KB Financial Group Reports Q3 Net Profit of 1.614 Trillion KRW... Largest Since Establishment

KB Financial Group's net profit for the third quarter of this year increased by about 20% compared to the same period last year, marking the highest cumulative profit ever recorded up to the third quarter. Despite a drop in market interest rates in the third quarter due to the base rate cut, loan volumes actually increased, helping interest income hold steady, along with growth in various fee incomes.

On the 24th, KB Financial Group disclosed that its third-quarter net profit attributable to controlling interests was 1.614 trillion KRW, up 17.9% from 1.369 trillion KRW in the third quarter of last year. This is the largest scale ever recorded for the third quarter since its founding.

The cumulative net profit for the first to third quarters this year (4.395 trillion KRW) is also the highest ever. However, compared to the record quarterly profit in the second quarter of this year (1.732 trillion KRW), it decreased by 6.8%.

A KB Financial Group official explained, "Despite an unfavorable operating environment including a large provision for losses related to Hong Kong H Index (Hang Seng China Enterprises Index) equity-linked securities (ELS) in the first quarter and a contraction in net interest margin (NIM) due to falling market interest rates, balanced growth between banking and non-banking sectors drove the group's performance."

The group's and KB Kookmin Bank's third-quarter net interest margins (NIM) were 1.95% and 1.71%, respectively, down 0.13 percentage points from the second quarter (2.08% and 1.84%). Compared to the third quarter of last year (2.09% and 1.84%), they also decreased by 0.14 and 0.13 percentage points, respectively.

However, despite the deterioration in profitability indicators, the group's interest income in the third quarter (3.165 trillion KRW) increased by 1.3% compared to the third quarter of last year (3.125 trillion KRW). This was because the size of loan assets, including household loans, grew despite the NIM decline. As of the end of September this year, KB Kookmin Bank's won-denominated loans amounted to 362 trillion KRW, up 2.9% from the end of June and 5.9% from the end of last year.

Non-interest income (1.341 trillion KRW) surged 60.6% year-on-year. KB Financial explained, "Increases in bancassurance fees from the bank and investment banking (IB) fees from securities, along with significant improvements in bank securities and derivatives-related performance due to falling market interest rates and stable KRW-USD exchange rates, contributed to this growth."

By affiliate, KB Kookmin Bank's third-quarter net profit (1.112 trillion KRW) rose 11.5% from 996.9 billion KRW in the same period last year.

Net profits of KB Securities (170.7 billion KRW), KB Insurance (168 billion KRW), KB Card (114.7 billion KRW), Life Insurance (74.5 billion KRW), KB Asset Management (24.7 billion KRW), KB Capital (58.5 billion KRW), and KB Real Estate Trust (19.7 billion KRW) also increased by 53.1%, 8.3%, 44.3%, 26.1%, 94.5%, 9.3%, and 42.8%, respectively.

However, KB Savings Bank (-2.5 billion KRW) remained in the red.

Additionally, on the same day in the afternoon, KB Financial Group announced its value-up (corporate value enhancement) plan along with the third-quarter results. KB Financial plans to return surplus capital exceeding a 13% common equity tier 1 (CET1) ratio to shareholders starting next year and maintain the industry's highest total shareholder return ratio, including cash dividends and share buybacks and cancellations.

Specifically, capital exceeding a 13% CET1 ratio at the end of this year will be used as the first shareholder return source next year, and capital exceeding 13.5% CET1 during next year will be used for share buybacks and cancellations in the second half. The plan also sets targets such as an average annual earnings per share (EPS) growth rate of 10%, an average annual share buyback and cancellation of over 10 million shares, and managing risk-weighted asset (RWA) growth at 6.1% or less (the past 10-year average).

Before the announcement of the results and value-up plan, the board of directors approved an additional 100 billion KRW share buyback and cancellation plan and a third-quarter dividend of 795 KRW per share, which is higher than the 784 KRW in the second quarter.

KB Financial Group emphasized, "The total 820 billion KRW share buyback and cancellation this year is the largest in the industry and reaffirms the board and management's commitment to prioritizing shareholder and corporate value enhancement."

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