KB Financial Group's net profit for the second quarter of this year exceeded 1.7 trillion KRW, marking the highest quarterly profit ever recorded.
The increase in interest income was driven by a larger loan portfolio amid high interest rates, and the Hang Seng China Enterprises Index (Hong Kong H Index) maintained a higher-than-expected level, resulting in a partial reversal of provisions previously set aside in the first quarter for losses related to equity-linked securities (ELS).
According to KB Financial Group on the 23rd, the net profit for the second quarter (based on controlling interest) was 1.7324 trillion KRW, a 15.6% increase compared to the previous year. This amount is more than 200 billion KRW higher than the previous quarterly record of 1.5087 trillion KRW set in the first quarter of last year. Compared to the second quarter of last year (1.4989 trillion KRW) and the first quarter of this year (1.0491 trillion KRW), the increases were 15.6% and 65.1%, respectively.
However, the cumulative net profit for the first half of the year (2.7815 trillion KRW) decreased by 7.5% compared to the same period last year (3.0076 trillion KRW). This was due to the accounting recognition of 862 billion KRW as a provision expense for voluntary compensation to customers who suffered losses from H Index ELS in the first quarter. A KB Financial Group finance executive stated, "Excluding one-time gains such as the reversal of ELS loss provisions and loan loss provisions, the group's recurring quarterly net profit is around 1.6 trillion KRW."
The group's and KB Kookmin Bank's net interest margins (NIM) for the second quarter were 2.08% and 1.84%, respectively, each down by 0.03 percentage points from the first quarter (2.11% and 1.87%). Compared to the second quarter of last year, they were lower by 0.02 and 0.01 percentage points, respectively.
The group's net interest income for the second quarter (3.2062 trillion KRW) increased by 6.5% year-on-year. Net fee income for the second quarter was 919.7 billion KRW, a 3.3% decrease compared to the previous year.
KB Financial set aside an additional 552.6 billion KRW in credit loss provisions in the second quarter, bringing the cumulative amount for the first half to 981 billion KRW.
By subsidiary, KB Kookmin Bank's second-quarter net profit (1.1164 trillion KRW) increased by 20.4% compared to the previous year (927 billion KRW), influenced by increased interest income and the reversal of ELS compensation provisions. Net profits for KB Securities (178.1 billion KRW), KB Insurance (279.8 billion KRW), KB Card (116.6 billion KRW), Life Insurance (98.9 billion KRW), and KB Capital (75.6 billion KRW) also rose by 63.4%, 3.1%, 5.1%, 2.8%, and 29.2%, respectively.
On the other hand, KB Real Estate Trust (-58.9 billion KRW) and KB Savings Bank (-8.1 billion KRW) recorded losses in the second quarter.
Meanwhile, prior to the earnings announcement, KB Financial held a board meeting and resolved to set the second-quarter dividend at 791 KRW per share, an increase from 784 KRW in the first quarter. The board also approved a plan to repurchase and cancel treasury shares worth 400 billion KRW.
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