KB Financial Group posted a net profit of 1.283 trillion won in 2013 with total earnings of 225.97 billion won in the 4th quarter, down 25.9 percent from the preceding quarter due mostly to the reduced interest margin for its financial affiliates, including Kookmin Bank, and the reduced market value of BCC, KB Financial sources said.
The income from interest margin came to 6.522 trillion won, down 7.3 percent due to the fall in interest margin, but interest earnings in the fourth quarter last year totaled 1.845 trillion won, up 4.3 percent YoY. The group’s fee income, including from the sale of bancassurance, totaled 1.479 trillion won, down 5.6 percent YoY due to cuts in fees. Other operating losses came to 548 billion won, down from 719.9 billion won the previous year.
The loss of 198.3 billion won was related to a write down of NPL at the end of last year, down 46.6 billion won from the previous quarter due to the sale of securities. General expenses increased 3.6 percent YoY to 3,984 trillion won, with those in the fourth quarter rising 7 percent from the preceding quarter due to the payment of early retirement payouts amounting to 1.251 trillion won.
The loss from the credit loss provision amounted to 1.413 trillion won, down 38 percent or 172.8 billion won from the previous quarter.
Kookmin Bank, the largest affiliate of the group reported 842.2 billion won in net profit in 2013, down 431.5 percent YoY. The bank’s net interest margin in the fourth quarter amounted to 1.79 percent, down 0.06 percent from the preceding quarter. The group’s overall net interest margin came to 2.5 percent in the fourth quarter, up 0.02 percentage points from the previous quarter.
The bank’s BIS ratio of its capital based on the Basel III standard amounted to 15.47 percent (preliminary) for BIS capital ratio and a general stake capital ratio of 12.65 percent (preliminary).
The bank’s operating expenses increased 3.6 percent or 137.9 billion won at 3.983 trillion won with operating expenses in the fourth quarter posting a rise of 7 percent or 67.5 billion won from the preceding quarter at 1.251 trillion won due mainly to the payment of retirement funds to the early retirees. The bank was able to recover 281.8 billion won from the fourth quarter credit loss provision due to the improvement of its financial soundness through various write downs of defaulted loans over the past several years. For the entire year the write downs amounted to 192.9 billion won YoY at 1.413,8 trillion won, up 12 percent.
The bank’s default ratio in 2013 amounted to 0.77 percent, down 0.2 percent YoY and 0.28 percent from the previous quarter. The default ratio for household loans came to 0.67 percent last year, down 0.34 percent YoY and down 0.25 percent from the preceding quarter.
The default ratio for the corporate loans was 0.88 percent in 2013, down 0.04 percent YoY and 0.32 percent from the previous quarter. The default ratio for KB Card was 1.85 percent, up 0.56 percent YoY, but the ratio reflects the default ratio calculation change in March last year, and under the new rule the ratio is down 0.17 percent YoY. The new rule says the default ratio should be based on the defaulted interest payments for six months from three months in the old rule.
KB Financial’s assets totaled 379.8 trillion won, including the assets under its management and its affiliates, as of Dec. 31 last year with Kookmin Bank’s assets accounting for 287.8 trillion won of that total including assets under its trust management. The bank’s outstanding loans including private equity funds under its management totaled 187.5 trillion won, up 1.9 percent YoY. KB Card’s outstanding loans came to 14.6 trillion won, up 11.5 percent or 1.5 trillion won YoY.
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