The Q3 net profit beats the estimates by about 2 percent due to excellent operation and asset management to bring total net profit for the three quarters of this year to 2.868,8 trillion won
Chairman Yoon Jong-kyoo of KB Financial Group. (Photo: KBFG)
KB Financial Group posted 940.3 billion won in 3rd quarter profit, beating estimates by about 2 percent as a result of management¡¯s policy to focus on profitable operations and asset management, the financial group said on Oct. 24.
The financial group boosted its loans to SMEs, despite the low interest rates and cuts in one-time profits during the quarter to be able to manage the Q3 net profit to surpass the 900 billion won level as it did in the preceding quarter.
The Q3 net profit beat estimates of 922 billion won, but is down 5.1 percent from the preceding quarter¡¯s 991.1 billion won. The Q2 net profit had a large one-time profit.
The loan-loss provision set up for Hanjin Heavy Industries amounted to 59 billion won to bring the net profit for the first nine months of the year to 2.868,8 trillion won, down 3.2 percent year-on-year.
The group¡¯s major affiliate, KB Kookmin Bank, saw its net profit for the first three quarters of the year fall 3.5 percent at 2.67 trillion won, as last year¡¯s net profit for the first three quarters included a one-time profit of 83 billion won from the sale of the bank¡¯s old building in Myeongdong, downtown Seoul.
Last year, the group¡¯s strategy centered on growth, although the strategy for this year has been turned around to focus on sound management in a period of low-interest rates, an official of the group said.
Korea¡¯s major financial groups posted record-breaking earnings during the first half of the year, notwithstanding external challenges that have weighed down the overall market, industry data showed on July 28.
Shinhan Financial Group and KB Financial Group, the nation¡¯s top two banking groups in terms of assets, logged 1.91 trillion won ($1.6 billion) and 1.84 trillion won in net profit, respectively, according to their recent earnings announcements.
Runners-up Hana Financial Group and Woori Financial Group also exceeded the 1 trillion won mark, with 1.25 trillion won and 1.18 trillion net profit in the first half of the year, respectively.
Of the four, Shinhan Financial marked the largest on-year increase of 6.6 percent.
Woori Financial also said that it renewed its own earnings records. Woori Bank and its financial affiliates were realigned into a holding company system in January this year for the first time since the former entity was disbanded in 2014.
KB Financial and Hana Financial saw their half-year profit shrink 4.1 percent and 7.5 percent, respectively, from the same period last year, but both cited temporary factors for the fluctuation.
¡°Last year¡¯s figures included profits from the sale of the Myeong-dong headquarters building, which came to around 83 billion won after taxes¡± said an official of KB Financial. ¡°Excluding that one-shot variable, (this year¡¯s first-half profit) is more or less similar to last year.¡±
Hana Financial also explained that it had to disburse 126 billion won to cover special retirement costs in the first quarter this year, due to the wage peak system.
In the second quarter, both KB Financial and Hana Financial achieved double-digit on-year growth in profits - 17.2 percent and 20.6 percent, respectively.
The latest earnings results came amid worsening economic conditions, including the prolonged US-China trade tension and Japan¡¯s export restrictions.
The key reason for such a performance was the net interest margin, which continued to account for a sizeable share in overall profits, data showed.