KB Financial Group posted net profit for the first half approaching 3.9 trillion won, marking its largest half-year performance on record. Despite increased market volatility in rates and exchange rates, both the banking and nonbanking institutional sectors maintained solid profit growth in tandem.
KB Financial Group(105560) said on the 23rd that its second-quarter net profit (attributable to controlling interests) was provisionally tallied at 1.9922 trillion won, up 14.6% from a year earlier. Cumulatively for the first half, net profit came to 3.8846 trillion won. That is a 13.1% increase from the same period last year.
In particular, the contribution of nonbank affiliates to the group's results in the first half rose to 44%. KB Financial Group said the contribution from securities expanded to around 21%, leading nonbank earnings growth.
As of the end of last month, return on equity (ROE) was 14.09%, an improvement of 1.06 percentage points from the same period a year earlier (13.03%). Over the same period, return on assets (ROA) rose by 0.05 percentage points from 0.90% to 0.95%. The cost-to-income ratio (CIR), a cost efficiency indicator, was 36.2%, maintaining a stable trend below 40%.
The credit cost ratio (CCR), which shows the group's asset soundness, was 0.39%, an improvement of 0.15 percentage points from the first half of last year. KB Financial Group said this was the result of loss-absorbing capacity secured preemptively last year in preparation for macroeconomic volatility and the group's conservative risk management stance.
The common equity tier 1 (CET1) ratio rose to 13.74% from 13.64% in the previous quarter. The Bank for International Settlements (BIS) capital adequacy ratio fell by 0.49 percentage points from 16.40% to 15.91%.
KB Financial Group's net interest income for the first half was 6.4783 trillion won, up 1.7% from a year earlier. While interest income fell 1.5%, interest expense decreased 4.0% through profitability efforts such as lowering funding costs. During the period, the net interest margin (NIM) was 1.94%, down 0.05 percentage points from the previous quarter.
Over the same period, noninterest income rose 33.3% year over year to 3.6292 trillion won. In particular, net fee income jumped 50.6%, driving gains. On the back of a bullish stock market, securities business fee income exceeded 1 trillion won, about three times the first half of last year, and trust income more than doubled to 558.4 billion won.
As of the end of June, KB Financial Group's total assets were 866.9 trillion won, and group total assets including assets under management (AUM) were 1,719 trillion won. At the same time, the nonperforming loan (NPL) ratio was 0.67%, and the NPL coverage ratio was 135.4%.
By affiliate, KB Kookmin Bank's first-half net profit rose 1.7% year over year to 2.2254 trillion won. KB證券 posted net profit of 796.3 billion won, up 135.0% from a year earlier, and KB Kookmin Card's net profit was 218.9 billion won, up 20.7% from last year. In contrast, KB Insurance and KB Life reported net profits of 478.8 billion won and 150.6 billion won, respectively, with results declining from the same period a year earlier.
On the day, KB Financial Group announced a quarterly cash dividend of 1,155 won per share and a second-half share buyback and cancellation plan worth 700 billion won. The share buyback and cancellation follows KB Financial Group's framework of using capital above a CET1 ratio of 13.5% at the end of the first half as the second phase of shareholder return resources. As a result, the shareholder return this year is expected to increase to around 3.7 trillion won.