KB Financial Group Reports 3.4552 Trillion KRW Net Profit Last Year, Up 4.3% (Update)

Kookmin Bank Decreases by 5.8% to 2.2982 Trillion KRW
KB Securities Increases by 65.0% to 425.6 Billion KRW

[Asia Economy Reporter Park Sun-mi] KB Financial Group recorded a net profit of 3.4552 trillion KRW last year, an increase of 4.3%.

On the 4th, KB Financial Group announced its 2020 business performance, stating that the annual net profit reached 3.4552 trillion KRW, demonstrating a 4.3% increase compared to the previous year, thanks to steady core profit growth amid challenging domestic and international business environments and the fruits of inorganic growth through mergers and acquisitions (M&A).

However, the group's net profit for the fourth quarter was 577.3 billion KRW, significantly down from 1.1666 trillion KRW in the previous quarter. This was due to the base effect of recognizing voluntary retirement costs (approximately 249 billion KRW after tax), additional COVID-19 related provisions (approximately 124 billion KRW after tax), and the gain on bargain purchase of Prudential Life Insurance (about 145 billion KRW).

By subsidiary, KB Kookmin Bank recorded a net profit of 2.2982 trillion KRW, down 5.8% from the previous year. Despite steady loan growth and efforts to reduce funding costs leading to continuous expansion of interest income, as well as solid increases in securities, derivatives, and foreign exchange-related profits, costs rose due to expanded voluntary retirements and proactive COVID-19 related provisions. In particular, the fourth quarter net profit was 415.8 billion KRW, down from the previous quarter due to voluntary retirement costs (approximately 219 billion KRW after tax), increased seasonal expenses such as advertising, and additional COVID-19 related provisions (approximately 95 billion KRW after tax).

KB Securities' net profit was 425.6 billion KRW, a 65.0% increase year-on-year, driven by a significant rise in custody fees resulting from increased stock trading volume and efforts to grow customer assets under custody. The ROE, which had been around 5%, improved significantly to 8.8%. The fourth quarter net profit was 87.1 billion KRW, slightly down from the previous quarter due to the disappearance of one-time gains such as overseas investment property sales, the recognition of trade finance fund provision liabilities (approximately 23 billion KRW after tax), and voluntary retirement costs (approximately 14 billion KRW after tax).

KB Insurance recorded a net profit of 163.9 billion KRW, down 70.4 billion KRW from the previous year, affected by a contraction in investment operating profit due to the deteriorated investment environment related to COVID-19. The loss ratio for 2020 was 85.5%, a 0.6 percentage point decrease compared to the end of the previous year. KB Kookmin Card's net profit was 324.7 billion KRW, up 2.6% year-on-year due to market share expansion centered on high-quality customers and efforts to reduce marketing costs.

A KB Financial Group official explained, “Based on steady loan growth at the bank, interest income has steadily expanded, and net fee income from non-bank sectors has increased significantly, maintaining a balanced performance improvement between banking and non-banking sectors. The group sustained strong profit resilience through the fruits of inorganic growth via M&A.”

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