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MarketScreener Homepage  >  Equities  >  Korea Stock Exchange  >  KB Financial Group Inc.    A105560   KR7105560007

KB FINANCIAL GROUP INC.

(A105560)
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KB Financial : 2020 1st Half Earnings Release

07/21/2020 | 04:15am EST

1H20 Business Results

July, 2020

Contents

  1. 1H20 Financial Highlights
  1. 1H20 Financial Analysis III. 1H20 Asset Quality
    IV. 1H20 Financial Highlights of Major Subsidiaries

V. Appendix

Disclaimer Statement

  1. The consolidated financial information of KB Financial Group Inc. (the "Group") presented herein is based on the Korean International Financial Reporting Standards(K-IFRS). It is currently being reviewed by the Group's independent auditor, and accordingly, is subject to change.
  2. The consolidated financial reports presented herein is based on Korean IFRS9(K-IFRS9). Note that the financial results for years before 2017 contained herein have not been restated retrospectively.
  3. From 2018, for better peer comparison purpose, the Group reclassified certain interest income out of Net Gain/Loss on Financial Assets at FVPL under Other Operating Profit to Interest Income under Net Interest Income. Note that beginning from the financial results for 2017 contained herein have been restated retrospectively.
  4. As KB Insurance and KB Capital became wholly-owned subsidiaries of the Group on July 7, 2017, the financial results of KB Insurance and KB Capital have been fully consolidated in the Group's financial statements since 3Q17.
  5. Total may not sum due to rounding.
Major non-recurringitems

I. 1H20 Financial Highlights _ Overview

Group Profitability Overview

bn won, %

1H20

1H19

YoY

2Q20

1Q20

QoQ

Net Interest Income

4,683.2

4,549.2

2.9

2,334.0

2,349.2

-0.6

Net Fee & Commission Income

1,381.3

1,135.7

21.6

711.2

670.1

6.1

Other Operating Profit

-49.6

79.1

N.A.

227.7

-277.3

N.A.

Gross Operating Income

6,014.9

5,764.0

4.4

3,272.9

2,742.0

19.4

G&A Expenses

3,045.6

3,000.8

1.5

1,586.4

1,459.2

8.7

Provision for Credit Losses

539.7

293.8

83.7

296.0

243.7

21.5

Net Operating Profit

2,429.6

2,469.4

-1.6

1,390.5

1,039.1

33.8

Highlights

Net Profit for 2Q20

981.8 bn

(+34.6% QoQ)

Increased 34.6% QoQ mainly driven by substantial recovery of other operating profit and better net fee & commission and insurance income

Net Profit for 1H20

1,711.3 bn

(-6.8%YoY)

Delivered decent net profit on the back of solid loan growth and enforced non-banking business, despite the economic headwind caused by COVID-19

Net Non-Operating Profit

-34.0

55.3

N.A.

-14.3

-19.7

N.A.

Profit for the Period

1,731.4

1,837.4

-5.8

992.5

738.9

34.3

Profit attributable

1,711.3

1,836.8

-6.8

981.8

729.5

34.6

to controlling interests

Group Net Profit 1) (bn won)

Net Interest Income for 1H20

4,683.2 bn

(+2.9% YoY)

Continued modest growth on the back of bank and card loan growth, overcoming NIM pressure from rate cuts and Loan Conversion Program

Net Fee & Commission for 1H20

1,381.3 bn

(+W245.6 bn YoY)

Increased significantly YoY with better results in non-banking business, such as fee income from securities business

5-Year CAGR 19%

3,311

3,312

3,061

1,837+3.7%1,880

1,813

1,711

2,144

1,698

1,401

Other Operating Profit for 2Q20

227.7 bn

(+W505.0 bn QoQ)

Substantially recovered from temporary losses in 1Q20 as financial market stabilized in 2Q20

Credit Cost for 2Q20

0.29%

(0.14% on recurring basis)

Provided preemptive provisioning based on FLC against uncertainties and potential deterioration of asset quality

2014

2015

2016

2017

2018

2019

1H19

1H20

  • Non-recurringitems for 2Q20 (before tax)

Note 1) Based on profit attributable to controlling interests

2)

· Preemptive provisioning based on FLC: W206bn (Bank: 159, Card: 32, Capital: 9 etc.)

· (Kookmin Bank) Large-scale reversals of provisioning: W76bn

  1. Major non-recurring items (after tax)
    1H19: Large-scale reversals of provisioning(W59bn), ERP costs(W35bn)
    1H20: PEF related losses including TRS valuation losses(W29bn),
    CVA losses(W24bn), Provisioning for receivables from brokerage business(W14bn) and non-recurring items in 2Q20 as stated at the bottom of the right side

· (Kookmin Bank) CVA(Credit Valuation Adjustment) gains: W18bn

· (KB Securities) Provisioning for potential reimbursement related to investors' losses in PEF: W29bn

2

I. 1H20 Financial Highlights _ Key Financial Indicators (1)

Group ROA·ROE (%)

Loans in Won Growth (tn won, %)

11.48

3.0

4.2

10.22

2.4

9.90

10.04

0.5

7.64

10.15

287

280

287

269 +6.8%

261

269

133

8.88

118

121

128

5.53

0.76

5.5

4.2

0.74

0.72

2.5

0.64

0.8

0.56

148

152

154

143

0.41

3.4

3.2

1.0

0.3

3Q19

4Q19

1Q20

2Q20

1H19

1H20

2019

2020.6

'19.9

'19.12

'20.3

'20.6

ROA

ROE

ROE(Excl. Non-recurring items)

Household

Corporate

Total Growth(QoQ)

Household Growth(QoQ)

Corporate Growth(QoQ)

NIM (%)

1.94

1.88

1.97

1.84

1.74

1.79

1.67

1.61

1.70

1.56

1.50

1.53

3Q19

4Q19

1Q20

2Q20

1H19

1H20

Group NIM

Bank NIM

Sustained profitability

Secured stable interest income stream

Focus on margin management

and continue to diversify

& Earnings Power

led by solid loan growth

revenue sources

  • 1H20 ROE recorded 8.88%, and marked 10.04% on a recurring basis
  • Sustained earnings power on the back of improvement of non-banking business and recovery of other operating profit due to financial market stabilization
  • KB continues to make efforts to diversify revenue sources and improve cost efficiency
  • Loans in Won of the Bank increased 6.8% YTD and 2.4% QoQ, amounting to W287tn as of the end of 2Q20
  • Household continued modest growth by 4.2% YTD, driven by quality loans such as Jeonse loans and specially-arranged unsecured loans
  • Corporate achieved balanced growth of 10.0% by sector. Especially SME(Incl. SOHO) marked W8tn of growth with government-led forbearance program
  • Despite better funding conditions, 2Q20 Bank NIM contracted to 1.50%(-6bp QoQ) mainly due to declining market rates followed by key rate cuts
  • 2Q20 Group NIM fell to 1.74%(-10bp QoQ) further reflecting lowered card asset yields caused by decreasing card loans and cash advances
  • Whilst focusing on margin management, KB continue to diversify groupwide non-interest income sources

3

I. 1H20 Financial Highlights _ Key Financial Indicators (2)

Group Cost-Income Ratio(CIR) (%)

Credit Cost Ratio(CCR) (%)

Group BIS Ratio (Basel III, %)

70.2

55.2

54.5

54.9

57.4

50.6

51.8

50.5

50.9

48.5

0.29

0.22

0.20

0.21

0.20

0.27

0.25

0.12

0.12

0.11

0.05

0.04

0.04

0.11

15.27 15.23

14.60 14.48

14.60

14.37

13.97 13.86 14.60

14.25

13.97

13.58

14.08 14.13

13.29 13.21

13.02 12.80

2016

2017

2018

2019

1H20

CIR

CIR(Excl. non-recurring items)

2016

2017

2018

2019

1Q20

2Q20

Group CCR

Bank CCR

Cumulative

2016

2017

2018

2019

'20.3

'20.6(e)

BIS

Tier1

CET1

Visible improvement

in cost efficiency

  • 1H20 CIR and 2Q20 CIR improved to 50.6% and
    48.5% respectively
  • On a recurring basis, 1H20 CIR recorded 48.5%, demonstrating improved cost efficiency
  • Improving cost efficiency on the back of expansion of non-interest income sources and group wide cost reduction efforts

Preemptive provisioning

against economic headwind

  • 1H20 CCR and 2Q20 CCR recorded 0.27% and
    0.29% respectively
  • 2Q20 CCR rose slightly QoQ due to W206bn of preemptive provisioning against possible prolonged economic recession
  • 1H20 CCR and 2Q20 CCR, on a recurring basis, posted a very benign level of 0.18% and 0.14% respectively

Industry-highest capital buffer

  • Group BIS and CET1 ratios are to mark 14.13%, 12.80% respectively as of the end of 2Q20
  • Maintained the industry-highest level of capital adequacy on the back of strategic capital management efforts such as issuance of hybrid bonds and disposition of securities(FVOCI)
  • Bank BIS and CET1 ratios are expected to record 14.39%, 12.79%, respectively as of the end of 2Q20

4

II. 1H20 Financial Analysis _ Net Interest Income

Group Net Interest Income

bn won, %

1H20

1H19

YoY

2Q20

1Q20

QoQ

Interest Income

7,221.7

7,340.4

-1.6

3,601.7

3,620.0

-0.5

Loans

6,078.6

6,167.7

-1.4

3,075.6

3,003.0

2.4

Financial Investments

990.8

1,026.3

-3.5

479.2

511.6

-6.3

Others

152.3

146.4

4.0

46.9

105.4

-55.5

Interest Expense

2,538.5

2,791.2

-9.1

1,267.7

1,270.8

-0.2

Deposits

1,575.1

1,787.1

-11.9

786.2

788.9

-0.3

Debts & Debentures

914.1

939.2

-2.7

460.2

453.9

1.4

Others

49.3

64.9

-24.0

21.3

28.0

-23.9

Net Interest Income

4,683.2

4,549.2

2.9

2,334.0

2,349.2

-0.6

Net Interest Income (bn won)

8,905

9,197

8,247

457

478

534

1,230

6,403

1,168

6,203

616

520

1,084

616

487

465

530

+2.9%

4,683

981

542

4,549

980

73

599

232

24

229

604

624

307

309

244

4,712

4,829

5,565

6,101

6,364

267

3,140

3,276

2015

2016

2017

2018

2019

1H19

1H20

Bank

Securities

Insurance

Card

Others(Incl. adjustment for consolidation)

Note) Based on each subsidiary's Net Interest Income on the financial statements for group reporting

Loan Growth (tn won, %)

287

280

269

257

258

260

261

9.6

6.8

4.5

0.9

1.4

4.2

3.0

2.4

2.1

0.3

0.7

0.5

'18.12

'19.3

'19.6

'19.9

'19.12

'20.3

'20.6

Bank Loans in Won

Growth(QoQ)

Growth(YTD)

NIM (%)

1.98 1.97

1.94

1.94

1.84

1.71

1.88

1.70

1.79

1.67

1.74

1.67

1.56

1.61

1.53

1.50

1Q19

2Q19

3Q19

4Q19

1Q20

2Q20

Group NIM

Bank NIM

Cumulative

5

II. 1H20 Financial Analysis _ Net Non-Interest Income

Group Net Non-Interest Income

Net Fee & Commission Income Contribution

bn won, %

1H20

1H19

YoY

2Q20

1Q20

QoQ

Net Fee & Commission Income

1,381.3

1,135.7

21.6

711.2

670.1

6.1

Credit Card Fees

246.4

187.6

31.3

133.9

112.5

19.0

Trusts

235.9

282.0

-16.3

99.4

136.5

-27.2

Agent Activity Fees

96.9

81.3

19.2

46.9

50.0

-6.2

(Incl. Bancassurance)

Represent Securities

81.8

73.1

11.9

41.4

40.4

2.5

(Incl. ITC Products)

Banking Activity Fees

96.1

107.5

-10.6

46.2

49.9

-7.4

Securities Business

337.9

211.9

59.5

193.1

144.8

33.4

Others

286.3

192.3

48.9

150.3

136.0

10.5

Other Operating Income

-49.6

79.1

N.A.

227.7

-277.3

N.A.

Net Non-Interest Income

1,331.7

1,214.8

9.6

938.9

392.8

139.0

38.9%

50.6%

1H19

49.4%

1H20

61.1%

Bank Non-Bank

Note) Based on simple arithmetic sum of each subsidiary's Net Fee & Commission Income on the financial statements for group reporting

Net Fee & Commission Income (bn won)

2,243

2,355

2,050

229

380

1,535

1,585

240

265

262

1,381

133

+21.6%

172

212

552

626

580

1,136

259

109

92

98

193

169

180

105

1,156

1,088

1,125

1,123

1,133

284

399

578

543

2015

2016

2017

2018

2019

1H19

1H20

Bank Securities Card

Others(Incl. adjustment for consolidation)

Note) Based on each subsidiary's Net Fee & Commission Income on the financial statements for group reporting

Composition of Net Fee & Commission Income(1H20, bn won)

44

124

73

178

245

Bank

Non-Bank

92

110

130

166

100

134

Bancassurance

Mutual Fund Sales, etc.

Brokerage

Credit Card

Trusts

Trusts

Banking Activities

IB

Others

Credit Card Services

Others(Incl. FX.)

Note) Based on simple arithmetic sum of each subsidiary's Net Fee & Commission Income on the financial statements for group reporting

6

II. 1H20 Financial Analysis _ G&A Expenses & Provision for Credit Losses

Group G&A Expenses

bn won, %

1H20

1H19

YoY

2Q20

1Q20

QoQ

Employee Benefits

1,869.7

1,912.6

-2.2

991.2

878.5

12.8

Depreciation & Amortization

416.3

363.1

14.7

204.6

211.7

-3.4

Administrative Expenses

637.8

611.0

4.4

321.1

316.7

1.4

Others

121.8

114.1

6.7

69.5

52.3

32.9

G&A Expenses

3,045.6

3,000.8

1.5

1,586.4

1,459.2

8.7

Group Provision for Credit Losses

bn won, %

1H20

1H19

YoY

2Q20

1Q20

QoQ

Provision for Loan Losses

497.9

286.7

73.7

254.4

243.5

4.5

Provision for Guarantees

-7.9

8.3

N.A.

-7.4

-0.5

N.A.

Provision for Unused Commitments

51.2

-3.4

N.A.

50.7

0.5

N.A.

Provision for Financial Guarantee Liabilities

-1.5

2.2

N.A.

-1.7

0.2

N.A.

Provision for Credit Losses

539.7

293.8

83.7

296.0

243.7

21.5

G&A Expenses & CIR (bn won, %)

Provision for Credit Losses & CCR (bn won, %)

61.3

70.2

55.2

54.5

54.9

52.1

0.44

50.6

57.4

56.0

0.27

51.8

50.9

50.4

48.5

0.22

0.20

0.21

0.20

0.18

50.5

1,037

6,271

5,919

5,229

5,629

4,524

5,787

3,001

3,046

5,284

5,485

674

670

548

4,135

4,188

2,891

2,926

539

540

294

2015

2016

2017

2018

2019

1H19

1H20

2015

2016

2017

2018

2019

1H19

1H20

G&A Expenses

Non-recurring items

CIR

CIR(Excl. non-recurring items)

Provision for Credit Losses

CCR

Note) Non-recurring items include ERP, digitalization costs, etc.

7

II. 1H20 Financial Analysis _ Financial Position Overview

Group Financial Position

Group Assets (tn won)

tn won, %

Assets

Cash & Due from Financial Institutions FVTPL1) Assets

Financial Investments Loans

Property & Equipment

Other Assets

Liabilities

FVTPL1) Liabilities

Deposits

Debts

Debentures

Other Liabilities

Shareholder's Equity

Share Capital

Hybrid Securities

Capital Surplus

Accumulated Other

Comprehensive Income

Retained Earnings

Treasury Shares

Non-Controlling Interests

2020.6

2020.3

QoQ

2019.12

YTD

569.6

544.9

4.5

518.5

9.9

22.5

23.1

-2.6

20.8

8.2

58.7

57.1

2.8

53.5

9.7

74.8

73.5

1.8

71.8

4.2

367.9

351.4

4.7

339.7

8.3

7.9

7.9

0.0

7.9

0.0

37.8

31.9

18.5

24.8

52.4

529.3

506.1

4.6

479.4

10.4

13.4

12.7

5.5

15.4

-13.0

327.7

317.8

3.1

305.6

7.2

46.9

41.8

12.2

37.8

24.1

57.4

54.2

5.9

50.9

12.8

83.9

79.6

5.4

69.7

20.4

40.3

38.8

3.9

39.1

3.1

2.1

2.1

-

2.1

-

0.8

0.4

100.0

0.4

100.0

16.7

17.1

-2.3

17.1

-2.3

0.3

0.1

200.0

0.3

0.0

20.8

19.6

6.1

19.7

5.6

-1.1

-1.1

N.A.

-1.1

N.A.

0.7

0.6

16.7

0.6

16.7

518.5

569.6

26.1

479.6

23.7

23.9

436.8

22.2

23.0

37.7

36.6

19.5

20.5

56.6

375.7

17.7

34.8

47.8

329.1

20.4

32.4

45.1

16.6

15.8

37.4

32.4

16.1

387.4

425.3

6.1

329.8

357.0

307.1

290.3

2015

2016

2017

2018

2019

2020.6

Bank

Securities

Insurance

Card

Others(Incl. adjustment for consolidation)

Note) Based on each subsidiary's total assets on the financial statements for group reporting

Group AUM (tn won)

271.1

304.7

252.7

234.9

28.4

29.0

216.6

30.8

81.6

25.8

22.4

59.2

51.0

50.6

52.7

120.4

137.3

19.1

123.3

131.8

115.2

97.8

47.5

Group Total Assets 2)

873.5

810.4

7.8

789.8

10.6

AUM 3)

304.7

266.6

14.3

271.1

12.4

Note 1) Fair Value Through Profit or Loss

  1. Based on simple arithmetic sum of each subsidiary's total assets on the financial statement for group reporting and AUM
  2. Including the Bank's trust asset not subject to group reporting

19.6

43.7

43.3

47.6

51.7

56.8

34.2

2015

2016

2017

2018

2019

2020.6

Bank Trust

Securities

Asset Management

Real Estate Trust & others

8

II. 1H20 Financial Analysis _ Assets & Liabilities

Bank Loans in Won

tn won, %

2020.6

2020.3

QoQ

2019.12

YTD

Household

154.1

152.6

1.0

147.9

4.2

Mortgage

82.1

82.1

0.0

77.2

6.3

General

72.0

70.5

2.1

70.7

1.8

[Home Equity]

31.0

31.0

0.0

31.8

-2.5

Corporate

133.2

127.8

4.2

121.1

10.0

SME

111.6

106.4

4.9

103.3

8.0

[SOHO]

74.0

70.8

4.5

69.2

6.9

Large Corp, etc.

21.6

21.4

0.9

17.8

21.3

Total

287.2

280.4

2.4

269.0

6.8

Loan Portfolio (tn won, %)

207.3

220.6

234.9

257.4

269.0

287.2

7.5

7.6

6.8

7.0

6.6

8.2

13.1

12.1

12.4

12.6

12.7

12.9

23.3

24.4

25.6

25.5

25.7

25.8

29.9

29.4

28.8

27.7

26.3

25.0

25.8

26.5

26.4

27.2

28.7

28.6

2015

2016

2017

2018

2019

2020.6

Mortgage

General

SOHO

SME(Excl. SOHO)

Corp, etc.

Bank Deposits & Debentures in Won

tn won, %

2020.6

2020.3

QoQ

2019.12

YTD

Deposits

297.9

290.4

2.6

281.6

5.8

Core Deposits

139.8

130.0

7.5

124.5

12.3

Time & Savings

153.6

156.9

-2.1

152.9

0.5

[Time Deposits]

141.0

144.1

-2.2

139.3

1.2

CD, RP, etc.

4.5

3.5

28.6

4.2

7.1

Debentures

15.5

15.0

3.3

13.0

19.2

Total

313.4

305.4

2.6

294.6

6.4

Card Assets

tn won, %

2020.6

2020.3

QoQ

2019.12

YTD

Credit Card

17.7

17.7

0.0

18.6

-4.8

Credit Sales

11.3

11.1

1.8

12.0

-5.8

[Installments]

5.0

4.9

2.0

5.1

-2.0

Card Loans

5.3

5.5

-3.6

5.3

0.0

Cash Advance

1.1

1.2

-8.3

1.2

-8.3

Factoring, etc.

3.7

3.5

5.7

3.3

12.1

Total

21.4

21.2

0.9

21.9

-2.3

9

III. 1H20 Asset Quality _ Group Overview

Group Asset Quality

Precautionary & Below Ratio / NPL Ratio (%)

bn won, %

2020.6

2020.3

QoQ

2019.12

YTD

Total Loans for NPL Classification

355,479.6

348,356.8

2.0

334,552.5

6.3

Precautionary

2,440.4

2,630.1

-7.2

2,608.4

-6.4

Substandard

761.6

704.7

8.1

662.5

15.0

Doubtful

600.7

711.4

-15.6

700.9

-14.3

Estimated Loss

355.5

341.9

4.0

288.4

23.3

Substandard & Below Loans(NPL) (A)

1,717.8

1,758.0

-2.3

1,651.8

4.0

NPL Ratio

0.48%

0.50%

-0.02%p

0.49%

-0.01%p

Loan Loss Reserves (B)

2,480.7

2,485.1

-0.2

2,430.0

2.1

1.42 1.39 1.40 1.38

0.61 0.60 0.59 0.55

1.27

1.26

1.17

0.49

0.50

0.48

NPL Coverage Ratio (B/A)

144.4%

141.4%

3.0%p

147.1%

-2.7%p

Reserves for Credit Lossess (C)

2,612.7

2,675.2

-2.3

2,555.2

2.3

NPL Coverage Ratio[(B+C)/A]

296.5%

293.5%

3.0%p

301.8%

-5.3%p

Note) Based on simple arithmetic sum of each subsidiary's figures

'18.12

'19.3

'19.6

'19.9

'19.12

'20.3

'20.6

Precautionary & Below Ratio

NPL Ratio

Credit Cost Ratio (%)

2.44

2.23 2.06 2.15 2.14

2.03

1.96

NPL Coverage Ratio (%)

278.1

268.6

262.4

246.6

263.4

249.6

249.8

0.30

0.21 0.15

0.13

0.05

-0.03

0.21

0.25

0.06 0.08

0.25 0.29

0.11 0.12

138.9

138.2

135.6

147.1

141.4

144.4

132.8

122.3

120.2

118.1

130.2

126.7

134.5

115.3

'18.12

'19.3

'19.6

'19.9

'19.12

'20.3

'20.6

4Q18

1Q19

2Q19

3Q19

4Q19

1Q20

2Q20

Group

Bank

Card

Group

Bank

Card

10

III. 1H20 Asset Quality _ Bank & Card

Bank Asset Quality

bn won, %

2020.6

2020.3

QoQ

2019.12

YTD

Total Loans for NPL

307,691.5

302,292.4

1.8

288,896.7

6.5

Classification

Precautionary

1,058.9

1,195.8

5.0

1,249.2

-15.2

Substandard

619.1

608.7

1.7

590.4

4.9

Doubtful

269.5

348.0

-22.6

350.2

-23.1

Estimated Loss

132.3

135.8

-2.6

116.6

13.5

NPL Ratio

0.33%

0.36%

-0.03%p

0.37%

-0.04%p

NPL Coverage Ratio

134.5%

126.7%

7.8%p

130.2%

4.3%p

Delinquency Ratio (%)

1.24

1.23

1.20

1.32

1.25

1.16

1.11

1.24

1.08

0.35

0.24

0.23

0.27

0.26

0.29

0.24

0.24

0.21

2016

2017

2018

'19.3

'19.6

'19.9

'19.12

'20.3

'20.6

Bank

Card

Card Asset Quality

bn won, %

2020.6

2020.3

QoQ

2019.12

YTD

Total Loans for NPL

21,446.6

21,235.6

1.0

21,922.4

-2.2

Classification

Precautionary

759.7

838.2

-9.4

875.1

-13.2

Substandard

4.1

3.1

30.8

3.6

14.3

Doubtful

206.0

236.7

-13.0

223.0

-7.6

Estimated Loss

106.7

80.9

31.9

73.0

46.1

NPL Ratio

1.48%

1.51%

-0.03%p

1.37%

0.11%p

1.30

1.40

1.38

0.74

0.58

0.48

2016

2017

2018

NPL Ratio (%)

1.46

1.46

1.49

1.37

0.47 0.45 0.41 0.37

'19.3 '19.6 '19.9 '19.12

Bank Card

1.51 1.48

0.36

0.33

'20.3 '20.6

NPL Coverage Ratio

249.8%

249.6%

0.2%p

263.4%

-13.6%p

Provision for Loan Losses

bn won, %

1H20

1H19

YoY

2Q20

1Q20

QoQ

Bank

172.1

17.6

877.8

93.4

78.7

18.7

Household

157.4

104.7

50.3

90.0

67.4

33.5

Corporate

14.7

-87.1

N.A.

3.4

11.3

-69.9

Card

213.7

206.7

3.4

104.7

109.0

-3.9

Bank Credit Cost Ratio (%)

0.22

0.16

0.14

0.19

0.19

0.18

0.24

0.10

0.13

0.11

0.11

0.12

0.05

0.04

0.05

0.06

0.08

-0.03

0.01

0.01

0.03

0.01

-0.06

-0.06

-0.08

-0.04

-0.20

2016

2017

2018

1Q19

2Q19

3Q19

4Q19

1Q20

2Q20

Bank

Household

Corporate

11

IV. 1H20 Financial Highlights of Major Subsidiaries _ KB Kookmin Bank

Profitability Overview 1)

Net Interest Income & NIM (bn won, %)

bn won, %

1H20

1H19

YoY

2Q20

1Q20

QoQ

Net Interest Income

3,275.7

3,139.7

4.3

1,638.2

1,637.5

0.0

Net Fee & Commission Income

543.0

577.9

-6.0

257.2

285.8

-10.0

Other Operating Profit

8.9

-76.2

N.A.

135.8

-126.9

N.A.

Gross Operating Income

3,827.6

3,641.4

5.1

2,031.2

1,796.4

13.1

G&A Expenses

1,875.3

1,859.8

0.8

988.1

887.2

11.4

Provision for Credit Losses

216.0

24.2

792.6

139.4

76.6

82.0

Net Operating Profit

1,736.3

1,757.4

-1.2

903.7

832.6

8.5

Net Non-Operating Profit

-25.8

8.3

N.A.

9.4

-35.2

N.A.

Profit for the Period 2)

1,246.7

1,305.1

-4.5

660.4

586.3

12.6

Note 1) Based on financial statements for group reporting 2) Profit attributable to controlling interests

Net Profit (bn won)

2,259

2,439

2,175

1,318

1,305+2.9%

1,107

964

1,281

1,247

2015

2016

2017

2018

2019

1H19

1H20

Major non-recurring items

Note) Major non-recurring items (after tax)

1H19: Large-scale reversals of provisioning(W59bn), ERP costs(W35bn)

1H20: Preemptive provisioning based on FLC(W115bn),

Large-scale reversals of provisioning(W55bn), CVA net losses(W12bn)

1.71

1.71

1.67

1.70

1.61

1.58

1.53

6,364

6,101

3,276

5,394

3,140

4,712

4,829

2015

2016

2017

2018

2019

1H19

1H20

Net Interest Income

NIM

Net Fee & Commission Income (bn won)

1,156

1,088

1,225

1,123

1,133

266

242

228

208

578

253

57

543

101

47

66

111

79

176

160

147

129

124

157

225

204

200

32

239

222

64

44

235

195

210

98

73

173

182

108

92

306

287

308

100

241

182

165

110

2015

2016

2017

2018

2019

1H19

1H20

Trusts

Banking Activities

Card Services

Mutual Fund Sales

Bancassurance

FX, etc.

CIR (bn won, %)

CCR (bn won, %)

51.1

49.0

0.12

0.01

216

1,860

1,875

24

1H19

1H20

1H19

1H20

G&A Expenses

CIR

Provision for Credit Losses

CCR

12

Major non-recurringitems 2)

IV. 1H20 Financial Highlights of Major Subsidiaries _ KB Securities

Profitability Overview 1)

bn won, %

1H20

1H19

YoY

2Q20

1Q20

QoQ

Net Fee & Commission Income

399.2

283.5

40.8

224.9

174.3

29.0

Brokerage

244.7

127.4

92.1

146.6

98.1

49.4

Investment Banking

129.9

116.9

11.1

63.3

66.6

-5.0

Financial Products

27.3

35.2

-22.4

13.3

14.0

-5.0

Others

-2.7

4.0

N.A.

1.7

-4.4

N.A.

Interest Income

244.4

266.9

-8.4

120.2

124.2

-3.2

Trading

-33.0

16.5

N.A.

91.6

-124.6

N.A.

G&A Expenses

382.7

363.3

5.3

201.0

181.7

10.6

Provision for Credit Losses

23.8

5.1

366.7

3.0

20.8

-85.6

Net Operating Profit

204.1

198.5

2.8

232.7

-28.6

N.A.

Net Non-Operating Profit

-20.7

34.3

N.A.

-23.6

2.9

N.A.

Profit for the Period 2)

128.8

168.9

-23.7

150.2

-21.4

N.A.

Note 1) Based on financial statements for group reporting 2) Profit attributable to controlling interests

Net Profit (bn won)

272

258

179

169

+13.8%

192

129

2017

2018

2019

1H19

1H20

Note) Major non-recurring items (after tax) 1H20: PEF related losses including TRS valuation losses (W29bn),

Provisioning for receivables from brokerage business(W14bn)

Provisioning for potential reimbursement related to investors' losses in PEF(W21bn)

Net Fee & Commission Income (bn won)

552

625

580

399

56

48

68

284

24

216

215

267

40

130

353

117

288

245

127

245

2017

2018

2019

1H19

1H20

Brokerage

IB

Sales of Financial Products, etc.

Retail AUM (tn won)

83

73

70

61

64

30

28

28

15

20

46

44

45

42

53

2017

2018

2019

'20.3

'20.6

Brokerage

WM

Assets under WM

tn won, %

2020.6

2020.3

2019.12

3.7%

Bonds

16.0

14.4

14.1

19.5%

Trusts

6.8

6.0

6.1

Funds

5.8

6.3

6.7

ELS/DLS

1.1

1.2

1.5

22.9%

53.9%

Total

29.7

27.9

28.4

Bonds

Trusts

Funds

ELS/DLS

13

IV. 1H20 Financial Highlights of Major Subsidiaries _ KB Insurance

Profitability Overview 1)

bn won, %

1H20

1H19

YoY

2Q20

1Q20

QoQ

Direct Premium Written

5,467.0

5,138.4

6.4

2,729.5

2,737.5

-0.3

Net Premium Earned

4,704.2

4,545.0

3.5

2,369.4

2,334.8

1.5

Loss Ratio

85.5%

83.9%

1.6%p

84.4%

86.6%

-2.2%p

Expense Ratio

20.7%

22.6%

-1.9%p

20.7%

20.7%

0.0%p

Underwriting Profit

-290.2

-293.7

N.A.

-120.1

-170.1

N.A.

Investment Income

449.3

475.1

-5.4

193.5

255.8

-24.4

Profit for the Period 2)

144.0

166.2

-13.4

66.8

77.2

-13.5

RBC Ratio

187.2%

193.3%

-6.1%p

187.2%

189.1%

-1.9%p

Note 1) Based on financial statements for group reporting 2) Profit attributable to controlling interests

Net Profit & EV 1) (bn won)

330

7,537

6,607

6,219

4,712

Direct Premium Written

bn won

2Q20

1Q20

2019

Long Term

1,813.9

1,796.1

7,083.3

Protection

1,662.3

1,638.4

6,361.5

Savings

151.6

157.6

721.8

Auto

659.4

606.8

2,206.7

General

256.2

334.6

982.8

Total

2,729.5

2,737.5

10,272.8

Asset Portfolio

bn won

2020.6

2020.3

2019.12

Cash & Due

288.1

288.4

559.2

Securities

22,040.2

21,569.9

20,633.0

Bonds

11,819.8

11,552.9

10,715.7

F/C Securities

3,782.1

4,158.1

4,243.2

Equities, etc.

6,438.3

5,858.9

5,674.1

Loans

6,972.1

6,919.2

6,872.1

Real Estate

928.9

936.5

943.1

Total

30,229.3

29,714.0

29,007.4

9.4%

24.2%

5.5%60.9%

LT(Protection) LT(Savings)

Auto General

3.1%

1.0%

23.0%

39.1%

21.3%

12.5%

Cash & Due

Bonds

F/C Securities

Equities, etc.

Loans

Real Estate

3,152

262

234

166

144

2017

2018

2019

1H19 2)

1H20 2)

Net Profit

EV

88.3

83.4

84.2

82.2

84.0

80.7

71.3

71.0

2017

2018

Loss Ratio (%)

92.0

86.1

85.1

75.7

2019

88.0

97.4

86.6

84.4

84.7

84.2

82.0

74.9

1Q202Q20

Note 1) EVs are based on identical assumptions sets

Total

Long Term

Auto

General

2) EVs are figures as of the end of June in each year

14

IV. 1H20 Financial Highlights of Major Subsidiaries _ KB Kookmin Card

Profitability Overview 1)

bn won, %

1H20

1H19

YoY

2Q20

1Q20

QoQ

Operating Revenue

1,986.7

1,914.7

3.8

997.7

989.0

0.9

Card

1,737.1

1,695.2

2.5

876.5

860.6

1.8

Installment & Lease Financing

49.4

33.3

48.3

25.3

24.1

5.0

Others

200.2

186.2

7.5

95.9

104.3

-8.1

Operating Expense

1,306.7

1,304.4

0.2

656.5

650.2

1.0

Interest Expense

179.5

172.6

4.0

88.6

90.9

-2.5

Commissions & Other Expenses

1,127.2

1,131.7

-0.4

567.9

559.3

1.5

Gross Operating Income

680.0

610.3

11.4

341.2

338.8

0.7

G&A Expenses

228.7

204.4

11.9

117.0

111.7

4.7

Provision for Credit Losses

228.0

209.0

9.1

111.9

116.1

-3.6

Net Operating Profit

223.3

196.9

13.4

112.3

111.0

1.2

Net Non-Operating Profit

-1.8

-0.8

N.A.

-1.0

-0.8

N.A.

Profit for the period 2)

163.8

146.1

12.1

81.7

82.1

-0.5

Note 1) Based on financial statements for group reporting 2) Profit attributable to controlling interests

Net Profit (bn won)

355

317

297

317

287

146

164

2015

2016

2017

2018

2019

1H19

1H20

Card Transaction Volume (tn won)

33.0

35.0

36.0

36.7

34.1

35.7

8.3

8.6

9.0

8.9

8.2

8.4

24.7

26.4

27.0

27.8

25.9

27.3

1Q19

2Q19

3Q19

4Q19

1Q20

2Q20

Card Assets

Credit Card

Check Card

bn won

2020.6

2020.3

2019.12

17.6%

Credit Card

17,669.5

17,744.1

18,591.9

Credit Sales

11,253.9

11,053.4

12,038.2

[Installments] 4,954.5

4,949.8

5,127.4

24.9%

Card Loans

5,345.2

5,529.3

5,345.4

52.5%

Cash Advance

1,070.4

1,161.3

1,208.2

5.0%

Factoring, etc.

3,768.1

3,477.5

3,312.6

Credit Sales

Cash Advance

Total

21,437.6

21,221.6

21,904.5

Card Loans

Factoring, etc.

Funding

bn won

2020.6

2020.3

2019.12

6.6%

7.2%

Borrowings

1,102.4

1,124.1

1,129.2

Debentures

14,353.2

13,283.4

13,353.2

ABS

1,196.0

1,391.1

1,460.3

Total

16,651.6

15,798.6

15,942.6

86.2%

Borrowings

Debentures

ABS

15

V. Appendix_ Overview of Group Subsidiaries 1) (1H20)

bn won

Ownership

Total Assets

Shareholder's Equity

Profit for the Period

ROA 2)

ROE 2)

KB Kookmin Bank

100.0%

425,310.3

29,323.0

1,246.7

0.62%

8.67%

KB Securities

100.0%

56,606.6

4,804.2

128.8

0.49%

5.51%

KB Insurance

100.0%

37,677.1

4,057.0

144.0

0.78%

7.31%

KB Kookmin Card

100.0%

23,858.8

4,098.3

163.8

1.43%

8.11%

KB Asset Management

100.0%

385.9

187.6

21.6

11.97%

23.59%

KB Capital

100.0%

12,140.4

1,274.0

73.5

1.29%

12.18%

KB Life Insurance

100.0%

9,998.8

636.9

11.8

0.24%

3.82%

KB Real Estate Trust

100.0%

393.4

301.1

38.3

20.17%

26.33%

KB Savings Bank

100.0%

1,550.0

218.9

9.9

1.38%

9.27%

KB Investment

100.0%

801.3

216.2

1.5

0.39%

1.41%

KB Data Systems

100.0%

44.5

21.6

0.9

4.17%

8.47%

KB Credit Information

100.0%

28.5

14.8

-0.1

n.a.

n.a.

Note 1) Based on each subsidiary's financial statements for group reporting 2) Annualized

16

V. Appendix _ Condensed Income Statement by Subsidiaries

bn won

Group

1H20

KB Kookmin

KB Securities

KB Insurance

KB Kookmin

KB Asset

KB Capital

KB Life

Others 1)

Bank

Card

Management

Insurance

Net Interest Income

4,683.2

3,275.7

244.4

306.7

624.4

1.1

161.2

72.2

-2.5

Net Fee & Commission Income

1,381.3

543.0

399.2

-84.9

179.5

60.4

238.4

-7.4

53.1

Other Operating Profit

-49.6

8.9

-33.0

373.5

-123.9

-3.8

-182.1

-16.6

-72.6

Gross Operating Income

6,014.9

3,827.6

610.6

595.3

680.0

57.7

217.5

48.2

-22.0

G&A Expenses

3,045.6

1,875.3

382.7

408.3

228.7

27.7

54.2

33.7

35.0

Provision for Credit Losses

539.7

216.0

23.8

-3.4

228.0

0.0

66.9

-1.0

9.4

Net Operating Profit

2,429.6

1,736.3

204.1

190.4

223.3

30.0

96.4

15.5

-66.4

Net Non-Operating Profit

-34.0

-25.8

-20.7

7.7

-1.8

-0.2

2.4

-0.1

4.5

Profit for the Period

1,731.4

1,257.3

128.8

143.8

163.8

21.6

74.7

11.8

-70.4

Profit attributable to

1,711.3

1,246.7

128.8

144.0

163.8

21.6

73.5

11.8

-78.9

controlling interests

bn won

Group

1H19

KB Kookmin

KB Securities

KB Insurance

KB Kookmin

KB Asset

KB Capital

KB Life

Others 1)

Bank

Card

Insurance

Management

Net Interest Income

4,549.2

3,139.7

266.9

308.6

603.8

0.5

153.9

84.5

-8.7

Net Fee & Commission Income

1,135.7

577.9

283.5

-76.7

104.9

56.2

153.8

-8.5

44.6

Other Operating Profit

79.1

-76.2

16.5

404.3

-98.4

6.4

-116.2

-19.9

-37.4

Gross Operating Income

5,764.0

3,641.4

566.9

636.2

610.3

63.1

191.5

56.1

-1.5

G&A Expenses

3,000.8

1,859.8

363.3

420.0

204.4

27.9

49.6

33.4

42.4

Provision for Credit Losses

293.8

24.2

5.1

-3.0

209.0

0.0

59.3

-2.2

1.4

Net Operating Profit

2,469.4

1,757.4

198.5

219.2

196.9

35.2

82.6

24.9

-45.3

Net Non-Operating Profit

55.3

8.3

34.3

9.8

-0.8

-0.2

1.9

-0.1

2.1

Profit for the Period

1,837.4

1,305.1

168.9

166.4

146.1

25.7

63.9

16.5

-55.2

Profit attributable to

1,836.8

1,305.1

168.9

166.2

146.1

25.7

63.1

16.5

-54.8

controlling interests

Note 1) Includes financial results of the holding company, the other subsidiaries and adjustment for consolidation

17

Disclaimer

KB Financial Group Inc. published this content on 21 July 2020 and is solely responsible for the information contained therein. Distributed by Public, unedited and unaltered, on 21 July 2020 08:15:08 UTC


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Sales 2020 12 310 B 11,2 B 11,2 B
Net income 2020 3 445 B 3,12 B 3,12 B
Net Debt 2020 - - -
P/E ratio 2020 5,24x
Yield 2020 4,77%
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Capi. / Sales 2020 1 431x
Capi. / Sales 2021 1 384x
Nbr of Employees 25 428
Free-Float 92,5%
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Technical analysis trends KB FINANCIAL GROUP INC.
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Consensus
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Mean consensus BUY
Number of Analysts 25
Average target price 55 336,00 KRW
Last Close Price 45 200,00 KRW
Spread / Highest target 41,6%
Spread / Average Target 22,4%
Spread / Lowest Target -4,87%
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Jong-Kyoo Yoon Chairman & Chief Executive Officer
Ki-Hwan Kim Chief Financial Officer & Senior Executive VP
Woo-Yeol Lee Chief Information Technology Officer
Woo Yeul Lee Chief Information Technology Officer
B Solomon Stuart Independent Director
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