KB Financial Group Chairman Yang Jong-hee has spent this year with a focus on win-win, value-up policies to strengthen the non-banking business.
Chairman Yang has been actively engaged in win-win management since his inauguration. He has been credited for raising KB Financial Group’s corporate value by introducing innovative value-up policies based on solid performances.
KB Financial Group’s non-banking segment has been strengthened to the level of other world-class financial groups, as emphasized by Chairman Yang, since the beginning of his tenure.
The proportion of the non-banking division’s income out of KB Financial Group’s total net income reached 44 percent in the first three quarters of this year.
As Chairman Yang enters the second year of his term, he aims to boost non-banking affiliates in earnest. Finding a breakthrough in global business is also a key task for Yang.
According to sources in the Korean financial industry, Yang did not hold any formal events on Nov. 21, the first anniversary of his inauguration as chairman of KB Financial Group.
But he will review the past year and plan for next year’s management strategy.
He recently visited each of his affiliates, including KB Kookmin Bank, KB Securities, KB Insurance and KB Kookmin Card.
He also received reports on business strategies for 2025 from top executives of the affiliates.
In 2024, Chairman Yang made a concerted effort to create a corporate culture based on a healthy work-life balance, including revamping the financial group’s social contribution strategy to focus on caring and support for win-win growth.
As a result, the company jumped 37 notches to 11th place in the World’s Best Workplaces Rankings by the U.S. business magazine Forbes.
Since the second half of the year, Yang has been conducting value-up sales for major shareholders at home and abroad.
He is determined to explain that, as a “leading financial group,” KB Financial Group will implement a value-up paradigm that pursues qualitative growth beyond quantitative growth.
Chairman Yang’s sustainable value-up strategy emphasizes a shareholder return linked to the common equity capital ratio (CET1), which is a shareholder return method of global financial giant JP Morgan.
In fact, starting next year, any surplus capital in excess of 13 percent of CET1 will be returned to shareholders.
Any surplus capital eclipsing 13.5 percent of CET1 for the year will be utilized to fund treasury stock repurchases and the cancellation in the second half of the year, aiming for the highest total shareholder return ratio in the financial industry.
KB Financial Group’s strong business performance has fueled this aggressive valuation policy.
The financial group’s cumulative net income for the first three quarters of 2024 stood at 4,395.3 billion won, the highest ever.
The market expectation for its net profit this year exceeds KRW 5 trillion, expanding anticipation that it will join the five-trillion-won club for the first time in the Korean financial industry.
In particular, the proportion of its non-banking segment’s net profit in its whole cumulative net profit exceeded 40 percent in the second quarter of 2024 and hit 44 percent in the third quarter.
Yang wants KB Financial Group’s non-banking affiliates to take first place starting next year, his second year in office.
Excluding KB Kookmin Bank, the core of the financial group, non-banking affiliates such as KB Securities and KB Kookmin Card have not yet reached the top spot in their business sectors.
“KB Financial Group ranks first but its affiliates do not,” Yang said in an IR roadshow in New York in May.
“I think non-banking affiliates such as KB Securities, KB Insurance, and KB Kookmin Card will be able to boost their profitability if they claim firs place like KB Kookmin Bank.”
The growth of its global division is also a major challenge facing KB Financial Group.
The financial group has an internal target of earning 30 percent of its profits in overseas markets by 2030.
But there is still a long way to go including improving the financial soundness of Bank KB Bukopin in Indonesia.
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