KB Financial Group Earns 3.4 Trillion Won in First Half Despite Lower Interest Rates... Kookmin Bank Surpasses 2 Trillion Won for First Time
by Kim Hye Min
Published 24 Jul.2025 16:04(KST)
Updated 24 Jul.2025 16:38(KST)
Fee Income Rises Despite Decline in Interest Income
Half-Year Profit Surpasses 3 Trillion Won for First Time in Two Years... Record High
Bank Profits Up 45.3% as ELS Risk Disappears Despite NIM Drop
KB Financial Group achieved its highest-ever performance in the first half of this year, earning 3.4 trillion won. The risk associated with setting aside provisions for losses on Hong Kong H-Index Equity-Linked Securities (ELS) disappeared, and despite a decrease in net interest income, non-interest income expanded due to factors such as a decline in exchange rates, resulting in a significant improvement in growth. Even when looking at the second quarter alone, the group posted a record-high performance. Among its subsidiaries, KB Kookmin Bank, which accounts for the largest portion, surpassed 2 trillion won in net profit for the first half for the first time.
On July 24, KB Financial Group announced through a public disclosure that its consolidated net profit attributable to controlling interests for the first half of this year reached 3.4357 trillion won, up 23.8% from 2.7744 trillion won in the same period last year. This marks the first time in two years since the first half of 2023 (3.0076 trillion won) that half-year net profit exceeded 3 trillion won, setting a new record.
Na Sangrok, Executive Vice President of Finance at KB Financial Group, explained, "Net interest income decreased due to falling market interest rates, but fee income improved. In addition, other operating profit expanded thanks to the effects of a lower exchange rate and rising stock indices. The impact of last year's ELS provision also disappeared, and gains from the sale of investment real estate by consolidated funds were reflected, leading to a recovery in non-operating profit and driving the group's performance."
Net interest income for the first half was 6.3687 trillion won, down 0.4% from the same period last year. In contrast, net fee income increased by 2.9% year-on-year to 1.966 trillion won, despite a decrease in card merchant fee income, due to higher sales fees, increased brokerage fees from the securities business, and gains from asset management and the sale of managed assets. Other operating profit was 757.3 billion won, up 38.8% over the same period. This was mainly due to the improvement in the bank's performance in oil and derivatives products, driven by the lower exchange rate and rising stock prices.
Second-quarter consolidated net profit was 1.7384 trillion won, up 2.4% from the same period last year, also marking the highest quarterly result ever. Net interest income for the quarter was 3.1065 trillion won, down 4.8% from the previous quarter due to one-off costs related to the liquidation of consolidated funds. The group's net interest margin (NIM) for the second quarter was 1.96%, down 0.05 percentage points from the previous quarter. On the other hand, net fee income was 1.032 trillion won, up 10.5% quarter-on-quarter. This is the first time quarterly net fee income has surpassed 1 trillion won.
By subsidiary, KB Kookmin Bank's net profit for the first half was 2.1876 trillion won, up 45.3% year-on-year. This is the first time half-year net profit has exceeded 2 trillion won. Although NIM fell to 1.73% due to lower market interest rates, net interest income reached 5.2043 trillion won, up 1.4% from the same period last year. In addition, the bank was relieved of the ELS loss compensation risk that had been reflected as a provision in the first quarter of last year, and fee income (572.1 billion won), including bancassurance sales fees, also increased, driving the performance. Second-quarter net profit was 1.1612 trillion won, up 4.0% year-on-year. Net interest income was 2.6076 trillion won, and net fee income was 301.9 billion won. While interest income increased by only 0.4% from the previous quarter, fee income rose by 11.7%.
KB Securities' net profit for the first half was 338.9 billion won, down 9.9% from the same period last year. A KB Financial Group official explained, "Although total operating profit increased by 8.0% over the same period due to overall market improvements such as a stock market recovery and falling interest rates, net profit declined due to the preemptive provisioning for real estate project financing (PF) sites." Second-quarter net profit was 159 billion won, down 11.6% from the previous quarter.
KB Insurance's net profit for the first half was 558.1 billion won, down 2.3% year-on-year, while KB Life Insurance's net profit was 189.1 billion won, up 2.3%. KB Kookmin Card's net profit for the first half was 181.3 billion won, down 29.1% from the same period last year. This was due to a reduction in fees following adjustments to merchant fee rates and increased costs related to bond sales. Second-quarter net profit was 96.8 billion won, down 17.0% from the same period last year.
As of the end of June, KB Financial Group's Common Equity Tier 1 (CET1) ratio was 13.74%, and its BIS capital adequacy ratio was 16.36%. The group's cost-to-income ratio (CIR), a measure of cost efficiency, was 36.9% for the first half.
In addition, KB Financial Group decided to pay a cash dividend of 920 won per share and to buy back and cancel treasury shares worth 850 billion won.
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