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KB Financial beats expectations with $1.17B in Q3 net profit

Published: 24 Oct. 2024, 18:47

SHIN HA-NEE
[email protected]

KB Financial Group headquarters building in western Seoul [KB FINANCIAL GROUP]

KB Financial Group logged a 17.9 percent on-year increase in net profit in the third quarter at 1.61 trillion won ($1.17 billion), according to its regulatory filing on Thursday.

The figure beat the analyst expectation of 1.5 trillion won compiled by market tracker FnGuide.

This brings the accumulated net profit for this year to a new record of 4.4 trillion won, up 0.4 percent from the same period last year.

On a quarterly basis, however, net profit shrank 6.8 percent, weighed down by falling market interest rates and a shrinking net income margin.

Operating profit rose 21.1 percent on year to 2.36 trillion won, also above the market expectation of 2.07 trillion won.

Despite a lower net interest margin of 1.95 percent, down 0.14 percentage points from last year, the group’s net interest income rose 1.3 percent to 3.17 trillion won, driven primarily by the growth in loans.

Noninterest income rose 60.6 percent to 1.34 trillion won.

The group’s flagship KB Kookmin Bank saw an 11.5 percent increase in net profit to 1.11 trillion won in the July-September period.

The accumulated net profit, however, declined 8.3 percent to 2.62 trillion won, mainly due to the bank's voluntary compensation for traders of Hong Kong-tied equity-linked securities earlier this year.

Along with its quarterly results, KB Financial Group announced its plan to enhance shareholder returns as part of the government-led Corporate Value-up Program.

The firm plans to allot capital surplus that exceeds the 13 percent threshold in the Common Equity Tier 1 (CET1) ratio — an indicator of a bank’s equity capital against its risk-weighted assets — for shareholder returns starting next year. This means that if its CET1 ratio comes at 13.5 percent, the excess 0.5 percent will be returned to shareholders.

The firm will also repurchase and retire at least 10 million shares of its treasury stocks every year.

Meanwhile, KB’s board of directors declared a dividend of 795 won per share for the second quarter, up from the previous quarter’s 784 won.

BY SHIN HA-NEE [[email protected]]