Chairman Yoon Jong-kyu of KB Financial Group. (Photo: KB Financial Group)

KB Financial Group announced its business results of the first half of 2021 through live Internet and mobile broadcasting on July 22, 2021.

KB Financial Group’s net profit in the second quarter stood at 1,204.3 billion won, up over the first quarter thanks to the strong growth of its credit business.

On the other hand, the growth of its net commission profits shrank due to a decline in stock transaction payments and trust sales by its banking affiliate.

In the first half of 2021, its net profit rose 44.6 percent (up 7,063 billion won) on-year to 2,474.3 billion won due to the stability of profitability strengthened by inorganic growth through M&As and the base effects of transferring additional loan-loss provisions in the second quarter of last year.

Meanwhile, the board of directors of KB Financial Group decided to pay an interim dividend of 750 won per share as of the end of June 2021 for the first time since the launch of a financial holding company.

“This payment of the dividend is to provide more stable and flexible cash flows to shareholders based on our financial sector’s highest level of capital adequacy and robust profitability,” a KB Financial Group official said. “We will continue to do our best to increase our shareholder value and corporate value.”

In addition, KB Financial Group spelled out details of its strategies to strengthen cooperation in the insurance sector to boost business value and synergies at the group level.

“We are looking forward to seeing our insurance affiliate to play a bigger role as it can maintain and strengthen their contact with customers by providing continuous financial services in line with the customers’ life cycles,” said an executive in charge of financial matters at the group.

“Accordingly, we are strengthening cooperation systems in all areas including products, channels and organization.”

“We are tentatively running the STAR WM model, a group-level premium outbound channel,” the official continued.

“We expand our influence over the market for the affluent by upgrading WM services through the model. At the same time, as for the insurance affiliate’s assets under management, we will secure differentiated asset management capabilities by expanding outsourcing to KB Asset Management so building an integrated asset management system”.

“Considering the recent expansion of the general agency (GA) channel’ influence over product sales, we plan to expand our market share based on the balance growth of the exclusive channel and the GA channel by promoting the GA channel’s cross-selling and strengthening the GA channel’s collaborative marketing,” the official added.

“Furthermore, we will secure sustainable growth engines by applying shared service centers (SSCs) across the insurance sector in an effort to boost cost efficiency.”

The financial group’s net interest income totaled 5,401.1 billion won in the first half, up by 717.9 billion won from a year earlier.

It increased 15.3 percent on year on the back of the bank’s steady and healthy loan growth and the expansion of interest profit contribution by non-banking affiliates such as the credit card affiliate along with diversification of business portfolios through M&As.

The group and the banking affiliate’s NIMs hit 1.82 percent and 1.56 percent respectively in the first half, up 4b and 3bp from the same period of last year, respectively.

In general, the NIMs grew steadily thanks to efforts to ease financing burdens by ramping up low-cost deposits and profitability-oriented lending strategy.

But the NIMs in the second quarter stayed at a level similar to that of the previous quarter, due to loan asset re-pricing from a drop in the interest rate in 2020.

The financial group’s net commission income in the first half increased 32.7 percent on year due to increased trusts from customers and IB business activation efforts, a spike in the banking affiliate’s trust profit thanks to an improvement in ELS sales and an increase in credit card merchant fees amid a recovery of consumption.

In spite of the securities and IB businesses’ steady growth, the financial group’s net commission profit amounted to 865.4 billion won in the second quarter, 10.5 percent down from the previous quarter, due to a decrease in stock business commissions and a decrease in trust income due to a drop in trust product sales.