KB Financial Group Inc., South Korea's leading financial holding firm, has reported a third-quarter net profit of 1.4 trillion won ($1 billion), surpassing market expectations with a year-on-year rise of 0.4%. This was primarily driven by an increase in interest income from corporate lending assets, which boosted the net interest income by 6.6% to 3.1 trillion won in Q3, accounting for 77.9% of the gross operating income during the period.
The group's banking arm, KB Kookmin Bank, contributed significantly to the profit surge with a Q3 net profit of 996.9 billion won, marking a 21% year-on-year rise. This comes despite worsening asset quality with delinquency and non-performing loan ratios increasing to 0.25% and 0.26%, respectively.
However, not all units experienced growth in their profits. Non-banking units, including KB Securities Co., KB Insurance Co., KB Kookmin Card Co., and KB Life Insurance Co., saw their profits slide during the same period.
Despite this, the overall performance of KB Financial Group remained strong. The total net profit for the first three quarters reached 4.3 trillion won, up by 7.4% year-on-year. This puts the company on track to be the first such company in South Korea to exceed an annual net profit of over 5 trillion won.
The company also confirmed a third-quarter dividend of 510 won per share and continued its treasury stock buyback, aiming for a 300 billion won share buyback and cancellation. The plan is to cancel the treasury shares once the buyback is completed.
The July-September period saw a 1% rise in operating income amidst a revenue fall. The first nine months of the year recorded a 1% on-year increase in accumulated net income, interest, and commission incomes.
Despite a slight dip in the net interest margin to 2.09% due to funding costs, the enhanced interest income and commission revenue from KB Kookmin Bank played a significant role in the profit surge.
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