[Edaily Reporter PARK JONG-HWA ] KB Financial Group’s cumulative net income for the first three quarters of this year rose by more than 10% compared to last year. Growth was driven by an increase in the bank’s loan assets, as well as fees from financial investment products and securities brokerage. However, it remains unclear whether this growth trend can be sustained amid ongoing financial market volatility caused by rising interest rates and other factors.

KB Financial Group announced on the 29th that its cumulative net income (net income attributable to owners of the parent) for the first three quarters of this year was provisionally calculated at 5.7921 trillion won. This represents a 13.1% increase compared to the same period last year (5.1217 trillion won) and marks the highest cumulative quarterly performance in the company’s history. If this trend continues, annual net income is expected to exceed 6 trillion won for the first time among financial holding companies.

Looking at the details, both interest income and fee income increased across the board. KB Financial Group’s cumulative net interest income for the first three quarters was 9.9853 trillion won, a 2.9% increase from last year (9.7049 trillion won). This was driven by growth in loan assets, particularly corporate loans at KB Kookmin Bank. As of the end of September, KB Kookmin Bank’s won-denominated loans stood at 391 trillion won, up 1.5% from the end of the previous quarter; corporate loans, in particular, rose by 2.0%, driven mainly by lending to large corporations and creditworthy small and medium-sized enterprises. Cumulative net interest income for the third quarter rose 38.5% from 2.9524 trillion won to 4.0878 trillion won, playing a key role in the increase in net profit. This was driven by a significant rise in securities brokerage commissions and fees from the bank’s financial investment products, as the investment market picked up this year.

By affiliate, KB Kookmin Bank (3.5763 trillion won), the group’s flagship company, posted the highest net profit, followed by KB Securities (1.0675 trillion won), KB Insurance (681.1 billion won), KB Kookmin Card (331.7 billion won), KB Life Insurance (210.6 billion won), and KB Capital (202.8 billion won). In particular, KB Securities saw its cumulative net profit for the third quarter grow by 114.9% year-over-year as trading volume and assets under management increased due to the bull market. In contrast, insurance affiliates such as KB Insurance and KB Life saw their net profits decline by 11.2% and 17.3%, respectively, compared to a year ago, as valuation losses on assets under management widened due to rising interest rates.

Although net income increased significantly compared to last year, it is still too early to be optimistic. This is due to the cooling of the stock market and rising funding costs caused by higher interest rates. Even when comparing KB Financial Group’s second and third quarters, net income decreased by 4.3%, from 1.9922 trillion won to 1.9075 trillion won. During this period, net interest margin (NIM) fell from 1.74% to 1.72% as funding costs rose due to a narrowing spread between deposit and loan rates. Net fee income also plummeted by 29.7% (from 1.6019 trillion won in the second quarter to 1.1266 trillion won in the third quarter) due to factors such as a decline in stock trading volumes.

Na Sang-rok, Executive Vice President in charge of finance at KB Financial Group, stated, “Even amid persistent uncertainty in the financial markets, KB Financial Group is maintaining stable profit growth by proactively responding to market changes based on balanced profit-generating capabilities in both the banking and non-banking sectors.” He added, “Going forward, we plan to diversify our revenue streams to secure sustainable future growth engines for the Group, while continuing to pursue sound management focused on risk management and cost efficiency.”

Meanwhile, KB Financial Group held a board meeting that day and resolved to pay a quarterly cash dividend of 1,167 won per share. The total dividend payout amounts to 404.9 billion won.