KB Financial's Q3 net hits record high on better NIM, fee income

[Photo by KB Financial Group Inc.]

KB Financial Group Inc. Thursday reported nearly 1.3 trillion won ($1.1 billion) in net profit for the July-September period, maintaining its bottom line above 1 trillion won for three consecutive quarters, thanks to improved loan-deposit margin and increased transactions in the stock market.

South Korea’s leading financial holding company said in a regulatory filing that its consolidated net profit for the third quarter came to 1.29 trillion won, up 7.8 percent from the previous quarter and 9.3 percent from the same period a year earlier. This is its best-ever bottom line for a third quarter.

Its operating profit reached 1.79 trillion won, up 6.8 percent from a quarter ago and 26.2 percent from a year ago, while revenue surged 34.6 percent on quarter and 56.4 percent on year to 16.47 trillion won.

On Friday, it was trading 0.35 percent, or 200 won, higher at 57,600 won in the morning session.

The company attributed the outstanding performance to an increase in revenue from loan interest rates after the central bank’s recent benchmark rate hike, as well as improved fee income from stock brokerage and investment banking services. A fall in provision against credit loss also helped improve the results, added the company.

Its net interest margin improved by 0.01 percentage point on quarter to 1.58 percent thanks to the better profitability of KB Kookmin Bank, its flagship banking unit.

KB Financial Group is Korea’s No. 1 financial group by assets with total asset of 1,121.8 trillion won as of end-September.

KB Financial set aside about 380 billion won for provisions last year in a preemptive move against potential risks from the pandemic, limiting its exposure to a sharp deterioration in asset quality during the prolonged Covid-19 crisis, said a company official.

KB Kookmin Bank posted a net profit of 777.7 billion won in the third quarter, gaining 5.9 percent from the previous quarter. The bank’s won-denominated loans grew by 5.5 percent to 312 trillion won in the same period. KB Securities delivered 170.2 billion won in net income, 10 percent higher from the previous quarter.

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