The Korea Herald


[Global Finance Awards] KB grows strength by leaps and bounds

Financial of the Year/KB Financial Group

By Park Han-na

Published : Nov. 30, 2023 - 11:32

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KB Financial Group Chairman Yang Jong-hee (KB Financial Group) KB Financial Group Chairman Yang Jong-hee (KB Financial Group)

KB Financial Group has solidified its status as a leading banking conglomerate by diversifying its revenue streams and strengthening its business portfolio beyond traditional lending activities.

For two consecutive years, the group achieved net profits exceeding 4 trillion won ($3.1 billion) since 2021. It regained its title as the country's leading financial group in 2017, when its net profit surpassed 3 trillion won for the first time in its history.

Its stellar performance stemmed from a growth strategy focusing on the balance between revenues generated through interest payments and non-interest revenue sources.

As of the third quarter of 2023, cumulative net profit recorded 4.37 trillion won, maintaining stable profit generation through expansion of non-interest income, and pursuit of cost-effectiveness in sales and administrative expenses.

In structural transformation, the group has fortified its business portfolio through a series of acquisition deals including LIG Insurance, now rebranded as KB Insurance, Hyundai Securities and Prudential Life Insurance, which are now rebranded as KB Insurance, KB Securities and KB Life Insurance.

Its business expansion goes beyond the saturating domestic market.

“We are accelerating our efforts to target overseas markets in order to overcome the growth limitations of the domestic financial market and secure the potential for continued growth and value creation,” a KB official said.

KB Kookmin Bank completed its acquisition of Cambodia's Prasac Microfinance Institution, acquired shares of Bukopin Bank, a mid-sized Indonesian bank, and established local corporations in Southeast Asia for its affiliates to expand its business base.

The number of overseas networks expanded rapidly from 39 in 2017 to 697 in 14 countries as of the end of last year. The total value of overseas assets held by KB Financial Group has also grown over four times from $7.6 billion in 2018 to $33.9 billion as of the end of 2022.

Increasing shareholder value is another area that the group has focused on.

Starting from 2022, KB Financial Group has been regularizing quarterly dividends to improve the visibility of payouts and enhance shareholder value, and has carried out a cancellation of Treasury shares worth 300 billion won and 150 billion won in February and August 2022, respectively.

In the second quarter of 2023, the company decided to purchase and cancel Treasury shares worth 300 billion won for the second time, following the purchase and cancellation of 300 billion won worth of shares in February. The dividend per share for the first to third quarters of 2023 was resolved to be 510 won each, a slight increase compared to the previous year.

"This year, we plan to lead and continuously pursue win-win efforts centered on the three major areas of 'shared growth, local community and nurturing future generations,'" the official said.

The conglomerate has been making continuous efforts in environmental, social and corporate governance activities.

KB Financial Group was the first financial company to establish a committee dedicated to ESG within the board of directors in March 2020 in order to strengthen ESG management in line with global standards and fulfill social responsibilities.

Its mid- and long-term roadmap for its decarbonization campaign, "KB Green Wave 2030," aims to cut carbon emissions by 42 percent. In addition, it plans to expand the size of financial products, investment and loan programs tied to ESG from the current 20 trillion won to 50 trillion won.

KB Financial Group Chairman Yang Jong-hee, who took office on Nov. 21, emphasized financial firms' role in giving back to society as the public bears burdens largely buoyed by rising interest rates.

"I deeply feel the weight of responsibility that comes with the role of finance," Yang said during his inaugural ceremony held at the group's headquarters in Seoul.

"There is a saying that 'If we want to go far, we go together.' Without the growth of values for both customers and society, the company's sustainable leap forward becomes a challenge,” he added.

Yang vowed to continuously discover areas where KB can take social responsibility and communicate with society so that it can become a role model as a leading financial group.