KB Financial Group reports a record net profit as rates rise

KB Financial Group Chairman Yoon Jong-kyoo gives a speech on Jan. 4. [KB FINANCIAL GROUP]

KB Financial Group reported a record profit on improving net interest margins.

Its net profit in 2021 came in at 4.41 trillion won ($3.7 billion), up 27.6 percent. Fourth quarter net profit was 637 billion won, up 10.38 percent on year but down 51 percent from the previous quarter.

The company owns KB Kookmin Bank, KB Securities, KB Insurance and KB Kookmin Card.

"Costs for early retirement packages, one-time costs like preemptive bad debt allowances due to Covid-19 and the future economic outlook and seasonal costs dramatically reduced net profit compared to the previous quarter," KB Financial Group said in a statement on Tuesday.

KB Kookmin Bank, the commercial banking subsidiary, reported 2.59 trillion won in net profit last year, up 12.7 percent as the net interest margin went up to 1.61 percent in the fourth quarter on the increased benchmark rates.

The new household loan rate averaged 3.66 percent in December, up 0.05 percentage points from the previous month and the seventh consecutive monthly increase. It was the highest rate since August 2018.

Profit from non-banking businesses jumped.

KB Securities reported a record 594.3 billion won in net profit, up 40 percent on year on active stock trading and IPO revenue. KB Insurance's 2021 net profit was 301.8 billion won, up more than 80 percent.

KB Financial Group will retire 150 billion won of treasury stocks and up the dividend by 66 percent to 2,940 won per share.

"The biggest challenges for this year's market are: concerns for weakness of non-interest businesses, potential weakness of asset quality, intensified competition," KB Financial Group said in a statement, also singling out concerns to MyData-related business.

MyData is a government-led project that allows licensed service providers to collect and analyze personal data scattered across the finance sector.

Other financial groups, including Shinhan Financial Group, Woori Financial Group and Hana Financial Group, are scheduled to report their earnings through Thursday.

The forecast net profit of the four financial groups, including KB Financial Group, in 2021 is 14.43 trillion won, up from 10.81 trillion won in 2020.

BY JIN MIN-JI [jin.minji@joongang.co.kr]