KB Financial Group (105560) H2 2023 earnings summary

Executive summary

• FY23 profit attributable to parent shareholders was ₩4,631,932 million, up 11.5% YoY; consolidated profit for the year was ₩4,563,431 million.

• Earnings mix was 66% banking and 34% non-banking; priorities included growing non-bank contributions, diversification and cost control.

• Operating income before credit losses rose to ₩9,581,728 million from ₩7,136,950 million, while credit-loss provisions increased to ₩3,146,409 million.

• The independent auditor issued an unqualified opinion on consolidated financial statements and reported effective internal control over financial reporting for consolidation.

Financial highlights

• Net interest income rose 5.4% to ₩12,141,717 million; net fee and commission income increased 4.5% to ₩3,673,524 million.

• Net insurance income was ₩1,422,952 million; fair-value-through-profit-or-loss gains were ₩2,163,065 million versus a ₩1,139,818 million loss in FY22.

• Net operating income was ₩6,435,319 million versus ₩5,289,175 million; profit before tax was ₩6,170,449 million versus ₩5,449,744 million.

• G&A expenses were ₩6,647.4bn, up 0.1%; other operating profit recovered to ₩413.9bn from a ₩1,249.6bn loss.

• 4Q23 after-tax one-offs included W200bn ERP costs, W38bn FLC provisions, W555bn real-estate finance provisions and W245bn bank social contribution.

Segment performance

• Banking profit was W3,261.5bn, up 8.9%; net interest income was W9,870.1bn and fee income W1,168.3bn.

• Securities profit was ₩389,618 million versus ₩187,784 million; trading income recovered to W363.3bn from a W235.0bn loss.

• Non-life insurance profit rose to ₩752,901 million from ₩557,219 million; direct premiums grew 4.2% to W12,752.4bn and CSM rose 7.2% to W8,518bn.

• Credit card profit was ₩351,133 million, down from ₩378,592 million; operating revenue grew 11.1% to W5,249.9bn.

• Life insurance profit was W256.2bn; premium income was W3,583.0bn versus W4,346.3bn, on a basis combining the former life entities.