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(LEAD) KB Financial net soars 26.2 pct in 2016

All News 16:32 February 09, 2017

(ATTN: ADDS KB official's comments, subsidiaries' earnings in last 4 paras)

SEOUL, Feb. 9 (Yonhap) -- KB Financial Group said Thursday its net profit jumped 26.2 percent last year to exceed 2 trillion won (US$1.7 billion) largely on improved profitability.

The South Korean banking giant posted 2.14 trillion won in full-year net profit, up 26.2 percent from a year earlier. It marks the first time in five years for the group's net profit to top 2 trillion won.

KB cited increased interest income and a decrease in general costs and loan-loss reserves for the rise. Interest profit grew 3.2 percent on-year to 6.42 trillion won in 2016, with commission profit adding 3.3 percent to 1.58 trillion won.

Its net interest margin (NIM), a measurement of profitability, climbed 0.04 percentage point to 1.89 percent from 2015.

Loan-loss reserves declined 47.7 percent to 581.2 billion won.

A man passes by a Seoul building of KB Financial Group and KB Kookmin Bank in this photo provided by Yonhap News TV. (Yonhap)

"Despite difficult business conditions last year, including a benchmark interest rate cut, the net interest income, which is a core profit, increased thanks to robust loan growth and thorough efforts for the growth of the NIM," a KB Financial official said. "The improved profitability came from a reduction in general management costs and loan-loss reserves."

The group's assets totaled 375.7 trillion won, up 14.2 percent from 2015, partly due to the acquisition of Hyundai Securities.

But the net profit of the group's top subsidiary KB Kookmin Bank declined 12.9 percent on-year to 964.3 billion won on increased costs for the "honorary retirement" of some employees.

KB Insurance and KB Kookmin Card posted 302 billion won and 317.1 billion won, respectively, in net profits in 2016, while KB Securities posted a net loss of 93.4 billion won.


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