KB Financial Group has been the center of attention in the financial industry of late, with the group taking over a non-life insurance firm — LIG Non-Life Insurance — early this year. The takeover means the group has operations in all financial sectors in Korea.
The financial group posted net profit of 944.6 billion won in the first half of this year. That rises to 1.2 trillion won if cash payout (345.4 billion won) to the honorary retirees from the affiliates of the group are included. Net profit is up 25.7 percent from the same period last year, which inside sources of the financial industry said is proof of KB Financial Group’s impressive strength.
They said it will still take some time to clear the heavy cloud that settled over the group for a number of reasons, including a scandal at its Tokyo branch, among others, but Chairman Yoon Jong-kyoo cleaned up the mess very fast. He led the group to boost its performance, and it worked better than a lot of people expected.
The creation of synergy among affiliates, and the launch of KB Non-Life Insurance Co., as well as the chairman’s strong leadership abilities are some of the things that helped Yoon consolidate the financial group’s operation to the point where its net profit the first half to reached such a feat.
With the launch of KB Non-Life Insurance Co. on June 24, the group now has affiliates in all areas in the country’s financial industry. That will help the group produce profits as high as Kookmin Bank, which has been a major is the chairman’s goal. That also gives the group the access to such financial products as marine insurance, insurance against fire damage, automobile insurance and health insurance, in addition to its already existing financial products such as deposits, funds, trusts, bancassurance and traditional financial products so that the group can create synergy among those products.
The group has already introduced financial product centered around KB Non-Life Insurance’s “KB Magic Auto Insurance” enabling the customers to secure funds to buy cars through Kookmin Bank’s “KB Magic Car Installment Savings,” “KB Magic Car KB Kookmin Card” and KB Capital’s auto installment payment financial product.
Kookmin Bank’s “KB Magic Car Installment Fund gives customers a choice in the repayment period — one year, two years or three years — to suit the customers’ financial conditions. KB Magic, KB Kookmin Card gives a 10 percent discount on the insurance premium paid with its card with the maximum amount set at 30,000 won. There are also discounts at gas stations, family restaurants and communication fees. KB Capital gives discounts on the interest rates to customers who use its installment financial products to pay for things like cars, depending on the installment payment period. The discount is between 3.5 percent and 4.2 percent for customers who use a KB Kookmin Card.
KB Financial sources said the group has many other things in the works, including an expansion its bancassurance-related products; an exchange of personnel among affiliates to sell each other’s products; the issuances of KB Kookmin Card to executives; the issuance of corporate credit cards; and attracting deposits of monthly salaries from large business firms. From June, If KB Kookmin Card is used to pay for air tickets, KB Non-Life has been providing travel insurance free of charge.
Various policies and marketing programs of the financial group’s affiliates have boosted improved the status and reputation of Chairman Yoon’s managerial dexterity since his arrival at the company last year. His biggest achievement, according to analysts, is that the group has been able to overcome complicated internal problems and boost its performance results faster than the market expected.
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