1	606,975	21,823,276
Meritz Private Real Estate Fund 9-2	1,486	5,306
KB Global Core Bond Securities Master Fund(Bond)	—	5,000,000
KB Global Platform Fund	3,200,000	2,460,000