KB Financial Group Posts 3.3 Trillion KRW Net Profit Last Year, Ranking 2nd Among Financial Groups After Shinhan

Steady Growth in Interest and Fee Income... '3.4 Trillion Won Net Profit' Puts Shinhan Ahead, KB Financial Group Ranks 2nd
KB Securities and KB Kookmin Card Show Strong Non-Bank Performance... KB Insurance Net Profit Down 10.7%

[Asia Economy Reporter Haeyoung Kwon] KB Financial Group recorded a net profit of 3.3118 trillion KRW last year, entering the '3 trillion club' for the third consecutive year. Thanks to steady growth in interest income and fee income, it posted a stable recurring return on equity (ROE) of 9.51% despite the economic slowdown, demonstrating stable profit-generating capability. However, it fell short of Shinhan Financial, which posted a net profit of 3.4035 trillion KRW, failing to reclaim the 'leading financial group' title this year as well.

KB Financial Group Holdings announced on the 6th that the group's annual net profit for 2019 increased by 8.2% from the previous year to 3.3118 trillion KRW. The fourth-quarter net profit was 534.7 billion KRW, down from the previous quarter due to the bank's voluntary retirement costs (post-tax 125.4 billion KRW) and poor insurance performance, but it showed a clear improvement compared to the same period last year when the S&T division-centered performance was weak.

A KB Financial official explained, "In 2019, concerns about growth slowdown and profitability deterioration due to narrowing interest margins were consistently raised, but we prioritized soundness and profitability-focused management. We maintained very robust profit resilience by focusing on qualitative growth centered on high-quality loans, managing net interest margin (NIM), and improving non-interest income performance."

Non-bank affiliates are evaluated to have further strengthened their core business competitiveness. KB Securities achieved an annual net profit of 257.9 billion KRW last year, a 44.2% increase from the previous year. Since May last year, it has actively expanded its revenue base as a mega investment bank (IB) by launching the issuance business. KB Kookmin Card posted a net profit of 316.5 billion KRW, up 10.4% from a year earlier, thanks to enhanced cost efficiency and market share expansion focused on high-quality customers despite the burden of merchant fee reductions.

The group's core affiliate, KB Kookmin Bank, achieved a net profit of 2.4391 trillion KRW during the same period, an 8% increase. Net interest income was 6.3638 trillion KRW, and net fee income was 1.1333 trillion KRW, up 4.3% and 0.9%, respectively.

On the other hand, KB Insurance posted a net profit of 234.3 billion KRW, down 10.7% during the same period, showing weak performance.

Meanwhile, KB Financial decided on a year-end dividend for 2019 of 2,210 KRW per share, up 15.1% from the previous year. The dividend payout ratio improved by 1.2 percentage points to 26%. KB Financial plans to continue various shareholder return policies, including share buybacks and cancellations.

As for this year's management strategy direction, it presented "solidifying the foundation for sustainable growth through bold customer-centric innovation."

A KB Financial official stated, "This year, we will strengthen the core business competitiveness of each affiliate, seek opportunities to enhance the group's portfolio completeness through mergers and acquisitions (M&A), and focus on continuously expanding global business. To solidify our position as a leading financial group pursuing sustainable growth, we will strengthen ESG (environmental, social, and governance) management initiatives and establish an ESG system that meets global standards to lead social change and future value creation."

This content was produced with the assistance of AI translation services.