South Korea’s industry-first KB Financial Group Inc. beat expectations with its net profit for the first three months surging 75 percent from the previous quarter thanks to higher interest rates, buoyant stock market and one-off income from property sales.
KB Financial Group in a regulatory filing reported a net profit of 968.2 billion won ($907 million) for the first quarter ended in March, above the market consensus of 915 billion and adding 11.3 percent on year.
Shares of the financial group closed 0.5 percent higher at 60,300 won on Friday.
Its net interest income jumped 15.9 percent on year to 2.1 trillion won on increased interest margin and growth in its loan to small and medium enterprises.
Net commission income also soared 20.8 percent to 628.9 billion won, surpassing the 600-billion-milestone for the first time on a quarterly basis.
The group’s January-March bottom line reflected the 115 billion won profit from selling a building in Myeong-dong, downtown Seoul.
Its assets amounted 452.1 trillion won as of the end of March, up 3.5 percent from the previous quarter. Its asset soundness remained stable with the BIS capital adequacy ratio - the minimum capital adequacy ratio that banks must attain under the Basel III standard - standing at 15.08 percent and the common equity tier 1 capital ratio - a measurement of a bank`s core equity capital compared with its total risk-weighted assets - at 14.52 percent.
By business, its key lending unit KB Kookmin Bank posted a net profit of 690.2 billion won, up 4.0 percent on year and 107.0 percent against the previous quarter when the bank paid out severance pay and incentives for early retirees.
KB Securities Co. and KB Insurance Co. netted profits of 78.8 billion won and 94.8 billion won, respectively. KB Kookmin Card Co. earned a net 71.7 billion won.
Kim Ki-Hwan, KB Financial Group chief financial officer at a conference call said that the group will aim for 5 percent growth in lending this year primarily through credits to the corporate sector and financing for rents to help contain household debt.
By Chung Joo-won and Cho Jeehyun
[ⓒ Pulse by Maeil Business Newspaper & mk.co.kr, All rights reserved]