KB Kookmin Bank Reports Q2 Net Profit of 660.4 Billion KRW, Down 8.4% Year-on-Year

[Asia Economy Reporter Kangwook Cho] KB Kookmin Bank's net profit for the second quarter was 660.4 billion KRW, showing an 8.4% decrease compared to the previous year.

According to the "2020 First Half Management Performance" announced by KB Financial Group on the 21st, KB Kookmin Bank's net profit for the second quarter decreased compared to the same period last year but increased by 12.6% (74.1 billion KRW) compared to the previous quarter. This was due to a significant recovery in other operating income and losses in the second quarter, which had temporarily recorded large losses in the previous quarter despite proactive provisioning for loan losses.

Accordingly, the net profit for the first half was 1.2467 trillion KRW, a 4.5% (58.4 billion KRW) decrease compared to the same period last year. This was due to the additional loan loss provisions (approximately 115 billion KRW after tax) set aside reflecting a conservative future economic outlook scenario, despite steady growth in interest income. Excluding these major one-time factors, the level was similar to that of the previous year.

The net interest margin (NIM) for the second quarter was 1.50%, down 6 basis points from the previous quarter. Although funding costs decreased due to an increase in low-cost deposits and a reduction in time deposits, the impact of the base interest rate cut was fully reflected, and the burden of managing foreign currency liquidity increased somewhat, resulting in a slight reduction in asset yields.

As of the end of June, won-denominated loans amounted to 287.2 trillion KRW, growing 6.8% compared to the end of the previous year and 2.4% compared to the end of March. Among these, household loans increased by 4.2% compared to the end of the previous year and 1.0% compared to the end of March, mainly driven by jeonse and monthly rent loans and high-quality credit loans. Corporate loans showed balanced growth across SOHO, small and medium enterprises, and large corporations, increasing by 10.0% compared to the end of the previous year and 4.2% compared to the end of March.

The credit cost ratio for the second quarter was 0.12%. Despite additional loan loss provisions, the level was maintained at the previous quarter's level due to the reversal of large loan loss provisions (approximately 76 billion KRW), and it was evaluated as being managed at a still low level.

As of the end of June, the delinquency rate was 0.21%, and the non-performing loan (NPL) ratio was 0.33%, both down 0.03 percentage points compared to the end of March. The NPL coverage ratio was 134.5%, and the NPL coverage ratio including loan loss reserves was 343.3%, maintaining a high level and being managed stably, the bank explained.

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