Form 6-K
Table of Contents

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 2003

 


 

Kookmin Bank

(Translation of registrant’s name into English)

 


 

9-1, 2-Ga, Namdaemun-Ro, Jung-Gu, Seoul, Korea 100-703

(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     X         Form 40-F             

 

Indicate by check mark if the registrant is submitting the Form 6-K in paper as permitted by Regulation S-T Rule 101(b)(1):        

 

Note: Regulation S-T Rule 101(b)(1) only permits the submission in paper of a Form 6-K if submitted solely to provide an attached annual report to security holders.

 

Indicate by check mark if the registrant is submitting the Form 6-K in paper as permitted by Regulation S-T Rule 101(b)(7):             

 

Note: Regulation S-T Rule 101(b)(7) only permits the submission in paper of a Form 6-K if submission to furnish a report or other document that the registration foreign private issuer must furnish and make public under the laws of the jurisdiction in which the registrant is incorporated, domiciled or legally organized (the registrant’s “home country”), or under the rules of the home country exchange on which the registrant’s securities are traded, as long as the report or other document is not a press release, is not required to be and has not been distributed to the registrant’s security holders, and if discussing a material event, has already been the subject of a From 6-K submission or other Commission filing on EDGAR.

 

Indicate by check mark whether by furnishing the information contained in this Form, the registrant is also thereby furnishing the information to the Commission pursuant to Rule 12g3-2(b) under the Securities Exchange Act of 1934.

 

Yes              No     X    

 


 


Table of Contents

 

TABLE OF CONTENTS

 

Summary of Business Report

    

4

1.      Introduction to the Bank

    

5

1.1.  Business Purpose

    

5

1.2.  History

    

5

1.3.  Capital Structure

    

5

1.4.  Dividend

    

11

2.      Business

    

12

2.1.  Business Overview

    

12

2.2.  Market Shares

    

12

2.3.  Source and Use of Funds

    

14

2.4.  Principal Banking Activities

    

16

2.5.  Property, Plants and Equipment

    

20

2.6.  Other Details Relevant to Investment Decision

    

21

3.      Financial Information

    

23

4.      Auditors’ Report

    

24

4.1.  Report of the Independent Auditor

    

24

4.2.  Compensation to the Independent Auditor

    

24

5.      Corporate Governance and Affiliated Companies

    

25

5.1.  Board of Directors

    

25

5.2.  Audit Committee

    

25

5.3.  Voting Rights of Shareholders

    

26

5.4.  Compensation to the Directors

    

26

5.5.  Affiliated Companies

    

26

6.      Equity Securities

    

28

6.1.  Major Shareholders

    

28

6.2.  Market Price Information for the Previous Six Months

    

28

 

 

 

 

2


Table of Contents

7.      Directors, Senior Management and Employees

    

29

7.1.  Executive Directors

    

29

7.2.  Non-Executive Directors

    

29

7.3.  Senior Management

    

30

7.4.  Employees

    

30

7.5.  Labor Union

    

30

8.      Related Party Transaction

    

31

8.1.  Transactions with the Largest Shareholders and Etc.

    

31

8.2.  Transactions with Shareholders (Other than the Largest Shareholders and Etc.), Directors and Employees.

    

33

9.      Exhibits

    

35

9.1.  List of Financial Statements

    

35

 

 

 

 

3


Table of Contents

 

Summary of Business Report

 

On March 31, 2003, Kookmin Bank filed a business report with the Financial Supervisory Commission of Korea pursuant to the Securities and Exchange Act of Korea (the “Business Report”). This is a summary of the Business Report translated into English. Non-material or previously disclosed portions were omitted or abridged.

 

All references to “Kookmin Bank” mean Kookmin Bank on a non-consolidated basis, and all references to “we” or “us” “the Bank” mean Kookmin Bank and, as the context may require, its subsidiaries. Kookmin Bank means a new entity established by a merger with former Kookmin Bank and H&CB on the merger date of October 31, 2001. Sometimes we refer it to New Kookmin Bank. On the other hand, we use the “Former Kookmin Bank” for the name of the former Kookmin Bank, which had been another entity before it merged H&CB.

 

We were formed through a merger between the Former Kookmin Bank and H&CB, which merged into a new corporation named “Kookmin Bank” effective November 1, 2001. Accordingly, financial information in this Business Report since the merger date reflects the impact of the merger. Under generally accepted accounting principles in Korea, the Former Kookmin Bank is deemed the accounting acquiror of H&CB in the merger, and we have accounted for the acquisition using the purchase method of accounting. However, trust accounts are not accounted by the purchase method accounting according to the Korean Financial Supervisory Service’s guidelines.

 

Therefore, unless indicated otherwise, any comparative description or table of year 2000 or before 1) for bank accounts is based on the Former Kookmin Bank’s results and 2) for trust accounts is based on simple consolidated numbers of Former Kookmin Bank’s and H&CB’s results.

 

All references to “Won” or “W” in this document are to the currency of the Republic of Korea.

 

4


Table of Contents

 

1.    Introduction to the Bank

 

1.1.   Business Purpose

 

The objective of the Bank is to engage in the following business activities:

 

    The banking business as prescribed by the Bank Act; and

 

    The other business permitted by the Bank Act or other Korea laws.

 

1.2.   History

 

    November 1, 2001
Incorporated and Listed on the New York Stock Exchange

 

    November 9, 2001
Listed on the Korea Stock Exchange

 

    September 23, 2002
Integrated two brand operations onto a single information technology platform in connection with the merger

 

    December 4, 2002
Entered into a strategic alliance agreement with ING Bank N.V., which replaced the prior investment agreement with H&CB

 

1.3.   Capital Structure

 

1.3.1.   Common Shares

 

Kookmin Bank has authority to issue a total of 1,000,000,000 shares of capital stock according to its articles of incorporation. Kookmin Bank’s articles of incorporation also provide that it is authorized to issue shares of preferred stock up to one-half of all of the issued and outstanding shares of common stock. On completion of the merger between Former Kookmin Bank and H&CB, New Kookmin Bank issued 299,697,462 common shares.

 

Upon the resolution of shareholders’ meeting held on March 22, 2002, Kookmin Bank issued additional 17,979,954 common shares in connection with stock dividend of 6 percent.

 

On November 25, 2002 Goldman Sachs Capital Koryo, L.P. converted all of its convertible bonds into common shares. According to this conversion, on November 30, Kookmin Bank issued 10,581,269 common shares and distributed them to Goldman Sachs Capital Koryo, L.P.

 

5


Table of Contents

 

As of December 31, 2002, 328,258,685 shares of common stock were issued and outstanding with paid-in capital of 1,641,293 million Won. All of the issued and outstanding shares are fully-paid and non-assessable, and are in registered form.

 

1.3.2.   Convertible Bonds

 

In June 1999, Goldman Sachs Capital Koryo, L.P., a fund managed by The Goldman Sachs Group, Inc., acquired (through its wholly-owned subsidiaries Goldman Sachs Capital Chosun, Ltd.and Goldman Sachs Capital Shilla, Ltd.) an interest in the Former Kookmin Bank in return for an investment of US$500 million in new common shares and convertible bonds, consisting of W360 billion of new common shares (17,768,870 common shares at W20,260 per share, as adjusted for the merger ratio of 1.688346:1) and US$200 million principal amount of subordinated convertible bonds with a conversion price of W14,200 per common share. As a result of the merger with H&CB and other adjustment events, the conversion price was adjusted to W22,124 per share.

 

On November 25, 2002, Goldman Sachs Capital Koryo, L.P. converted all of its convertible bonds into common shares of 10,581,269 and beneficially owned 5.13% of our outstanding common shares as of such date following that conversion.

 

1.3.3.   Treasury Stock

 

The following table shows the purchase and disposition of our treasury stock.

 

(Unit: in thousands of Won unless otherwise indicated)

 

Date


  

Reason


  

Number of shares


  

Cost


  

Average cost per one share


November 15, 2001

  

Acquisition of fractional shares in the course of the merger

  

41,548 shares

  

1,794,885

  

43,200 Won

December 24, 2001

  

Disposition due to exercise of stock option by a grantee

  

10,000 shares

  

432,003

  

48,900 Won

April 3, 2002

  

Acquisition of fractional shares due to stock dividend

  

36,089 shares

  

2,071,557

  

57,400 Won

May 14, 2002

  

Disposition pursuant to the Bank Act of Korea

  

31,548 shares

  

1,601,944

  

50,788 Won

July 30 ~ October 23, 20021

  

Acquisition pursuant to the Securities and Exchange Act of Korea

  

3,000,000 shares

  

147,632,489

  

49,210 Won

December 24, 2002

  

Disposition due to exercise of stock option by a grantee

  

10,000 shares

  

492,294

  

49,229 Won


  
  
  
  

Total

  

—  

  

Outstanding balance: 3,026,089 shares

  

148,972,690

  

—  


  
  
  
  

1.   On July 26, 2002, Kookmin Bank’s board of directors approved and ratified to purchase the treasury stock up to 3 million shares for the purpose of introducing one of a stock purchase program and an employee stock ownership plan in order to provide a wide range of benefit with the employees.

 

6


Table of Contents
1.3.4.   Stock Option

 

The following table is the breakdown of stock options Kookmin Bank has granted to the directors and employees. It describes grant date, position, exercise period, price and the number of options.

 

(As of December 31, 2002, Units: in Won, shares)

 

Grant date


  

Name of the grantee


  

Position when granted


  

Exercise period


  

Exercise price


  

Number of granted options*


  

Number of exercised options


  

Number of exercisable options


        

From


  

To


           

31-Oct-98

  

Jungtae Kim

  

Chairman, President & CEO

  

01-Nov-01

  

31-Oct-04

  

5,000

  

400,000

  

320,000

  

80,000

27-Feb-99

  

Choulju Lee

  

Auditor & Executive Director

  

28-Feb-02

  

27-Feb-05

  

13,900

  

30,000

  

30,000

  

0

27-Feb-99

  

Seungdong Kim

  

Executive Vice President

  

28-Feb-02

  

27-Feb-05

  

13,900

  

20,054

  

20,054

  

0

27-Feb-99

  

Youngjo Joo

  

Executive Vice President

  

28-Feb-02

  

27-Feb-05

  

13,900

  

30,000

  

30,000

  

0

27-Feb-99

  

Seokil Cho

  

Executive Vice President

  

28-Feb-02

  

27-Feb-05

  

13,900

  

20,054

  

20,054

  

0

27-Feb-99

  

Hongshik Chung

  

Executive Vice President

  

28-Feb-02

  

27-Feb-05

  

13,900

  

20,000

  

20,000

  

0

27-Feb-99

  

Bonghwan Cho

  

Executive Vice President

  

28-Feb-02

  

27-Feb-05

  

13,900

  

30,000

  

30,000

  

0

27-Feb-99

  

Sunjoo Kim

  

Executive Vice President

  

28-Feb-02

  

27-Feb-05

  

13,900

  

10,000

  

10,000

  

0

27-Feb-99

  

Jehyung Jo

  

Executive Vice President

  

28-Feb-02

  

27-Feb-05

  

13,900

  

30,000

  

30,000

  

0

27-Feb-99

  

Hogi Baek

  

Executive Vice President

  

28-Feb-02

  

27-Feb-05

  

13,900

  

20,000

  

20,000

  

0

27-Feb-99

  

Bruce Willison

  

Non Executive Director

  

28-Feb-02

  

27-Feb-05

  

13,900

  

10,000

  

10,000

  

0

28-Feb-00

  

Jan Op de Beeck

  

Director & Executive Vice President

  

01-Mar-03

  

28-Feb-06

  

27,600

  

22,490

  

0

  

22,490

28-Feb-00

  

Sungchul Kim

  

Executive Vice President

  

01-Mar-03

  

28-Feb-06

  

27,600

  

30,000

  

0

  

30,000

28-Feb-00

  

Woojung Lee

  

Executive Vice President

  

01-Mar-03

  

28-Feb-06

  

27,600

  

30,000

  

0

  

30,000

28-Feb-00

  

Kukju Kwon

  

Non Executive Director

  

01-Mar-03

  

28-Feb-06

  

27,600

  

4,800

  

0

  

4,800

28-Feb-00

  

Sunjin Kim

  

Non Executive Director

  

01-Mar-03

  

28-Feb-06

  

27,600

  

7,000

  

0

  

7,000

28-Feb-00

  

Joon Park

  

Non Executive Director

  

01-Mar-03

  

28-Feb-06

  

27,600

  

4,800

  

0

  

4,800

28-Feb-00

  

Moonsoul Chung

  

Non Executive Director

  

01-Mar-03

  

28-Feb-06

  

27,600

  

7,000

  

0

  

7,000

28-Feb-00

  

Juhyun Yoon

  

Non Executive Director

  

01-Mar-03

  

28-Feb-06

  

27,600

  

4,800

  

0

  

4,800

28-Feb-00

  

Heungsoon Chang

  

Non Executive Director

  

01-Mar-03

  

28-Feb-06

  

27,600

  

2,486

  

0

  

2,486

28-Feb-00

  

Injoon Kang

  

Non Executive Director

  

01-Mar-03

  

28-Feb-06

  

27,600

  

2,486

  

0

  

2,486

28-Feb-00

  

Sunghee Jwa

  

Non Executive Director

  

01-Mar-03

  

28-Feb-06

  

27,600

  

4,800

  

0

  

4,800

28-Feb-00

  

Seungwoo Nam

  

Non Executive Director

  

01-Mar-03

  

28-Feb-06

  

27,600

  

1,928

  

0

  

1,928

28-Feb-00

  

Woonyoul Choi

  

Non Executive Director

  

01-Mar-03

  

28-Feb-06

  

27,600

  

4,909

  

0

  

4,909

28-Feb-00

  

Kyunghee Yoon

  

Non Executive Director

  

01-Mar-03

  

28-Feb-06

  

27,600

  

7,000

  

0

  

7,000

28-Feb-00

  

Sungcheon Hong

  

Head of Regional Head Office

  

01-Mar-03

  

28-Feb-06

  

27,600

  

6,821

  

0

  

6,821

28-Feb-00

  

Miro Yoon

  

Head of Regional Head Office

  

01-Mar-03

  

28-Feb-06

  

27,600

  

3,333

  

0

  

3,333

28-Feb-00

  

Hakdong Shin

  

Head of Regional Head Office

  

01-Mar-03

  

28-Feb-06

  

27,600

  

6,821

  

0

  

6,821

28-Feb-00

  

Hakyeon Jeong

  

Head of Regional Head Office

  

01-Mar-03

  

28-Feb-06

  

27,600

  

10,000

  

0

  

10,000

28-Feb-00

  

Jeongyeon Kim

  

Head of Regional Head Office

  

01-Mar-03

  

28-Feb-06

  

27,600

  

10,000

  

0

  

10,000

28-Feb-00

  

Jongwhan Byun

  

Head of Regional Head Office

  

01-Mar-03

  

28-Feb-06

  

27,600

  

10,000

  

0

  

10,000

28-Feb-00

  

Samyoung Lee

  

Head of Regional Head Office

  

01-Mar-03

  

28-Feb-06

  

27,600

  

6,821

  

0

  

6,821

28-Feb-00

  

Wonki Kim

  

Head of Regional Head Office

  

01-Mar-03

  

28-Feb-06

  

27,600

  

6,821

  

0

  

6,821

28-Feb-00

  

Bangyeoul Kim

  

Head of Regional Head Office

  

01-Mar-03

  

28-Feb-06

  

27,600

  

3,333

  

0

  

3,333

28-Feb-00

  

Byungman Lim

  

Head of Regional Head Office

  

01-Mar-03

  

28-Feb-06

  

27,600

  

3,333

  

0

  

3,333

24-Mar-01

  

Youngil Kim

  

Executive Vice President

  

25-Mar-04

  

24-Mar-07

  

25,100

  

30,000

  

0

  

30,000

24-Mar-01

  

Jongin Park

  

Executive Vice President

  

25-Mar-04

  

24-Mar-07

  

25,100

  

30,000

  

0

  

30,000

24-Mar-01

  

Wonbae Yoon

  

Non Executive Director

  

25-Mar-04

  

24-Mar-07

  

25,100

  

2,318

  

0

  

2,318

24-Mar-01

  

Jaekyu Lee

  

Non Executive Director

  

25-Mar-04

  

24-Mar-07

  

25,100

  

2,318

  

0

  

2,318


*   Some numbers of the granted options have been adjusted due to the merger and the early retirement of the grantees

 

7


Table of Contents

 

Grant date


  

Name of the grantee


  

Position when granted


  

Exercise period


  

Exercise price


  

Number of granted options*


    

Number of exercised options


  

Number of exercisable options


        

From


  

To


             

24-Mar-01

  

Chulsoo Ahn

  

Non Executive Director

  

25-Mar-04

  

24-Mar-07

  

25,100

  

1,916

    

0

  

1,916

24-Mar-01

  

Jaehan Kim

  

Head of Regional Head Office

  

25-Mar-04

  

24-Mar-07

  

25,100

  

10,000

    

0

  

10,000

24-Mar-01

  

Jongok Na

  

Head of Regional Head Office

  

25-Mar-04

  

24-Mar-07

  

25,100

  

10,000

    

0

  

10,000

24-Mar-01

  

Kyuho Lee

  

Head of Regional Head Office

  

25-Mar-04

  

24-Mar-07

  

25,100

  

3,275

    

0

  

3,275

18-Mar-00

  

Sanghoon Kim

  

Chairman & CEO

  

19-Mar-03

  

18-Mar-05

  

23,469

  

41,460

    

0

  

41,460

18-Mar-00

  

Jongmin Lee

  

Auditor & Executive Director

  

19-Mar-03

  

18-Mar-05

  

23,469

  

14,807

    

0

  

14,807

18-Mar-00

  

Sejong Oh

  

Non Executive Director

  

19-Mar-03

  

18-Mar-05

  

23,469

  

2,961

    

0

  

2,961

18-Mar-00

  

Inkie Kim

  

Non Executive Director

  

19-Mar-03

  

18-Mar-05

  

23,469

  

2,961

    

0

  

2,961

18-Mar-00

  

Jihong Kim

  

Non Executive Director

  

19-Mar-03

  

18-Mar-05

  

23,469

  

2,961

    

0

  

2,961

18-Mar-00

  

Jinho Hwang

  

Non Executive Director

  

19-Mar-03

  

18-Mar-05

  

23,469

  

2,961

    

0

  

2,961

18-Mar-00

  

Hyungjin Chang

  

Non Executive Director

  

19-Mar-03

  

18-Mar-05

  

23,469

  

2,961

    

0

  

2,961

18-Mar-00

  

Ikrae Kim

  

Non Executive Director

  

19-Mar-03

  

18-Mar-05

  

23,469

  

2,961

    

0

  

2,961

18-Mar-00

  

Bongho Paick

  

Non Executive Director

  

19-Mar-03

  

18-Mar-05

  

23,469

  

2,961

    

0

  

2,961

18-Mar-00

  

Bockwoan Kim

  

Executive Vice President

  

19-Mar-03

  

18-Mar-05

  

23,469

  

11,845

    

0

  

11,845

18-Mar-00

  

Yoohwan Kim

  

Executive Vice President

  

19-Mar-03

  

18-Mar-05

  

23,469

  

11,845

    

0

  

11,845

18-Mar-00

  

Dukhyun Kim

  

Executive Vice President

  

19-Mar-03

  

18-Mar-05

  

23,469

  

11,845

    

0

  

11,845

15-Mar-01

  

Sanghoon Kim

  

Chairman & CEO

  

16-Mar-04

  

15-Mar-09

  

28,027

  

29,614

    

0

  

29,614

15-Mar-01

  

Jongmin Lee

  

Auditor & Executive Director

  

16-Mar-04

  

15-Mar-09

  

28,027

  

14,807

    

0

  

14,807

15-Mar-01

  

Inkie Kim

  

Non Executive Director

  

16-Mar-04

  

15-Mar-09

  

28,027

  

2,961

    

0

  

2,961

15-Mar-01

  

Hyungjin Chang

  

Non Executive Director

  

16-Mar-04

  

15-Mar-09

  

28,027

  

2,961

    

0

  

2,961

15-Mar-01

  

Jihong Kim

  

Non Executive Director

  

16-Mar-04

  

15-Mar-09

  

28,027

  

2,961

    

0

  

2,961

15-Mar-01

  

Bongho Paick

  

Non Executive Director

  

16-Mar-04

  

15-Mar-09

  

28,027

  

1,870

    

0

  

1,870

15-Mar-01

  

Ikrae Kim

  

Non Executive Director

  

16-Mar-04

  

15-Mar-09

  

28,027

  

2,961

    

0

  

2,961

15-Mar-01

  

Seungheon Han

  

Non Executive Director

  

16-Mar-04

  

15-Mar-09

  

28,027

  

1,870

    

0

  

1,870

15-Mar-01

  

Youngseok Kim

  

Non Executive Director

  

16-Mar-04

  

15-Mar-09

  

28,027

  

1,870

    

0

  

1,870

15-Mar-01

  

Sewoong Lee

  

Non Executive Director

  

16-Mar-04

  

15-Mar-09

  

28,027

  

2,961

    

0

  

2,961

15-Mar-01

  

Changki Min

  

Non Executive Director

  

16-Mar-04

  

15-Mar-09

  

28,027

  

2,961

    

0

  

2,961

15-Mar-01

  

Bockwoan Kim

  

Executive Vice President

  

16-Mar-04

  

15-Mar-09

  

28,027

  

11,845

    

0

  

11,845

15-Mar-01

  

Yoohwan Kim

  

Executive Vice President

  

16-Mar-04

  

15-Mar-09

  

28,027

  

11,845

    

0

  

11,845

15-Mar-01

  

Dukhyun Kim

  

Executive Vice President

  

16-Mar-04

  

15-Mar-09

  

28,027

  

11,845

    

0

  

11,845

15-Mar-01

  

Yoonok Hyun

  

Executive Vice President

  

16-Mar-04

  

15-Mar-09

  

28,027

  

11,845

    

0

  

11,845

15-Mar-01

  

Taigon Kim

  

Executive Vice President

  

16-Mar-04

  

15-Mar-09

  

28,027

  

11,845

    

0

  

11,845

15-Mar-01

  

Byungsang Kim

  

Executive Vice President

  

16-Mar-04

  

15-Mar-09

  

28,027

  

11,845

    

0

  

11,845

15-Mar-01

  

Byungjin Kim

  

Executive Vice President

  

16-Mar-04

  

15-Mar-09

  

28,027

  

11,845

    

0

  

11,845

15-Mar-01

  

Jihan Koo

  

Head of Regional Head Office

  

16-Mar-04

  

15-Mar-09

  

28,027

  

2,961

    

0

  

2,961

15-Mar-01

  

Dongsoon Park

  

Head of Regional Head Office

  

16-Mar-04

  

15-Mar-09

  

28,027

  

2,961

    

0

  

2,961

15-Mar-01

  

Hoosang Chang

  

Head of Regional Head Office

  

16-Mar-04

  

15-Mar-09

  

28,027

  

2,961

    

0

  

2,961

15-Mar-01

  

Sanghoon Lee

  

Head of Regional Head Office

  

16-Mar-04

  

15-Mar-09

  

28,027

  

2,961

    

0

  

2,961

15-Mar-01

  

Jaein Suh

  

Head of Regional Head Office

  

16-Mar-04

  

15-Mar-09

  

28,027

  

2,961

    

0

  

2,961

15-Mar-01

  

Sunghyun Chung

  

Head of Regional Head Office

  

16-Mar-04

  

15-Mar-09

  

28,027

  

2,961

    

0

  

2,961

15-Mar-01

  

Jonghwa Lee

  

Head of Regional Head Office

  

16-Mar-04

  

15-Mar-09

  

28,027

  

2,961

    

0

  

2,961

15-Mar-01

  

Sangwon Lee

  

Head of Regional Head Office

  

16-Mar-04

  

15-Mar-09

  

28,027

  

2,961

    

0

  

2,961

15-Mar-01

  

Joonsup Chang

  

Head of Regional Head Office

  

16-Mar-04

  

15-Mar-09

  

28,027

  

2,961

    

0

  

2,961

15-Mar-01

  

Dongshin Yang

  

General Manager

  

16-Mar-04

  

15-Mar-09

  

28,027

  

592

    

0

  

592

15-Mar-01

  

Jaekyung Lee

  

General Manager

  

16-Mar-04

  

15-Mar-09

  

28,027

  

592

    

0

  

592

15-Mar-01

  

Yeonkun Chung

  

General Manager

  

16-Mar-04

  

15-Mar-09

  

28,027

  

592

    

0

  

592

15-Mar-01

  

Youngno Lee

  

General Manager

  

16-Mar-04

  

15-Mar-09

  

28,027

  

592

    

0

  

592

15-Mar-01

  

Kitaek Hong

  

General Manager

  

16-Mar-04

  

15-Mar-09

  

28,027

  

592

    

0

  

592

15-Mar-01

  

Soondo Park

  

General Manager

  

16-Mar-04

  

15-Mar-09

  

28,027

  

592

    

0

  

592

15-Mar-01

  

Joonho Park

  

General Manager

  

16-Mar-04

  

15-Mar-09

  

28,027

  

592

    

0

  

592

15-Mar-01

  

Yangjin Kim

  

General Manager

  

16-Mar-04

  

15-Mar-09

  

28,027

  

592

    

0

  

592

15-Mar-01

  

Kwangdae Park

  

General Manager

  

16-Mar-04

  

15-Mar-09

  

28,027

  

592

    

0

  

592

 

8


Table of Contents

Grant date


  

Name of the grantee


  

Position when granted


  

Exercise period


  

Exercise price


  

Number of granted options*


    

Number of exercised options


  

Number of exercisable options


        

From


  

To


             

15-Mar-01

  

Sungwan Choi

  

General Manager

  

16-Mar-04

  

15-Mar-09

  

28,027

  

370

    

0

  

370

15-Mar-01

  

Junghaeng Lee

  

General Manager

  

16-Mar-04

  

15-Mar-09

  

28,027

  

592

    

0

  

592

15-Mar-01

  

Anseok Cho

  

General Manager

  

16-Mar-04

  

15-Mar-09

  

28,027

  

592

    

0

  

592

15-Mar-01

  

Sangcheol Lee

  

General Manager

  

16-Mar-04

  

15-Mar-09

  

28,027

  

592

    

0

  

592

15-Mar-01

  

Taejoo Yoon

  

General Manager

  

16-Mar-04

  

15-Mar-09

  

28,027

  

10

    

0

  

10

15-Mar-01

  

Youngman Lee

  

General Manager

  

16-Mar-04

  

15-Mar-09

  

28,027

  

520

    

0

  

520

15-Mar-01

  

Youngsoo Kim

  

General Manager

  

16-Mar-04

  

15-Mar-09

  

28,027

  

592

    

0

  

592

15-Mar-01

  

Jongyoung Yoon

  

General Manager

  

16-Mar-04

  

15-Mar-09

  

28,027

  

592

    

0

  

592

15-Mar-01

  

Jaehong Yoo

  

General Manager

  

16-Mar-04

  

15-Mar-09

  

28,027

  

592

    

0

  

592

15-Mar-01

  

Changhwan Bae

  

General Manager

  

16-Mar-04

  

15-Mar-09

  

28,027

  

592

    

0

  

592

15-Mar-01

  

Sian Heo

  

General Manager

  

16-Mar-04

  

15-Mar-09

  

28,027

  

370

    

0

  

370

15-Mar-01

  

Seokwon Choi

  

General Manager

  

16-Mar-04

  

15-Mar-09

  

28,027

  

592

    

0

  

592

15-Mar-01

  

Gilho Seo

  

General Manager

  

16-Mar-04

  

15-Mar-09

  

28,027

  

370

    

0

  

370

15-Mar-01

  

Youngsoo Shin

  

General Manager

  

16-Mar-04

  

15-Mar-09

  

28,027

  

370

    

0

  

370

15-Mar-01

  

Joonbo Cho

  

General Manager

  

16-Mar-04

  

15-Mar-09

  

28,027

  

592

    

0

  

592

15-Mar-01

  

Kiyoul Seo

  

General Manager

  

16-Mar-04

  

15-Mar-09

  

28,027

  

592

    

0

  

592

15-Mar-01

  

Byungdoo Ahn

  

General Manager

  

16-Mar-04

  

15-Mar-09

  

28,027

  

592

    

0

  

592

15-Mar-01

  

Kookshin Kang

  

General Manager

  

16-Mar-04

  

15-Mar-09

  

28,027

  

592

    

0

  

592

15-Mar-01

  

Ingyu Choi

  

General Manager

  

16-Mar-04

  

15-Mar-09

  

28,027

  

592

    

0

  

592

15-Mar-01

  

Hyungyoung Lee

  

General Manager

  

16-Mar-04

  

15-Mar-09

  

28,027

  

592

    

0

  

592

15-Mar-01

  

Youngrok Han

  

General Manager

  

16-Mar-04

  

15-Mar-09

  

28,027

  

592

    

0

  

592

15-Mar-01

  

Hyeyoung Kim

  

General Manager

  

16-Mar-04

  

15-Mar-09

  

28,027

  

592

    

0

  

592

15-Mar-01

  

Kihyun Kim

  

General Manager

  

16-Mar-04

  

15-Mar-09

  

28,027

  

592

    

0

  

592

15-Mar-01

  

Sungshin Cho

  

General Manager

  

16-Mar-04

  

15-Mar-09

  

28,027

  

592

    

0

  

592

15-Mar-01

  

Youngmo Lee

  

General Manager

  

16-Mar-04

  

15-Mar-09

  

28,027

  

592

    

0

  

592

15-Mar-01

  

Jongik Kim

  

General Manager

  

16-Mar-04

  

15-Mar-09

  

28,027

  

592

    

0

  

592

15-Mar-01

  

Kwangmook Park

  

General Manager

  

16-Mar-04

  

15-Mar-09

  

28,027

  

592

    

0

  

592

15-Mar-01

  

Yongseung Lee

  

General Manager

  

16-Mar-04

  

15-Mar-09

  

28,027

  

592

    

0

  

592

15-Mar-01

  

Sunggil Lee

  

General Manager

  

16-Mar-04

  

15-Mar-09

  

28,027

  

370

    

0

  

370

                 
           

16-Nov-01

  

Jungtae Kim

  

President & CEO

  

17-Nov-04

  

16-Nov-09

       

500,000

    

0

  

500,000

16-Nov-01

  

Jungtae Kim

  

President & CEO

  

17-Nov-04

  

16-Nov-09

  

X1

  

200,0002

    

0

  

200,000

16-Nov-01

  

Sanghoon Kim

  

Chairman

  

17-Nov-04

  

16-Nov-09

       

150,000

    

0

  

150,000

                 
           

22-Mar-02

  

Choulju Lee

  

Auditor & Executive Director

  

23-Mar-05

  

22-Mar-10

       

30,000

    

0

  

30,000

22-Mar-02

  

Henry Cornell

  

Non Executive Director

  

23-Mar-05

  

22-Mar-10

       

10,000

    

0

  

10,000

22-Mar-02

  

Keunshik Oh

  

Non Executive Director

  

23-Mar-05

  

22-Mar-10

  

Y3

  

10,000

    

0

  

10,000

22-Mar-02

  

Dongsoo Chung

  

Non Executive Director

  

23-Mar-05

  

22-Mar-10

     

10,000

    

0

  

10,000

22-Mar-02

  

Jihong Kim

  

Non Executive Director

  

23-Mar-05

  

22-Mar-10

       

10,000

    

0

  

10,000

22-Mar-02

  

Timothy Hartman

  

Non Executive Director

  

23-Mar-05

  

22-Mar-10

       

10,000

    

0

  

10,000


1.   Exercise price = 51,200 Won x (1 + the increase rate of KOSPI Banking Industry Index x 0.4) / 100. The increase rate of KOSPI Banking Industry Index = (KOSPI Banking Industry Index as of the starting date of exercise period - 207.25) / 207.25 x 100.
2.   Conditional options up to 200,000: Additional shares shall be granted if the average closing price of Kookmin Bank’s stock from August 17, 2004 to November 16, 2004 (or for the three months prior to his resignation, if he resigns earlier than his original tenure) is higher than the stock prices of any other bank listed on the Korea Stock Exchange. The number of options to be granted shall be based on total score, which calculated by the earned total scores of both ROE and market capitalization on November 17, 2004 (or on the date of his resignation, if he resigns earlier than his original tenure). The additional shares will not be exercisable if the CEO works less than 18 months or the earned total score is less than 80 points.
3.   Exercise price = 57,100 Won x (1 + the increase rate of KOSPI Banking Industry Index x 0.4). The increase rate of KOSPI Banking Industry Index = (KOSPI Banking Industry Index as of the starting date of exercise period - KOSPI Banking Industry Index as of the grant date) / KOSPI Banking Industry Index as of the grant date.

 

9


Table of Contents

Grant date


  

Name of the grantee


  

Position when granted


  

Exercise period


  

Exercise price


  

Number of granted options*


  

Number of exercised options


  

Number of exercisable options


        

From


  

To


           

22-Mar-02

  

Sunjin Kim

  

Non Executive Director

  

23-Mar-05

  

22-Mar-10

  

Y

  

3,000

  

0

  

3,000

22-Mar-02

  

Moonsoul Chung

  

Non Executive Director

  

23-Mar-05

  

22-Mar-10

       

3,000

  

0

  

3,000

22-Mar-02

  

Kyunghee Yoon

  

Non Executive Director

  

23-Mar-05

  

22-Mar-10

       

3,000

  

0

  

3,000

                        
              

22-Mar-02

  

Jongkyoo Yoon

  

Executive Vice President

  

23-Mar-05

  

22-Mar-10

  

57,100

  

30,000

  

0

  

30,000

22-Mar-02

  

Bonghwan Cho

  

Executive Vice President

  

23-Mar-05

  

22-Mar-10

  

57,100

  

30,000

  

0

  

30,000

22-Mar-02

  

Jaein Suh

  

Executive Vice President

  

23-Mar-05

  

22-Mar-10

  

57,100

  

30,000

  

0

  

30,000

22-Mar-02

  

Bumsoo Choi

  

Executive Vice President

  

23-Mar-05

  

22-Mar-10

  

57,100

  

30,000

  

0

  

30,000

22-Mar-02

  

Bockwoan Kim

  

Executive Vice President

  

23-Mar-05

  

22-Mar-10

  

57,100

  

30,000

  

0

  

30,000

22-Mar-02

  

Kitaek Hong

  

Executive Vice President

  

23-Mar-05

  

22-Mar-10

  

57,100

  

30,000

  

0

  

30,000

22-Mar-02

  

Sunghyun Chung

  

Executive Vice President

  

23-Mar-05

  

22-Mar-10

  

57,100

  

30,000

  

0

  

30,000

22-Mar-02

  

Kisup Shin

  

Executive Vice President

  

23-Mar-05

  

22-Mar-10

  

57,100

  

30,000

  

0

  

30,000

22-Mar-02

  

Sungkyu Lee

  

Executive Vice President

  

23-Mar-05

  

22-Mar-10

  

57,100

  

30,000

  

0

  

30,000

22-Mar-02

  

Byungsang Kim

  

Executive Vice President

  

23-Mar-05

  

22-Mar-10

  

57,100

  

30,000

  

0

  

30,000

22-Mar-02

  

Jongyoung Yoon

  

Head of Regional Head Office

  

23-Mar-05

  

22-Mar-10

  

57,100

  

15,000

  

0

  

15,000

22-Mar-02

  

Jaeil Song

  

Head of Regional Head Office

  

23-Mar-05

  

22-Mar-10

  

57,100

  

15,000

  

0

  

15,000

22-Mar-02

  

Hyunggoo Shim

  

Head of Regional Head Office

  

23-Mar-05

  

22-Mar-10

  

57,100

  

15,000

  

0

  

15,000

22-Mar-02

  

Junghaeng Lee

  

Head of Regional Head Office

  

23-Mar-05

  

22-Mar-10

  

57,100

  

15,000

  

0

  

15,000

22-Mar-02

  

Joonsup Chang

  

Head of Regional Head Office

  

23-Mar-05

  

22-Mar-10

  

57,100

  

15,000

  

0

  

15,000

22-Mar-02

  

Youngno Lee

  

Head of Regional Head Office

  

23-Mar-05

  

22-Mar-10

  

57,100

  

15,000

  

0

  

15,000

22-Mar-02

  

Dongsoon Park

  

Head of Regional Head Office

  

23-Mar-05

  

22-Mar-10

  

57,100

  

15,000

  

0

  

15,000

22-Mar-02

  

Sungbin Kim

  

Head of Regional Head Office

  

23-Mar-05

  

22-Mar-10

  

57,100

  

15,000

  

0

  

15,000

22-Mar-02

  

Sungbok Park

  

Head of Regional Head Office

  

23-Mar-05

  

22-Mar-10

  

57,100

  

15,000

  

0

  

15,000

22-Mar-02

  

Yeonkun Chung

  

Head of Regional Head Office

  

23-Mar-05

  

22-Mar-10

  

57,100

  

15,000

  

0

  

15,000

22-Mar-02

  

Mahnsoo Song

  

Head of Regional Head Office

  

23-Mar-05

  

22-Mar-10

  

57,100

  

15,000

  

0

  

15,000

22-Mar-02

  

Jeongyeon Kim

  

Head of Regional Head Office

  

23-Mar-05

  

22-Mar-10

  

57,100

  

5,000

  

0

  

5,000

22-Mar-02

  

Hakyeon Jeong

  

Head of Regional Head Office

  

23-Mar-05

  

22-Mar-10

  

57,100

  

5,000

  

0

  

5,000

22-Mar-02

  

Jongwhan Byun

  

Head of Regional Head Office

  

23-Mar-05

  

22-Mar-10

  

57,100

  

5,000

  

0

  

5,000

22-Mar-02

  

Jaehan Kim

  

Head of Regional Head Office

  

23-Mar-05

  

22-Mar-10

  

57,100

  

5,000

  

0

  

5,000

22-Mar-02

  

Jongok Na

  

Head of Regional Head Office

  

23-Mar-05

  

22-Mar-10

  

57,100

  

5,000

  

0

  

5,000

26-Jul-02

  

Donald MacKenzie

  

Executive Vice President

  

27-Jul-05

  

26-Jul-10

  

58,800

  

30,000

  

0

  

30,000

                             
  
    
         

Total

                 

2,681,339

  

540,108

    
                             
  
    

 

10


Table of Contents

 

1.4.   Dividend

 

The following table shows dividend policy and the related information for the last three years.

 

(Units: in millions of Won unless indicated otherwise)

 

    

2002


  

2001


  

2000


Net income for the period

  

1,310,291

  

740,565

  

719,700

Earnings per share (Won)

  

4,1231

  

3,706

  

2,403

Maximum amount available for dividend

  

1,192,6432

  

604,984

  

614,046

Total dividend amount

  

325,232

  

119,866

  

151,009

Dividend payout ratio (%)

  

24.823

  

16.19

  

20.76

Cash dividend per common share (Won)

  

1,000

  

100

  

500

Stock dividend per common share (%)

  

—  

  

6

  

—  

Dividend per preferred share (Won)

  

—  

  

—  

  

50

Dividend yield ratio (%)

  

2.384

  

0.80

  

3.36

Net asset value per common share (Won)

  

30,6145

  

29,742

  

12,533

Ordinary income per common share (Won)

  

4,123

  

3,706

  

2,403

    
  
  

1.   Earnings per share = net income (1,310,291,195,314 Won) / weighted average number of shares (317,786,872 shares)
2.   Maximum amount available for dividend = retained earnings before appropriations (1,319,970 millions of Won) + transferred from prior years’ reserves (5,417 millions of Won) - appropriated amount pursuant to the relevant rules and regulations (132,744 millions of Won)
3.   Dividend payout ratio = total dividend amount for common shares (325,232,596,000 Won) / net income (1,310,291,195,314 Won).
4.   Dividend yield ratio = dividend per share (1,000 Won) / market closing price of December 31, 2002 (42,000 Won)
5.   Net asset value per common share = total shareholders’ equity (10,049,396 millions of Won) / total issued shares as of December 31, 2002 (328,258,685 shares).

 

11


Table of Contents

2.    Business

 

2.1.   Business Overview

 

We are the largest commercial bank in Korea in terms of assets, deposits, branch network and retail customer base. Our primary focus is branch-based lending to and deposit-taking from retail customers and small and medium-sized enterprises. The principal components of our business are general household, mortgage and small and medium-sized enterprise lending, credit card operations and investment trust account management business and capital market activities. We also make loans and provide banking services to large domestic corporate customers.

 

We have developed one of the most extensive domestic branch networks, with 1,190 domestic branches and sub-branches as of December 31, 2002. Our extensive branch network and retail customer base have provided us with a source of stable and low cost funding.

 

2.2.   Market Shares

 

2.2.1.   Market Share of Deposits in Won

 

The following table shows the market share of Kookmin Bank among 9 nationwide commercial banks in terms of deposits in Won (which includes certificate of deposits) as of the dates indicated. Numbers for 2000 are proforma results of Former Kookmin Bank and H&CB.

 

For the year 2002, Seoul Bank’s figures are included in Hana Bank’s figures due to the merger of Hana Bank and Seoul Bank.

 

(Units: in 100 millions of Won, %)

 

    

December 31, 2002


  

December 31, 2001


  

December 31, 2000


    

Amount


  

%


  

Amount


  

%


  

Amount


  

%


Kookmin Bank

  

1,220,260

  

31.7

  

1,140,587

  

33.7

  

1,024,784

  

33.8

Woori Bank

  

589,095

  

15.3

  

513,903

  

15.2

  

486,305

  

16.0

Hana Bank

  

534,570

  

13.9

  

322,652

  

9.5

  

275,777

  

9.1

Chohung Bank

  

426,902

  

11.1

  

355,967

  

10.5

  

312,699

  

10.3

Shinhan Bank

  

331,479

  

8.6

  

301,285

  

8.9

  

263,513

  

8.7

Korea Exchange Bank

  

318,792

  

8.3

  

253,284

  

7.5

  

215,049

  

7.1

Korea First Bank

  

227,993

  

5.9

  

171,800

  

5.1

  

163,302

  

5.4

KorAm Bank

  

202,233

  

5.2

  

171,834

  

5.1

  

167,843

  

5.5

Seoul Bank

  

—  

  

—  

  

151,458

  

4.5

  

123,404

  

4.1

    
  
  
  
  
  

Total

  

3,851,324

  

100

  

3,382,770

  

100

  

3,032,676

  

100

    
  
  
  
  
  

 

12


Table of Contents

 

2.2.2.   Market Share of Household Loans

 

The following table shows the market share of Kookmin Bank among 9 nationwide commercial banks in terms of household loans as of the dates indicated. Numbers for 2000 are proforma results of Former Kookmin Bank and H&CB.

 

For the year 2002, Seoul Bank’s figures are included in Hana Bank’s figures due to the merger of Hana Bank and Seoul Bank.

 

(Units: in 100 millions of Won, %)

 

    

December 31, 2002


  

December 31, 2001


  

December 31, 2000


    

Amount


  

%


  

Amount


  

%


  

Amount


  

%


Kookmin Bank

  

743,096

  

41.1

  

601,536

  

47.2

  

488,734

  

56.2

Hana Bank

  

235,987

  

13.1

  

105,143

  

8.2

  

53,337

  

6.1

Woori Bank

  

228,530

  

12.6

  

132,501

  

10.4

  

84,896

  

9.8

Shinhan Bank

  

159,927

  

8.9

  

107,729

  

8.4

  

56,987

  

6.5

Chohung Bank

  

154,565

  

8.6

  

90,723

  

7.1

  

53,855

  

6.2

Korea First Bank

  

105,997

  

5.9

  

78,874

  

6.2

  

50,326

  

5.8

Korea Exchange Bank

  

102,062

  

5.6

  

64,053

  

5.0

  

36,752

  

4.2

Seoul Bank

  

—  

  

—  

  

53,156

  

4.2

  

17,435

  

2.0

KorAm Bank

  

75,759

  

4.2

  

41,807

  

3.3

  

27,742

  

3.2

    
  
  
  
  
  

Total

  

1,805,923

  

100

  

1,275,522

  

100

  

870,064

  

100

    
  
  
  
  
  

 

2.2.3.   Market Share of Mortgage Loans

 

The following table shows the market share of Kookmin Bank among 9 nationwide commercial banks in terms of mortgage loans as of the dates indicated. Numbers for 2000 are proforma results of Former Kookmin Bank and H&CB.

 

For the year 2002, Seoul Bank’s figures are included in Hana Bank’s figures due to the merger of Hana Bank and Seoul Bank.

 

(Units: in 100 millions of Won, %)

 

    

December 31, 2002


  

December 31, 2001


  

December 31, 2000


    

Amount


  

%


  

Amount


  

%


  

Amount


  

%


Kookmin Bank

  

338,706

  

79.9

  

253,495

  

87.4

  

226,460

  

90.7

Hana Bank

  

25,014

  

5.9

  

7,552

  

2.6

  

2,017

  

0.8

Woori Bank

  

23,037

  

5.4

  

10,998

  

3.8

  

11,042

  

4.4

Korea Exchange Bank

  

15,584

  

3.7

  

8,719

  

3.0

  

2,394

  

1.0

KorAm Bank

  

8,592

  

2.0

  

2,432

  

0.8

  

2,264

  

0.9

Shinhan Bank

  

7,709

  

1.8

  

2,943

  

1.0

  

2,374

  

1.0

Seoul Bank

  

—  

  

—  

  

1,078

  

0.4

  

862

  

0.3

Chohung Bank

  

4,126

  

1.0

  

2,326

  

0.8

  

1,702

  

0.7

Korea First Bank

  

1,308

  

0.3

  

658

  

0.2

  

550

  

0.2

    
  
  
  
  
  

Total

  

424,076

  

100

  

290,201

  

100

  

249,665

  

100

    
  
  
  
  
  

 

13


Table of Contents

 

2.3.   Source and Use of Funds

 

2.3.1.   Source of Funds

 

(Unit: in millions of Won)

 

         

December 31, 2002


  

December 31, 2001


  

December 31, 2000


         

Average balance


  

Interest rate (%)


  

Average balance


  

Interest rate (%)


  

Average balance


  

Interest rate (%)


Won currency

  

Deposits and Mutual installment

  

113,157,719

  

4.21

  

63,743,997

  

5.53

  

47,038,144

  

6.18

    

Certificate of deposit

  

2,119,900

  

4.82

  

2,022,414

  

6.10

  

1,910,630

  

6.99

    

Borrowings

  

4,568,873

  

4.45

  

3,784,147

  

4.85

  

3,317,619

  

6.43

    

Call money

  

1,039,249

  

4.02

  

403,937

  

4.11

  

562,807

  

4.89

    

Other

  

14,254,281

  

6.70

  

9,112,858

  

7.57

  

5,799,092

  

10.78

         
  
  
  
  
  

Subtotal

       

135,140,022

  

4.49

  

79,067,353

  

5.74

  

58,628,292

  

6.67

         
  
  
  
  
  

Foreign currency

  

Deposits

  

1,096,544

  

1.28

  

952,701

  

3.08

  

882,344

  

5.20

    

Borrowings

  

2,269,774

  

2.45

  

2,018,537

  

5.47

  

2,725,810

  

7.10

    

Call money

  

293,151

  

1.65

  

223,156

  

3.67

  

193,324

  

6.31

    

Finance debentures issued

  

1,071,848

  

3.57

  

1,430,804

  

5.68

  

1,521,343

  

7.75

    

Other

  

23,087

  

—  

  

15,081

  

—  

  

13,666

  

—  

         
  
  
  
  
  

Subtotal

       

4,754,404

  

2.67

  

4,640,279

  

5.32

  

5,336,487

  

7.20

         
  
  
  
  
  

Other

  

Total Shareholders’ Equity

  

14,586,550

  

—  

  

7,463,687

  

—  

  

5,001,918

  

—  

    

Allowance for credit losses

  

63,039

  

—  

  

353,183

  

—  

  

519,496

  

—  

    

Other

  

3,717,379

  

—  

  

4,065,899

  

—  

  

3,032,325

  

—  

         
  
  
  
  
  

Subtotal

       

18,366,968

  

—  

  

11,882,769

  

—  

  

8,553,739

  

—  

         
  
  
  
  
  

Total

       

158,261,394

  

3.92

  

95,590,401

  

5.00

  

72,518,518

  

5.92

         
  
  
  
  
  

 

14


Table of Contents

 

2.3.2.   Use of Funds

 

(Unit: in millions of Won)

 

         

December 31, 2002


  

December 31, 2001


  

December 31, 2000


         

Average balance


  

Interest rate (%)


  

Average balance


  

Interest rate (%)


  

Average balance


  

Interest rate (%)


Won currency

  

Due from banks

  

1,041,865

  

4.62

  

1,339,572

  

5.60

  

3,276,652

  

7.39

    

Securities

  

30,180,305

  

6.32

  

23,861,424

  

6.78

  

18,030,147

  

9.38

    

Loans

  

105,188,481

  

7.79

  

53,575,082

  

8.87

  

38,301,330

  

9.71

    

Advances for customers

  

91,583

  

4.35

  

127,704

  

3.84

  

337,987

  

4.62

    

Call loan

  

736,571

  

4.36

  

1,765,067

  

4.80

  

524,653

  

6.59

    

Private placement corporate bonds

  

1,631,524

  

7.32

  

2,065,179

  

10.32

  

1,878,194

  

9.21

    

Credit card accounts

  

5,719,359

  

10.25

  

912,210

  

17.63

  

565,673

  

10.54

    

Other

  

374,718

  

—  

  

614,014

  

—  

  

145,983

  

—  

    

Allowance for credit losses (-)

  

1,437,960

  

—  

  

1,297,930

  

—  

  

1,224,823

  

—  

         
  
  
  
  
  

Subtotal

       

143,526,446

  

7.66

  

82,962,322

  

8.50

  

61,835,796

  

9.73

         
  
  
  
  
  

Foreign currency

  

Due from banks

  

253,390

  

1.35

  

121,994

  

3.28

  

1,335,708

  

7.50

    

Securities

  

1,302,214

  

7.97

  

1,079,359

  

9.13

  

961,991

  

12.48

    

Loans

  

3,216,042

  

3.39

  

3,870,853

  

5.66

  

3,073,781

  

7.69

    

Call loan

  

188,465

  

1.98

  

185,466

  

4.15

  

209,321

  

6.88

    

Bills bought

  

835,356

  

4.71

  

1,045,331

  

7.60

  

719,683

  

10.16

    

Other

  

15,739

  

—  

  

116,454

  

—  

  

—  

  

—  

    

Allowance for credit losses (-)

  

267,194

  

—  

  

266,613

  

—  

  

452,120

  

—  

         
  
  
  
  
  

Subtotal

       

5,544,012

  

4.95

  

6,152,844

  

7.11

  

5,848,355

  

9.40

         
  
  
  
  
  

Other

  

Cash

  

914,639

  

—  

  

530,451

  

—  

  

421,390

  

—  

    

Fixed assets used for business purpose

  

3,126,812

  

—  

  

1,462,413

  

—  

  

1,298,813

  

—  

    

Other

  

5,149,485

  

—  

  

4,482,371

  

—  

  

3,114,164

  

—  

         
  
  
  
  
  

Subtotal

       

9,190,936

  

—  

  

6,475,235

  

—  

  

4,834,367

  

—  

         
  
  
  
  
  

Total

       

158,261,394

  

7.12

  

95,590,401

  

7.83

  

72,518,518

  

9.06

         
  
  
  
  
  

 

15


Table of Contents

 

2.4.   Principal Banking Activities

 

2.4.1.    Deposits

 

The following table shows the average balances of our deposits for the past three years and ending balances as of the dates indicated.

 

(Unit: in millions of Won)

 

         

December 31, 2002


  

December 31, 2001


  

December 31, 2000


         

Average balance


  

Ending balance


  

Average balance


  

Ending balance


  

Average balance


  

Ending balance


Deposits in Won

  

Demand deposits

  

10,654,651

  

12,987,742

  

4,832,281

  

10,824,005

  

3,720,546

  

4,173,966

    

Time & savings deposits

  

93,347,999

  

93,630,423

  

53,496,908

  

89,080,935

  

40,279,328

  

43,495,480

    

Mutual installment deposits

  

8,058,664

  

7,491,115

  

6,469,772

  

8,871,193

  

4,632,965

  

5,521,161

    

Mutual installment for housing

  

4,463,601

  

4,872,637

  

928,398

  

4,128,489

  

73,831

  

204,111

    

Certificates of deposits

  

2,119,900

  

3,044,089

  

2,022,414

  

1,154,056

  

1,910,630

  

2,424,947

         
  
  
  
  
  

Subtotal

       

118,644,815

  

122,026,006

  

67,749,773

  

114,058,678

  

50,617,300

  

55,819,665

         
  
  
  
  
  

Deposits in foreign currency

  

1,096,544

  

1,083,647

  

952,701

  

1,102,626

  

858,330

  

702,481

         
  
  
  
  
  

Trust deposits

  

Money trust

  

17,214,936

  

15,356,285

  

20,375,456

  

19,739,709

  

22,279,546

  

20,349,257

    

Property trust

  

16,783,690

  

26,852,684

  

5,409,033

  

12,559,922

  

92,838

  

875,984

         
  
  
  
  
  

Subtotal

       

33,998,626

  

42,208,969

  

25,784,489

  

32,299,631

  

22,372,384

  

21,225,241

         
  
  
  
  
  

Total

       

153,739,985

  

165,318,622

  

94,486,963

  

147,460,935

  

73,848,014

  

77,747,387

         
  
  
  
  
  

 

2.4.2.    Average Deposit per Domestic Branch

 

The following table shows the average balances of our deposits per domestic branch as of the dates indicated.

 

(Unit: in millions of Won)

 

      

December 31, 2002


    

December 31, 2001


    

December 31, 2000


Deposits

    

121,137

    

133,548

    

120,422

Deposits in Won

    

120,336

    

132,320

    

119,089

      
    
    

 

16


Table of Contents

 

2.4.3.   Average Deposit per Employee

 

The following table shows the average balances of our deposits per employee as of the dates indicated.

 

(Unit: in millions of Won)

 

      

December 31, 2002


    

December 31, 2001


    

December 31, 2000


Deposits

    

7,256

    

7,243

    

5,917

Deposits in Won

    

7,208

    

7,176

    

5,852

      
    
    

 

2.4.4.   Loan Balances

 

The following table shows the average balances of our loans for the past three years and ending balances as of the dates indicated.

 

(Unit: in millions of Won)

 

    

December 31, 2002


  

December 31, 2001


  

December 31, 2000


    

Average balance


  

Ending balance


  

Average balance


  

Ending balance


  

Average balance


  

Ending balance


Loans in Won

  

105,117,047

  

116,472,105

  

53,498,087

  

94,698,769

  

38,301,330

  

43,436,111

Loans in foreign currency

  

3,228,857

  

4,417,176

  

3,924,562

  

4,174,237

  

3,077,642

  

2,970,653

Advances to customers

  

106,380

  

52,430

  

244,158

  

199,831

  

337,987

  

240,992

    
  
  
  
  
  

Subtotal

  

108,452,284

  

120,941,711

  

57,666,807

  

99,072,837

  

41,716,959

  

46,647,756

    
  
  
  
  
  

Trust account loans

  

789,614

  

575,412

  

2,194,851

  

1,117,817

  

4,216,018

  

3,170,756

    
  
  
  
  
  

Total

  

109,241,898

  

121,517,123

  

59,861,658

  

100,190,654

  

45,932,977

  

49,818,512

    
  
  
  
  
  

 

2.4.5.   Loan Balances as of December 31, 2002 by Remaining Maturities

 

(Unit: in millions of Won)

 

    

Less than 1 year


  

More than 1 year~less than 3 years


  

More than 3 years~less than 5 years


  

More than 5 years


  

Total


Loans in Won

  

52,978,906

  

45,900,006

  

5,496,579

  

12,096,614

  

116,472,105

Loans in foreign currencies

  

2,881,739

  

644,270

  

293,480

  

597,687

  

4,417,176

    
  
  
  
  

 

17


Table of Contents

 

2.4.6.   Loan Balances by Uses

 

The following table shows the banking account balances of our loans in Won by uses as of the dates indicated.

 

(Unit: in millions of Won)

 

         

December 31, 2002


  

December 31, 2001


  

December 31, 2000


Loans to enterprise

  

Loans for operations

  

35,369,066

  

29,286,707

  

20,899,277

    

Loans for equipments

  

5,963,631

  

4,434,447

  

4,393,664

Loans to households

       

40,477,483

  

34,648,918

  

14,215,303

Loans to public sector & others

  

Loans for operations

  

738,632

  

730,598

  

1,914,841

    

Loans for equipment

  

39,414

  

57,211

  

49,508

Loans on property formation savings

       

95,252

  

154,069

  

244,479

Loans for housing

       

33,731,435

  

25,342,969

  

1,663,904

Inter-bank loans

       

20,941

  

36,110

  

51,343

Others

       

36,251

  

7,740

  

3,792

         
  
  

Total

       

116,472,105

  

94,698,769

  

43,436,111

         
  
  

 

2.4.7.   Loan to Deposit Ratio

 

The following table shows loan to deposit ratio as of indicated dates.

 

(Units: in millions of Won, %)

 

    

December 31, 2002


  

December 31, 2001


  

December 31, 2000


Loans1 (A)

  

105,117,047

  

53,498,087

  

38,301,330

Deposits2 (B)

  

118,644,815

  

67,749,773

  

50,617,300

    
  
  

Loan to deposit ratio (A/B)

  

88.60

  

78.96

  

75.67

    
  
  

 

2.4.8.   Acceptances and Guarantees

 

(Unit: in millions of Won)

 

      

December 31, 2002


    

December 31, 2001


    

December 31, 2000


Confirmed

    

1,031,698

    

3,521,970

    

3,035,968

Unconfirmed

    

1,306,878

    

1,369,723

    

1,183,433

      
    
    

Total

    

2,338,576

    

4,891,693

    

4,219,401

      
    
    

1.   Average balance of loans in Won for 12 months ended each indicated date
2.   Average balance of deposits in Won for 12 months ended each indicated date. The balances include certificate of deposits

 

18


Table of Contents

 

2.4.9.   Breakdown of Securities Investment

 

The following table shows the average balances of our securities for the past three years and ending balances as of indicated dates.

 

(Unit: in millions of Won)

 

         

December 31, 2002


  

December 31, 2001


  

December 31, 2000


         

Average balance


  

Ending balance


  

Average balance


  

Ending balance


  

Average balance


  

Ending balance


Securities in Won (Banking account)

  

Monetary stabilization bonds

  

2,834,534

  

3,269,269

  

3,571,137

  

3,139,925

  

2,773,897

  

1,973,079

    

Government and public bonds

  

4,272,946

  

5,252,321

  

4,454,446

  

4,592,251

  

4,095,760

  

4,595,840

    

Debentures

  

13,154,258

  

13,378,717

  

11,410,904

  

14,691,304

  

8,431,478

  

9,151,880

    

Stocks

  

2,146,149

  

1,661,682

  

1,309,134

  

2,154,449

  

1,004,648

  

1,142,113

    

Others

  

7,809,012

  

7,162,134

  

3,115,803

  

7,547,153

  

1,724,364

  

1,588,295

                   
  
  
  

Subtotal

       

30,216,899

  

29,724,123

  

23,861,424

  

32,125,082

  

18,030,147

  

18,451,207

                   
  
  
  

Securities in Won (Trust account)

  

Monetary stabilization bonds

  

1,309,515

  

583,379

  

3,228,021

  

2,725,071

  

3,654,209

  

3,365,883

    

Government and public bonds

  

2,023,503

  

1,323,195

  

2,990,549

  

3,059,777

  

1,894,815

  

2,816,167

    

Debentures

  

8,035,960

  

7,600,794

  

7,635,765

  

7,613,829

  

6,966,409

  

6,828,929

    

Stocks

  

904,921

  

924,514

  

672,845

  

890,151

  

568,650

  

547,797

    

Others

  

3,945,649

  

3,821,884

  

4,340,103

  

3,913,328

  

5,718,473

  

3,576,520

         
  
  
  
  
  

Securities in foreign currency (Trust Account)

       

559,964

  

747,253

  

118,147

  

370,415

  

39,711

  

0

         
  
  
  
  
  

Subtotal

       

16,779,512

  

15,001,019

  

18,985,430

  

18,572,571

  

18,842,267

  

17,135,296

         
  
  
  
  
  

Securities in foreign currency (Banking account)

  

Foreign securities

  

945,199

  

960,749

  

736,084

  

909,730

  

631,040

  

583,229

    

Off-shore foreign securities

  

320,423

  

255,878

  

343,275

  

382,542

  

370,664

  

316,868

                   
  
  
  

Subtotal

       

1,265,622

  

1,216,627

  

1,079,359

  

1,292,272

  

1,001,704

  

900,097

                   
  
  
  

Total

       

48,262,033

  

45,941,769

  

43,926,213

  

51,989,925

  

37,874,118

  

36,486,600

                   
  
  
  

 

2.4.10.   Trust Account (money trust)

 

(Unit: in millions of Won)

 

    

December 31, 2002


  

December 31, 2001


  

December 31, 2000


    

Total amount trusted


  

Trust fees


  

Total amount trusted


  

Trust fees


  

Total amount trusted


  

Trust fees


Return-guaranteed trust

  

1,528

  

59,530

  

25,551

  

- 17,147

  

581,332

  

- 77,157

Performance trust

  

33,997,098

  

241,444

  

25,758,938

  

353,890

  

21,821,152

  

308,287

    
  
  
  
  
  

Total

  

33,998,626

  

300,974

  

25,784,489

  

336,743

  

22,402,484

  

231,130

    
  
  
  
  
  

 

19


Table of Contents

 

2.4.11.   Credit Card

 

2.4.11.1.   BC Card

 

(Unit: in millions of Won unless indicated otherwise)

 

         

As of or for the years ended December 31


         

2002


  

2001


  

2000


Number of card holders (Person)

  

Corporate

  

58,090

  

23,811

  

17,942

         
  
  
    

Individual

  

4,748,427

  

4,017,950

  

3,053,224

         
  
  

Number of merchants

       

295,668

  

262,619

  

196,264

         
  
  

Profit

  

Sales1

  

27,216,500

  

22,272,700

  

12,538,100

         
  
  
    

Fee revenue

  

1,039,710

  

819,399

  

440,653

         
  
  

 

2.4.11.2.  Kookmin Card2

 

(Unit: in millions of Won unless indicated otherwise)

 

         

As of or for the years ended December 31


         

2002


  

2001


  

2000


Number of card holders (Person)

  

Corporate

  

153,425

  

105,600

  

137,657

         
  
  
    

Individual

  

11,638,968

  

9,605,946

  

8,036,140

         
  
  

Number of merchants

       

1,569,103

  

1,675,176

  

1,230,838

         
  
  

Profit

  

Sales1

  

83,860,180

  

65,382,300

  

37,875,680

         
  
  
    

Fee revenue3

  

155,545

  

142,700

  

115,355

         
  
  

 

2.5.   Property, Plants and Equipment

 

2.5.1.   Branch Network

 

As of December 31, 2002, we had 1,128 branches and 62 sub-branches in Korea, the largest number of branches among Korean commercial banks. We believe that our extensive branch network in Korea and retail customer base provide us with a source of stable and relatively low cost funding. Approximately 42% of our branches and sub-branches are located in Seoul.

 


1.   Includes credit card receivables and cash advances.
2.   Sales include credit card receivables and cash advances. This is the result of Kookmin Credit Card, our KOSDAQ-registered, majority-owned subsidiary.
3.   Kookmin Bank recognizes fee revenues under a fee agreement with Kookmin Credit Card. These amounts are the revenues Kookmin Bank received from Kookmin Credit Card pursuant to the fee agreement. Besides, Kookmin Bank also recognizes non-operating revenue in connection with consolidation of Kookmin Credit Card under equity method.

 

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We also have three subsidiaries in Luxemburg, Hong Kong and London and three branches in Tokyo, New York and Auckland.

 

2.5.2.   Property

 

Our registered office and corporate headquarters are located at 9-1, 2-Ga, Namdaemun-Ro, Jung-Gu, Seoul, Korea. The book value of all the properties owned by us as of December 31, 2002 was 1,591,439 million Won. In addition to the properties owned by us, we also leased 1,026,344 million Won of properties for our branch space. We do not own any material properties outside of Korea.

 

2.5.3.   Automated Banking Machines

 

We have established an extensive network of automated banking machines, which are located in branches and in Autobanks (unmanned outlets). These automated banking machines consist of ATMs, cash dispensers and passbook printers. As of December 31, 2002, we had 6,102 ATMs, 2,748 cash dispensers and 896 passbook printers.

 

2.6.   Other Details Relevant to Investment Decision

 

2.6.1.   BIS Risk-adjusted Capital Ratios

 

(Units: in millions of Won, %)

 

    

December 31, 2002


  

December 31, 2001


  

December 31, 2000


Risk-adjusted capital (A)

  

14,439,313

  

11,750,856

  

6,297,886

Risk-weighted assets (B)

  

138,703,021

  

114,849,227

  

56,346,867

    
  
  

BIS ratios (A/B)

  

10.41

  

10.23

  

11.18

    
  
  

 

2.6.2.  Non-performing Loans1

 

(Units: in millions of Won unless indicated otherwise)

 

December 31, 2002


 

December 31, 2001


 

Change


Amount

 

NPL to total loans

 

Amount

 

NPL to total loans

 

Amount

 

NPL to total loans

2,509,073

 

1.90 %

 

2,954,464

 

2.62 %

 

- 445,391

 

- 0.72 percentage points


1.   Non-performing loans are defined as those loans that are past due more than 90 days or that are placed non-accrual status according to the Financial Supervisory Service’s guidelines.

 

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2.6.3.   Loan Loss Allowances

 

The following table shows the balance of our loan loss allowances as of the dates indicated.

 

(Units: in millions of Won)

 

           

December 31, 2002


  

December 31, 2001


  

December 31, 2000


Loan loss allowance

    

Domestic

  

2,365,898

  

2,255,068

  

1,822,208

      

Overseas

  

12,798

  

16,111

  

4,492

      

Total

  

2,378,696

  

2,271,179

  

1,826,700

           
  
  

Write-offs for the 12 month periods ended December 31

         

1,527,311

  

1,090,029

  

558,480

           
  
  

 

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3.    Financial Information

 

See 9. Exhibits / 9.1. List of Financial Statements.

 

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4.    Auditors’ Report

 

4.1.   Report of the Independent Auditor

 

See 9. Exhibits / 9.1. List of Financial Statements.

 

4.2.   Compensation to the Independent Auditor

 

4.2.1.    Audit Service

 

The aggregate remuneration paid by us to the independent auditor for the last three years of the year ended December 31, 2002, 2001 and 2000 was 900 million Won, 1,090 million Won and 490 million Won, respectively.

 

4.2.2.    Service Other than Audit

 

The following is a description for the last three years on services and the relevant fees and commissions we paid to the independent auditor for the respective service.

 

(Units: in millions of Won unless indicated otherwise)

 

Year


  

Service description


  

Amount of payment


2002

  

Project for improving the accounting process

  

690

    

Advisory service for the conversion process in US GAAP

  

1,450

         

2001

  

Due diligence on the assets and liabilities in connection with the merger

  

2,400

    

US GAAP conversion for 2000

  

US$ 2,700 thousand

    

US GAAP conversion for New York Stock Exchange listing of New Kookmin Bank

  

US$ 7,480 thousand

    

Advisory service for tax in connection with the merger

  

300

    

US GAAP conversion

  

US$ 4,950 thousand

         

2000 for H&CB

  

US GAAP conversion for New York Stock Exchange listing

  

US$ 6,100 thousand

    

US GAAP consulting service

  

US$ 820 thousand

         

 

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5.    Corporate Governance and Affiliated Companies

 

5.1.   Board of Directors

 

The board of directors holds regular meetings every quarter. The board of directors consists of directors and resolves each following matter:

 

    matters relating to business objectives and performance evaluation;

 

    matters relating to amendments of the Articles of Incorporation;

 

    matters relating to budget and accounting including salaries of directors and employees;

 

    matters relating to major organizational changes such as dissolution, business transfer and merger;

 

    matters relating to internal control standards; or

 

    other matters determined by law and the board of directors regulations

 

We currently have six management committees that serve under the board:

 

    the Board Steering Committee;

 

    the Management Strategy Committee;

 

    the Risk Management Committee;

 

    the Audit Committee;

 

    the Compensation Committee; and

 

    the Non Executive Director Nomination Committee.

 

Each committee member is appointed by the board of directors, except for members of the Audit Committee, who are elected at the general meeting of stockholders. For list of our directors, see 7. Directors, Senior Management and Employees / 7.1. Executive Directors and 7.2. Non-Executive Directors.

 

5.2.   Audit Committee

 

Audit Committee oversees our financial reporting and approves the appointment of and interaction with our independent auditors, compliance officers, management personnel and other committee advisors. The committee also reviews our financial information, auditor’s examinations, key financial statement issues and the administration of our financial affairs by the board of directors. In connection with the general meetings of stockholders, the committee examines the agenda for, and financial statements and other reports to be submitted

 

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by, the board of directors to each general meeting of stockholders. The committee holds regular meetings every quarter.

 

5.3.   Voting Rights of Shareholders

 

Each outstanding share of our common stock is entitled to one vote per share.

 

If the method of written resolution at the general meeting of shareholders is adopted by resolution of the board of directors, at which the convening of the general meeting of shareholders is determined, the shareholders may exercise their voting rights in writing without participating the meeting in person. In this case, the Bank is required to send the documents and references necessary for exercise of voting rights, together with the convening notice.

 

If a shareholder intends to exercise his/her voting rights in writing, the shareholder is required to fill in and submit to the Bank one day before the date set for the general meeting of shareholders.

 

5.4.   Compensation to the Directors

 

For the 12 months ended December 31, 2002, the aggregate of the remuneration paid by us to 1) the Chairman, President & CEO and our other executive directors and 2) our non-executive directors was 3,146 million Won, 515 million Won, respectively. The following table shows the breakdown of the remuneration.

 

(Units: in millions of Won)

 

      

The aggregate remuneration paid


    

Limit for the remuneration resolved by shareholders’ meeting


    

Average amount of the payment per person


Executive Directors

    

3,146

    

—  

    

681

Non Executive Directors

    

515

    

—  

    

47

      
    
    
      

3,661

    

8,000

    

728

      
    
    

 

As part of remuneration, Kookmin Bank also granted stock options to directors. See 1. Introduction to the Bank / 1.3. Capital Structure / 1.3.4. Stock Option.

 

5.5.   Affiliated Companies

 

5.5.1.    List of Affiliates

 

As of December 31, 2002, we have following affiliates.

 

    KB Investment Co., Ltd.

 

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    Kookmin Credit Card Co., Ltd.

 

    KB Investment Trust Management Co., Ltd.

 

    KB Real Estate Trust Co., Ltd.

 

    KB Credit Information Co., Ltd.

 

    Kookmin Data System Corporation

 

    Kookmin Futures Co., Ltd.

 

    ING Life Korea Ltd.

 

    Kookmin Bank Luxemburg. S.A.

 

    Kookmin Bank International (London) Ltd.

 

    Kookmin Finance Hong Kong Ltd.

 

5.5.2.   Operating Results of Affiliates

 

(Unit: in millions of Won)

 

         

Accounting results of the latest fiscal year


Company name


  

Closing date


  

Total Assets


  

Total Liabilities


  

Total Equities


  

Sales


  

Net income


KB Investment

  

December 31, 2002

  

99,979

  

26,206

  

73,773

  

18,744

  

-33,883

Kookmin Credit Card

  

December 31, 2002

  

13,381,247

  

12,463,020

  

918,227

  

3,156,230

  

-260,888

KB Investment Trust Management

  

March 31, 2002

  

60,074

  

14,945

  

45,129

  

34,161

  

19,243

KB Real Estate Trust

  

December 31, 2002

  

300,671

  

212,943

  

87,728

  

59,771

  

8,915

KB Credit Information

  

December 31, 2002

  

20,772

  

6,821

  

13,951

  

34,179

  

3,639

Kookmin Data System Corporation

  

December 31, 2002

  

18,290

  

4,671

  

13,619

  

43,290

  

2,008

Kookmin Futures

  

March 31, 2002

  

46,826

  

23,396

  

23,430

  

14,622

  

3,519

ING Life Korea

  

March 31, 2002

  

1,135,081

  

1,083,209

  

51,872

  

712,355

  

37,241

Kookmin Bank Luxemburg

  

December 31, 2002

  

459,080

  

453,951

  

5,129

  

17,829

  

7,501

Kookmin Bank International (London)

  

December 31, 2002

  

344,265

  

296,527

  

47,738

  

11,327

  

742

Kookmin Finance Hong Kong

  

December 31, 2002

  

293,205

  

231,773

  

61,432

  

22,957

  

12,186

    
  
  
  
  
  

 

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6.    Equity Securities

 

6.1.   Major Shareholders

 

The following table presents information regarding the beneficial ownership of our shares at December 31, 2002 by each person known by us to own beneficially more than 5% of our outstanding shares.

 

Name


  

Number of Shares of Common Stock


    

Percentage of Total Outstanding Shares of Common Stock


 

The Government of Korea

  

30,623,761

    

9.33

%

Goldman Sachs

  

16,831,607

    

5.13

%

The Bank of New York1

  

37,728,214

    

11.49

%

    
    

Total

  

85,183,582

    

25.95

%

    
    

 

6.2.   Market Price Information for the Previous Six Months

 

6.2.1.   Common Stock Traded in the Korea Stock Exchange

 

(Unit: in Won, thousands of shares)

 

         

July


  

August


  

September


  

October


  

November


  

December


Registered

  

High

  

62,100

  

56,500

  

57,200

  

46,000

  

45,950

  

47,700

Common Shares

  

Low

  

53,300

  

50,700

  

44,750

  

37,150

  

32,900

  

42,000

         
  
  
  
  
  

Trading Volume

       

26,808

  

18,972

  

30,320

  

50,040

  

50,870

  

29,678

         
  
  
  
  
  

 

6.2.2.   American Depositary Shares Traded in the New York Stock Exchange

 

(Unit: in US$, thousands of shares)

 

         

July


  

August


  

September


  

October


  

November


  

December


American Depositary Shares

  

High

  

51.76

  

47.62

  

46.08

  

36.85

  

34.01

  

40.09

    

Low

  

44.10

  

42.10

  

35.43

  

29.40

  

31.30

  

34.90

         
  
  
  
  
  

Trading Volume

       

8,197

  

5,095

  

6,829

  

10,244

  

8,831

  

4,269

         
  
  
  
  
  

1.   As depositary bank of American Depositary Shares of Kookmin Bank

 

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7.    Directors, Senior Management and Employees

 

As of December 31, 2002, our board of directors, which consists of 3 executive directors and 8 non-executive directors, has the ultimate responsibility for the management of our affairs.

 

7.1.   Executive Directors

 

Our 3 executive directors consist of the chairman, president & CEO and auditor & executive director.

 

The names and positions of our directors with Kookmin Bank’s shares owned are set forth below.

 

Name


  

Date of Birth


  

Position


  

Common Shares Owned


Sanghoon Kim

  

03/13/1942

  

Chairman

  

100

Jungtae Kim

  

08/15/1947

  

President & CEO

  

56,581

Choulju Lee

  

11/22/1939

  

Auditor & Executive Director

  

682

 

7.2.   Non-Executive Directors

 

Our non-executive directors are selected based on the candidates’ talents and skills in diverse areas, such as law, finance, economy, management and accounting. As of December 31, 2002, 8 non-executive directors are in office.

 

Our current non-executive directors with Kookmin Bank’s shares owned are as follows.

 

Name


  

Date of Birth


  

Position


  

Common Shares Owned


Moonsoul Chung

  

03/07/1938

  

Non-Executive Director

  

3,191

Timothy Hartman

  

03/01/1939

  

Non-Executive Director

  

—  

Sunjin Kim

  

06/08/1942

  

Non-Executive Director

  

2,215

Dongsoo Chung

  

09/24/1945

  

Non-Executive Director

  

200

Keunshik Oh

  

09/12/1946

  

Non-Executive Director

  

360

Kyunghee Yoon

  

01/05/1947

  

Non-Executive Director

  

—  

Henry Cornell

  

04/11/1956

  

Non-Executive Director

  

—  

Jihong Kim

  

06/08/1956

  

Non-Executive Director

  

—  

 

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7.3.   Senior Management

 

In addition to the executive directors who are also our executive officers, we currently have the following executive officers:

 

Name


  

Date of Birth


  

Position


  

Common Shares Owned


Jongkyoo Yoon

  

10/13/1955

  

Executive Vice President

  

3,300

Donald MacKenzie

  

12/20/1948

  

Executive Vice President

  

—  

Bonghwan Cho

  

03/30/1950

  

Executive Vice President

  

4,581

Sungchul Kim

  

09/10/1951

  

Executive Vice President

  

3,498

Jaein Suh

  

08/11/1947

  

Executive Vice President

  

3,717

Buhmsoo Choi

  

08/08/1956

  

Executive Vice President

  

—  

Bockwoan Kim

  

11/17/1944

  

Executive Vice President

  

3,140

Youngil Kim

  

07/06/1953

  

Executive Vice President

  

3,327

Kitaek Hong

  

01/16/1948

  

Executive Vice President

  

3,931

Sunghyun Chung

  

08/10/1947

  

Executive Vice President

  

—  

Kisup Shin

  

10/29/1955

  

Executive Vice President

  

280

Seongkyu Lee

  

10/25/1959

  

Executive Vice President

  

—  

Jongin Park

  

03/10/1954

  

Executive Vice President

  

265

Byungsang Kim

  

02/19/1947

  

Executive Vice President

  

634

Woojung Lee

  

07/11/1949

  

Executive Vice President

  

—  

 

7.4.   Employees

 

The following table shows the breakdown of our employees as of December 31, 2002.

 

(Unit: in millions of Won)

 

    

Number of Employees


  

Average Tenure of the full-time employees


  

Total Payment for the 12 Months Period


    

Average Monthly Payment per Person


    

Full-time


  

Contractual


  

Total


          

Male

  

13,288

  

1,234

  

14,522

  

15.60 years

  

824,993

    

4.7

Female

  

5,029

  

7,431

  

12,460

  

12.22 years

  

410,024

    

2.7

    
  
  
  
  
    

Total

  

18,317

  

8,665

  

26,982

  

14.67 years

  

1,235,017

    

3.8

    
  
  
  
  
    

 

7.5.   Labor Union

 

Under Korea Financial Industry Union, we currently have two union chapters following the merger. There are 8,446 members in Former Kookmin Bank chapter and 7,022 members in H&CB chapter.

 

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8.   Related Party Transaction

 

A number of banking transactions are entered into with related parties in the normal course of business. Generally, these transactions include loans, deposits, debt securities and other ordinary course activities relating to our banking business. These transactions are carried out on commercial terms and conditions and at market rates.

 

8.1.   Transactions with the Largest Shareholders and Etc.

 

8.1.1.   Loans to Affiliates

 

(Unit: in millions of Won)

 

Name


  

Relation with the Bank


  

Beginning Balance (January 1, 2002)


  

Increase


  

Decrease


    

Ending Balance (December 31, 2002)


Kookmin Credit Card

  

Affiliate

  

22,526

  

—  

  

1,743

    

20,783

 

 

 

8.1.2.   Guarantees Provided for Affiliates

 

(Unit: in millions of Won)

 

Name


  

Relation with the Bank


    

Beginning Balance (January 1, 2002)


  

Increase


    

Decrease


    

Ending Balance (December 31, 2002)


KB Real Estate Trust

  

Affiliate

    

53

  

—  

    

53

    

0

 

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8.1.3.   Investments in Affiliates

 

(Unit: in millions of Won)

 

Name


  

Relation with the Bank


  

Account


  

Par Value


  

Beginning Balance (January 1, 2002)


  

Increase


  

Decrease


  

Ending Balance (December 31, 2002)


Kookmin Credit Card

  

Affiliate

  

Equity Securities of Affiliate

  

271,825

  

271,825

  

—  

  

—  

  

271,825

KB Real Estate Trust

  

Affiliate

  

Equity Securities of Affiliate

  

79,999

  

79,999

  

—  

  

—  

  

79,999

KB Investment

  

Affiliate

  

Equity Securities of Affiliate

  

31,999

  

31,999

  

12,709

  

—  

  

44,708

KB Investment Trust Management

  

Affiliate

  

Equity Securities of Affiliate

  

30,670

  

30,670

            

30,670

Kookmin Futures

  

Affiliate

  

Equity Securities of Affiliate

  

19,999

  

19,999

  

—  

  

—  

  

19,999

Kookmin Data System

  

Affiliate

  

Equity Securities of Affiliate

  

7,998

  

7,998

  

—  

  

—  

  

7,998

KB Credit Information

  

Affiliate

  

Equity Securities of Affiliate

  

2,520

  

2,520

  

1,398