South Korea’s largest financial holding group, KB Financial Group Inc., has achieved a record quarterly profit in the April-June period, driven by increased interest margins and enhanced profitability across its non-banking affiliates, including brokerage and insurance.
KB Financial posted a net profit of 1.73 trillion won ($1.2 billion) for the second quarter, marking a 15.6% increase from the same period last year. This milestone represents a 65.1% surge from the first quarter, which had been impacted by significant provisions related to equity-linked securities tied to the Hang Seng China Enterprises Index.
The group’s interest margin rose by 1.7% to 3.21 trillion won, accounting for 72.1% of the operating profit. This growth was primarily fueled by Kookmin Bank’s loan expansions in both the household and corporate sectors. However, the net interest margin of KB Financial and Kookmin Bank dipped slightly due to lowered market interest rates.
Despite these gains, the group’s net profit for the first half of the year saw a 7.5% decline from the previous year’s record, totaling 2.78 trillion won. Provisions for loan losses decreased by 25.7% year-on-year, while the Bank for International Settlements (BIS) capital adequacy ratio and common equity tier1 (CET1) ratio remained robust at 16.63% and 13.59%, respectively.
Kookmin Bank’s second-quarter net profit soared by 186.6% from the first quarter to reach 1.12 trillion won, bolstered by a 1.1% increase in its interest margin due to higher Korean-currency loans. However, the bank’s net profit for the first half fell by 19% year-on-year.
Non-banking units also showed strong performance, contributing 38.7% to the group’s net profit. KB Securities posted its best half-yearly net profit of 376.1 billion won since its acquisition in 2016. KB Insurance reported a 7.8% increase in net profit to 572 billion won, and KB Kookmin Card saw a 32.6% rise in net profit to 255.7 billion won due to improved cost efficiency.
KB Financial announced a quarterly dividend of 791 won per share and plans for a 400 billion won buyback and retirement of treasury shares, following a similar move in February.
