KB Financial Group (A105560) H1 2024 earnings summary

Executive summary

• First half 2024 net profit was KRW 2,781.5 billion (₩2,781.3 billion), down 7.5% year-over-year due to sizable ELS compensation costs in Q1, but non-bank subsidiaries showed modest earnings growth.

• Q2 net profit reached KRW 1,732.4 billion, with normalized net profit around KRW 1.6 trillion after adjusting for one-offs.

• Group maintained strong capital strength, with CET1 ratio at 13.59% as of June 2024 and continued industry-leading shareholder returns via cash dividends and share buybacks.

• Total assets at June 2024 reached ₩742.2 trillion, up 3.7% from year-end 2023, despite intensified loan competition.

• Group continues to focus on stable earnings fundamentals, conservative provisioning, and diversified portfolio for sustainable growth.

Financial highlights

• Group net interest income for H1 2024 was KRW 6,357.7 billion (₩6,357.7 billion), up 9% year-over-year; net fee and commission income was KRW 1,909.8 billion (₩1,909.7 billion), up 2.4% year-over-year.

• H1 2024 operating profit was ₩4,657.7 billion, up 11.1% year-over-year.

• Q2 other operating profit was KRW 323.1 billion, up 19.5% quarter-over-quarter; H1 cumulative other operating profit was KRW 593.5 billion, lower year-over-year.

• H1 insurance income increased by KRW 185.7 billion year-over-year due to reserve reversals and improved loss ratios.

• H1 G&A expenses were KRW 3,222.1 billion, up 2% year-over-year; Q2 G&A decreased 2.1% quarter-over-quarter.

Outlook and guidance

• Bank expects NIM to remain flat for 2024, with defensive strategies focused on expanding core and retail deposits.

• Group targets a minimum CET1 ratio of 13% and continues to prioritize capital strength and shareholder returns.

• Asset growth will be managed in line with nominal economic growth, maintaining a conservative approach amid macro uncertainties.

• Quarterly dividend policy introduced in 2024, with a focus on stable and gradually increasing payouts.

• Management expects continued asset growth and stable profitability, with ongoing risk management in real estate PF and global operations.