Korea’s KB Financial Group Inc. reported its best-ever quarterly net income for the April-June period, largely helped by recovery of bad debts.
The holding company in a regulatory filing on Thursday said its net profit in the second quarter jumped 17.2 percent on quarter and 4.72 percent on year to 991.1 billion won ($843.8 million). Operating profit gained 13.2 percent to 1.31 trillion won, but was down 1.05 percent against a year earlier. Revenue increased 2.2 percent on quarter and 11.1 percent on year to 12.6 trillion won.
For the January-June period, the company recorded 1.8 trillion won in net profit, down 4.1 percent from a year ago when it reflected 83 billion won after-tax profit from sale of a bank headquarters in downtown Seoul.
Shares of KB Financial Group gained 1.11 percent to close Friday at 45,500 won in Seoul trading.
Stable growth of the group’s core businesses and drop in reserves against bad debt largely helped the company to deliver the best-ever quarterly income, said a KB Financial Group official.
The second-quarter net income was 932.0 billion won, up 5.9 percent against the previous quarter, when excluding one-off factors such as doubtful debt recovery from Hanjin Heavy Industries & Construction and compensation expense for voluntary employee retirement program, according to the official.
Bank unit’s interest income also grew steadily and non-banking units like securities and insurance improved profitability.
Net interest income for the first half was 4.5 trillion won, up 4.8 percent from the same period a year earlier. Loan sales were slower but the average outstanding balance of loans grew.
The group’s net interest margin for the second quarter fell 2 basis points to 1.95 percent from the previous three-month period. Its flagship KB Kookmin Bank recorded net interest margin of 1.70 percent, down 1 basis point on quarter, due to falling market interest rates.
The net commission income in the first half was 585.1 billion won, up 6.3 percent on quarter, thanks to strong sales of trust funds. Other operating income for the same period reached 79.1 billion won after the group added 67.8 billion won from a year earlier on increased trade turnover on bonds and other securities amid fall in interest rates.
Assets totaled 489.2 trillion won as of the end of June, up 3.9 percent from the end of last year. BIS capital adequacy ratio - the minimum capital adequacy ratio that banks must attain under the Basel III standard – was 14.94 percent.
By Kim Tae-sung and Cho Jeehyun
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