KB Financial, H1 Net Profit Up 44% to 2.5 Trillion Won... First Interim Dividend Decision (Comprehensive)

Record Half-Year Performance
Resolution for Interim Dividend of 750 Won per Share

[Asia Economy Reporter Park Sun-mi] KB Financial Group, which recorded net profits in the 3 trillion KRW range for four consecutive years from 2017 to 2020, posted a net profit of 2.4743 trillion KRW in the first half of this year, a 44.6% increase compared to the same period last year. This is the highest performance ever recorded for the first half of the year, and if this pace continues, it is expected to set a new record for the highest annual performance again this year. KB Financial Group also showed its determination to share profits with shareholders by deciding on quarterly dividends for the first time.

On the 22nd, KB Financial Group announced that its net profit for the first half of the year reached 2.4743 trillion KRW, up 44.6% (763 billion KRW) from the same period last year. This was due to steady growth in core profits, strengthened profit stability through inorganic growth via mergers and acquisitions (M&A), and a base effect from additional loan loss provisions recorded in the second quarter of last year.

However, net profit for the second quarter was 1.2043 trillion KRW, down 5.2% (65.7 billion KRW) from the previous quarter. Although net interest income increased due to loan growth, the increase in net fee income slowed somewhat due to a decrease in stock trading volume and bank trust sales, and bond valuation gains shrank due to rising market interest rates.

As of the end of June, KB Financial Group’s total assets stood at 633.7 trillion KRW, an increase of 23.1 trillion KRW compared to the end of last year. Including assets under management (AUM), the group’s total assets reached 1,003.1 trillion KRW. The group’s return on equity (ROE) for the first half was 11.95%, reflecting stable growth in core profits, diversification of the business portfolio through M&A, and proactive risk management efforts.

The group’s asset soundness also improved. As of the end of June, the group’s non-performing loan (NPL) ratio was 0.39%, improving by 0.03 percentage points compared to the end of March. The group’s BIS capital adequacy ratio was 16.03%, and the common equity tier 1 (CET1) ratio was 13.70%, maintaining the highest level of capital adequacy in the domestic financial sector.

KB Kookmin Bank’s First Half Net Profit Up 14.1%

By major affiliates, KB Kookmin Bank’s net profit for the first half was 1.4226 trillion KRW, up 14.1% (175.9 billion KRW) from the same period last year. The second quarter net profit was 734.1 billion KRW, increasing 6.6% (45.6 billion KRW) from the previous quarter despite a decrease in fee income due to a contraction in trust product sales, supported by steady loan growth and the expiration of the impact from the first quarter’s internal welfare fund accrual.

The second quarter net interest margin (NIM) was 1.56%, maintaining the previous quarter’s level. As of the end of June, the bank’s delinquency rate was 0.14%, and the NPL ratio was 0.26%, both down 0.04 and 0.03 percentage points respectively from the end of March, showing stable management.

KB Securities posted its highest ever half-year performance.

Although second quarter net profit decreased by 30.7% from the previous quarter to 153.3 billion KRW, the first half net profit reached 374.4 billion KRW, marking the highest half-year performance ever. This was due to a booming stock market, increased customer custody assets, expansion of investment banking (IB) business, a significant increase in securities brokerage fees, and a strong recovery in the sales and trading (S&T) division, including improved ELS hedge gains.

KB Insurance’s net profit for the first half was 142.9 billion KRW, similar to the same period last year due to expanded insurance profits. KB Kookmin Card recorded a net profit of 252.8 billion KRW in the first half, up 54.3% (89 billion KRW) from the same period last year. The net profit of Prudential Life Insurance, acquired last year, was 192.4 billion KRW for the first half.

Decision on Interim Dividend of 750 KRW... First Since Financial Holding Company Launch

On the same day, KB Financial Group’s board of directors resolved to pay an interim dividend of 750 KRW per share for the first time since the launch of the financial holding company.

A KB Financial Group official said, “Based on the highest level of capital adequacy in the financial sector and solid profit resilience, this is to provide shareholders with a more stable and flexible cash flow,” adding, “We will continue to carefully consider efficient capital utilization and various shareholder return plans to enhance shareholder value and increase corporate value.”

At the earnings presentation, KB Financial Group also detailed its strategy to strengthen collaboration in the insurance sector to increase business value and synergy at the group level.

The group’s chief financial officer explained, “By providing continuous financial services aligned with customers’ lifelong life cycles, we expect the role of insurance affiliates within the group to expand, maintaining and strengthening customer touchpoints.” He added, “Accordingly, we are reinforcing collaboration systems across all areas including products, channels, and organization. Currently, we are piloting a group-level premium outbound channel (STAR WM) model to enhance wealth management (WM) services. Additionally, we plan to outsource insurance company asset management to KB Asset Management, a professional asset manager, to build an integrated asset management system and secure differentiated management capabilities.”

Furthermore, considering the recent expansion of product sales influence through corporate insurance agencies (GA) channels, KB Financial Group plans to activate cross-selling in exclusive channels and strengthen cooperative marketing with GA channels, aiming to expand market share based on balanced growth between exclusive and GA channels.

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