Loan Growth, Net Profit Up 27.6% Year-on-Year
Approval of 150 Billion KRW Treasury Stock Cancellation
Last Year's Dividend Payout Ratio 26%, Dividend per Share 2,940 KRW
[Asia Economy Reporter Sim Nayoung] KB Financial Group recorded its highest-ever profit last year. KB Financial Group disclosed on the 8th that its total net income for the year (based on controlling interest) was 4.0496 trillion KRW. This figure is 27.6% higher than the previous record of 3.4552 trillion KRW set in 2020. The increase was driven by a rise in loans to small business owners and SMEs due to COVID-19, a booming asset market leading to more leveraged investments, and strong performances across various affiliates.
KB Financial Group decided to cancel 150 billion KRW worth of treasury shares to enhance shareholder value. The dividend payout ratio (dividends as a percentage of net income) was also raised to 26% last year. The dividend per share increased by about 66% from the previous year to 2,940 KRW. Considering the interim dividend of 750 KRW per share paid in August last year, the year-end dividend is approximately 2,190 KRW.
Specifically, net interest income for the year rose 15.5% to 11.2296 trillion KRW, and net fee income increased 22.5% to 3.6256 trillion KRW.
The proportion of non-bank sectors in the group’s net income also grew to about 42.6%. A KB Financial Group official stated, "Last year, loan growth and domestic and international mergers and acquisitions such as Prudential Life and Prasac significantly increased interest income, and strengthening competitiveness in asset management and investment banking divisions led to higher net fee income."
By affiliate, net income for KB Kookmin Bank and KB Securities rose 12.7% and 39.6% to 2.5908 trillion KRW and 594.3 billion KRW, respectively. Net income for KB Insurance and KB Card also jumped 84.1% and 29.0% to 301.8 billion KRW and 418.9 billion KRW, respectively. However, KB Life Insurance continued to struggle, with losses increasing from 23.2 billion KRW in 2020 to 46.6 billion KRW last year.
Looking at the fourth-quarter results alone, KB Financial Group’s total net income was 637.2 billion KRW. This is a 10.4% increase from the fourth quarter of 2020 but significantly lower than the third quarter of last year (1.2981 trillion KRW).
A KB Financial Group official explained, "This was due to one-time costs such as voluntary retirement expenses (after tax 190.2 billion KRW), future economic outlook and COVID-19 related loan loss provisions (after tax 191.5 billion KRW), and seasonal factors." Excluding these, recurring net income was about 1.1 trillion KRW.
The net interest margin (NIM) for the fourth quarter last year was 1.85% for KB Financial Group and 1.61% for KB Kookmin Bank. In the third quarter, these were 1.83% and 1.58%, respectively.
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