High reserves, low margins make KB Financial feel the heatKB Financial Group, Korea’s No. 2 banking group, reported weaker-than-expected earnings for the third quarter yesterday due to squeezed profit margins and higher loan-loss reserves.
Net income amounted to 410.1 billion won ($374 million) in the July-September period, down 29.2 percent from a year earlier, the group said in a regulatory filing. Net profit shed 25.1 percent from three months earlier.
The group’s bottom line was lower than the expected consensus of 484.9 billion won as surveyed by Yonhap Infomax, the financial news arm of Yonhap News Agency.
KB Financial Group joined the trend of local banks’ weak earnings as they were squeezed by falling profit margins and higher loan-loss reserves.
The group’s net interest margin, a key gauge of profitability, came in at 2.82 percent in the third quarter, down from 2.93 percent in the previous three months.