KB Financial Group Inc. (KB) Q2 2022 Earnings Call Transcript

For the period ending June 30, 2022

July 21, 2022 3:00 a.m. ET

Prepared Remarks

Questions and Answers

Call Participants

Prepared Remarks:

Peter Kweon

Greetings. I am Peter Kweon, the Head of IR at KBFG. We will now begin the 2022 first half business results presentation. I would like to express my deepest gratitude to everyone for participating today.

We have here with us our Group CFO and Senior Managing Director, Scott Seo; as well as other members from our group management. We will first hear the 2022 first half major financial highlights from CFO and Senior Managing Director, Scott Seo, and then have a Q&A session.

I would like to invite our Senior Managing Director to deliver 2022 first half earnings results.

Scott Seo

Good afternoon. I am Scott YH Seo, CFO of KB Financial Group. Thank you for joining the company’s first half 2022 earnings presentation.

Before moving on to our earnings results, allow me to briefly run through key business highlights of the group. Q2 ‘22 group net profit was KRW 1.3 trillion, up 11.4% year-over-year as of the first half, reporting KRW 2.8 trillion. Group ROCE was 12.5%, being kept at a steady level as of the first half, while annualized EPS, earnings per share, was around KRW 14,000, up 11% year-over-year on a robust uptrend.

Also, today, KBFG’s BOD approved KRW 500 per share as the quarterly dividend. And following last February, we decided to do share cancellation of KRW 150 billion of treasury shares and, as such, do KRW 300 billion of total share cancellation this year. In the midst of the spread of macro uncertainties and difficult business backdrop underpinned by our outstanding capital adequacy and stable earnings capacity, we have been consistent and differentiated in implementing our shareholder return policy.

Globally, there is growing concern over saturation while Korean economy is mired with 3 highs, high interest rate, high inflation and high exchange rate, which may undermine profitability of the banking business and widen credit risk. We therefore are focused on the fundamentals and preemptive risk management.

For example, this quarter, based on conservative projections for GDP growth, policy rates and the FX rate as well as other indicators and scenario analysis for crisis, we made around KRW 121 billion of additional provisions. By way of such conservative provisioning stance, we’ve been enhancing loss-absorbing capacity, bringing group’s NPL coverage ratio to 222.4%, which is the industry’s top-notch level as well as top-notch in terms of the global standards.