KB Financial Group Inc. (KB) Q2 2023 Earnings Call Transcript

For the period ending June 30, 2023

July 25, 2023 3:00 a.m. ET

Prepared Remarks

Questions and Answers

Call Participants

Prepared Remarks:

Operator

Peter Kweon

Greetings. I'm Peter Kweon, the Head of IR at KBFG. We will now begin the 2023 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 SEVP, Scott YH Seo as well as other members from our group management.

We will first hear the 2023 first half major final highlights from CFO and SEVP, Scott YH Seo and then engage in a Q&A session. I would like to invite our SEVP to deliver our 2023 first half earnings results.

Young Ho Seo

Good afternoon. I'm Scott YH Seo, CFO of KB Financial Group. Thank you very much for joining our first half 2023 earnings conference call. I will begin with key performance metrics followed by earnings performance in greater detail. Second quarter '23 group's net profit was KRW 1,499.1 billion, up 12.2% on year to KRW 2,996.7 billion as of the first half of the year.

Despite difficult operational backdrop with slowing real economy and rising sentiment for instability surrounding the financial market, Q2 net profit was driven by evenly spread growth of interest and commissions income and supported by cost control efforts, we outperformed market consensus by around 12%.

The group's first half ROE also reported 12.2% and annualized EPS was around KRW 15,201 with around 9% year-over-year increase displaying a sustained growth trend. But considering the recent interest rate trend and macro backdrop, we expect NIM to - and to face downward pressure during the second half. And as we continue to stick to conservative lending stance in light of internal and external uncertainties, loan growth will inevitably be constrained with '23 second half interest income growth suppressed.

KBFG will pursue growth around high-quality assets to secure sustainable interest income basis and by continuing our efforts around business diversification, we will drive growth of nonbank and noninterest business, while corporate-wide cost control will help fuel steady and solid bottom line growth during the year.

Also, in order to bring sustainable growth, KBFG has been steadfast towards inclusive financing, leading the efforts and making social contribution, pursuing co-prosperity with the local communities, and we'll continue to find ways to solve society's issues and expand our role in practicing social responsibility that define sustainable transformation.