KB Financial, 3.3 Trillion Won Net Profit for 3 Consecutive Years in the '3 Trillion Club'... Intense Leading Financial Competition (Comprehensive)

2019 KB Financial Group Annual Net Income of KRW 3.3118 Trillion
Recurring ROE 9.51%... Excluding One-Time Factors Such as Voluntary Retirement Costs
Total Assets KRW 518.6 Trillion, Total Assets Including Assets Under Management (AUM) KRW 789.6 Trillion

[Asia Economy Reporter Kangwook Cho] KB Financial Group posted a net income 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, the group recorded a stable recurring return on equity (ROE) of 9.51% despite the economic slowdown, demonstrating stable profit-generating capability. It closely trailed Shinhan Financial, which posted a net income of 3.4035 trillion KRW, reigniting the competition for the title of 'leading financial group.'

KB Financial Group announced on the 6th that its annual net income for 2019 increased by 8.2% year-on-year to 3.3118 trillion KRW. The fourth quarter net income was 534.7 billion KRW, down from the previous quarter due to the bank’s voluntary retirement costs (after 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 mainly posted weak results.

Last year, net interest income rose by 3.3% (291.9 billion KRW) year-on-year to 9.1968 trillion KRW. The bank’s average loan balance increased, and credit card interest income contribution grew. The net interest margin (NIM) was slightly down year-on-year at 1.94% for the group and 1.67% for the bank. Net fee income increased by 5.0% year-on-year to 2.355 trillion KRW. Other operating losses recorded a loss of 119.9 billion KRW but improved by 168.7 billion KRW compared to the previous year. General administrative expenses last year were 6.271 trillion KRW, and the recurring cost-to-income ratio (CIR) continued to improve. The credit loss provision last year was 670.3 billion KRW, recording a loan loss cost ratio of 0.20%. As of the end of last year, KB Financial Group’s total assets stood at 518.6 trillion KRW, and total group assets including assets under management (AUM) reached 789.6 trillion KRW.

A KB Financial Group official explained, "Last year, concerns about growth slowdown and profitability deterioration due to narrowing loan-deposit 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."

In particular, the core competitiveness of non-bank affiliates was evaluated to have been further strengthened.

KB Securities achieved an annual net income of 257.9 billion KRW last year, up 44.2% 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. The fourth quarter net income was 33.2 billion KRW, down 22.6 billion KRW from the previous quarter. KB Financial analyzed that this was due to recognizing some provisions related to an Australian real estate fund.

KB Kookmin Card posted a net income of 316.5 billion KRW, up 10.4% from a year earlier, despite the burden of reduced merchant fees, thanks to strengthened cost efficiency and market share expansion focused on high-quality customers.

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

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

Meanwhile, KB Financial decided on a 2019 year-end dividend 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 Group official said, "This year, we will strengthen the core business competitiveness of each affiliate, seek opportunities to enhance the group 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 (environment, social, 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.