KB Financial Group racked up a net profit of 1.5 trillion won in the first quarter of 2023.
The financial group announced on April 27 that its net profit for the first quarter of this year was 1.4976 trillion won, up 2.5 percent from the same period last year.
The increase was the result of improved earnings from non-banking segments, such as securities and insurance affiliates, despite challenging financial market uncertainties such as the bankruptcy of Silicon Valley Bank and the Credit Suisse crisis in the United States.
It was also attributable to an improvement in KB Financial Group’s net interest margin (NIM) thanks to credit growth, rising interest rates over the past year, and group-wide cost efficiency efforts.
Among key management indicators, KB Financial Group’s net interest margin (NIM) in the first quarter came in at 2.04 percent, up 5 bps sequentially. Its cost-income ratio (CIR) reached an all-time low of 35.9 percent.
However, KB Financial Group’s CCR inched up year on year to 0.63 percent in the first quarter as a result of conservative provisioning at the group level to prepare for possible credit risk expansion across the financial system amid growing recessionary concerns.
By segment, KB Financial Group’s net interest income was 2.7856 trillion won, up 5.61 percent from the same period a year ago.
While the net interest income swelled by approximately 134 billion won year on year due to a steady increase in the bank's credit balance and the effect of repricing loan assets in response to rising interest rates, it decreased by 6.9 percent quarter on quarter due to an increase in interest expense and a decrease in the number of days due to fluctuations in market interest rates amid sluggish overall asset growth.
Its net fee income stood at 918.4 billion won, up 21.7 percent quarter on quarter.
This was attributable to an increase in KB Kookmin Bank’s investment banking fees as a result of strong performances in the IB division including big global deals and a rise in securities custody fees due to an increase in stock trading volume.
By major affiliates, KB Kookmin Bank’s net profit for the first quarter reached 915 billion won, down 4.7 percent from a year earlier.
The drop was blamed on additional provisions (321 billion won) for vulnerable sectors such as borrowers who suffered from a severe economic slump caused by the COVID-19 crisis and those in the project financing (PF) business and the construction industry even though the bank enjoyed increases in its NIM and net commission income.
In the same period, KB Securities posted a net profit of 140.6 billion won, up 23.0 percent year on year, and KB Insurance posted a net profit of 253.8 billion won, up 25.7 percent from the first quarter of last year.
KB Kookmin Card posted a net profit of 82 billion won in the first quarter, down 31.0 percent from a year before. KB Life Insurance rack up 93.7 billion won in net profit.
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