KB Financial Group (NYSE:KB) Q4 2025 Earnings call February 05, 2026 02:00 AM ET Company ParticipantsKwon Bong-joong - Head of Investor RelationsSang-rok Na - Managing Director and CFONone - Company RepresentativeConference Call ParticipantsHye-jin Park - Research AnalystJaewoong Won - Senior AnalystJihyun Cho - Executive Director and Equity Research AnalystSinyoung Park - Managing Director and Senior Analyst Covering Korea FinancialsTae Joon Jeong - Equity AnalystKwon Bong-joongGreetings, everyone. I am Kw ...

KB Financial Group (NYSE:KB) Q4 2025 Earnings call February 05, 2026 02:00 AM ET Company ParticipantsKwon Bong-joong - Head of Investor RelationsSang-rok Na - Managing Director and CFONone - Company RepresentativeConference Call ParticipantsHye-jin Park - Research AnalystJaewoong Won - Senior AnalystJihyun Cho - Executive Director and Equity Research AnalystSinyoung Park - Managing Director and Senior Analyst Covering Korea FinancialsTae Joon Jeong - Equity AnalystKwon Bong-joongGreetings, everyone. I am Kw ...

KB Financial Group (NYSE:KB) Q4 2025 Earnings call February 05, 2026 02:00 AM ET Speaker0Greetings, everyone. I am Kwon Bong-joong, Head of IR at KB Financial Group. We will now begin the 2025 full-year business results presentation. Thank you very much for participating in today's earnings release. We have here with us executives from the group, including CFO Na Sang-rok. First, our group CFO will cover 2025 full-year business results. After that, we will have a Q&A session. I will now invite our group CFO ...

2025 Business Results February 2026 Disclaimer 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 audited by the Group's independent auditor, and accordingly, is subject to change. 2. The consolidated financial information for 2022 and 2023 presented herein have been restated retrospectively based on the FSS's response to inquiry on Korean IFRS17(K-IFRS) 3. From ...

Core Viewpoint - KB Financial Group is rated as a Hold, with an expected upside of only 9% based on a residual earnings model and relative valuation [1] Valuation Metrics - The current trading price of KB Financial Group is at 0.76 price/book, which may be perceived as "cheap" by many investors [1]

Financial Performance Highlights - 3Q25 Group net profit reached KRW 5,121.7 billion, a 16.6% YoY increase, driven by balanced growth in interest and fee income and disciplined cost control[22] - The non-bank sector contributed 37% to the group's net profit[14, 27, 30] - Group ROE stood at 11.72%, a 1.48%p YoY increase[24, 25] Key Financial Metrics - Group net interest income increased by 1.3% YoY to KRW 9,704.9 billion, supported by stable loan growth and reduced funding costs[36] - Group net non-interest income decreased slightly by 1.1% YoY to KRW 3,739.0 billion, but fee income grew by 3.5% YoY[41] - Group G&A expenses increased by 2.8% YoY to KRW 5,007.7 billion, with the CIR inching up by 0.7%p to 37.2%[47, 49] - Group provision for credit losses significantly decreased by 44.4% QoQ to KRW 364.5 billion, with the cumulative CCR stabilizing at 46bps[53] Capital Adequacy - Group BIS ratio was 16.28%, and CET-1 ratio was 13.83% as of September 2025, maintaining industry-leading capital adequacy despite RWA increase[60, 65] - Risk-weighted assets (RWA) grew by 3.5% YTD[10, 60] Subsidiary Performance - KB Kookmin Bank reported a net profit of KRW 3,364.5 billion with a ROE of 11.73%[30, 92] - KB Securities recorded a net profit of KRW 496.7 billion with a ROE of 9.73%, ranking No 1 in IPO and DCM league tables[30, 95] - KB Insurance's net profit was KRW 766.9 billion with a ROE of 18.58% and a K-ICS ratio of 191.8%[30, 99] - KB Kookmin Card's net profit reached KRW 280.6 billion with a ROE of 6.96%[30, 103]

Group 1 - The analysis compares Exor N.V. and Porsche Automobil Holding SE, with a preference for Exor N.V. [1] - Exor N.V. recently reported its half-year results, indicating positive performance [1] Group 2 - The article emphasizes the importance of fundamental, income-oriented, long-term analysis in investment decisions [1]

Core Viewpoint - KB Financial Group Inc. is considered a quality investment in the financial sector, offering a valuation that appears discounted compared to its peers, indicating a potential value opportunity [1]. Group 1 - KB Financial Group Inc. is listed on the NYSE under the ticker KB [1]. - The company is recognized for its quality play within the financial sector [1]. - The current valuation of KB Financial Group is perceived as undeservedly discounted when compared to its competitors [1]. Group 2 - The analysis is conducted by Labutes IR, a fund manager and analyst with over 18 years of experience in the financial markets [1]. - The author has a background in various types of institutions within the industry, focusing on the buy side and portfolio management [1]. - The analysis is associated with the existing author known as The Outsider [1].

Core Viewpoint - KB Financial Group is identified as a strong value stock, currently holding a Zacks Rank 2 (Buy) and an A grade for Value, indicating it is likely undervalued in the market [4][9]. Valuation Metrics - KB Financial Group has a P/E ratio of 7.45, significantly lower than the industry average of 10.19, suggesting it is undervalued [4]. - The company has a PEG ratio of 0.63, compared to the industry average of 0.78, indicating favorable growth expectations relative to its price [5]. - KB's P/B ratio stands at 0.78, well below the industry average of 2.27, further supporting the undervaluation thesis [6]. - The P/S ratio for KB is 1.18, compared to the industry average of 1.67, reinforcing its position as a potentially undervalued stock [7]. - The P/CF ratio is 7.50, significantly lower than the industry average of 17.44, highlighting strong cash flow relative to its market value [8]. Earnings Outlook - The strength of KB Financial Group's earnings outlook, combined with its favorable valuation metrics, positions it as one of the market's strongest value stocks [9].

Financial Data and Key Metrics Changes - Q2 net profit reported at KRW 1,738.4 billion, with first half cumulative profit at KRW 3,435.7 billion, representing a 23.8% year-over-year increase [4][9] - Return on Equity (ROE) stands at 13.03%, with a Common Equity Tier 1 (CET1) ratio of 13.74% as of June [4][20] - Total shareholder return for 2025 is projected at KRW 3,100 billion, a significant year-over-year increase [6] Business Line Data and Key Metrics Changes - Noninterest income increased by 10.9% year-over-year, driven by higher performance in securities and derivatives [9][15] - First half net interest income posted at KRW 6,368.7 billion, with a net interest margin (NIM) of 1.73% [12][14] - Nonbank operations accounted for 39% of the group's first half net profit, indicating a diversified business portfolio [11] Market Data and Key Metrics Changes - Bank loans in won reached KRW 372 trillion, growing 2.4% year-to-date and 1.4% quarter-over-quarter [13] - Household loans totaled KRW 181 trillion, with mortgage and unsecured loans growing evenly [13] - Corporate loans reached KRW 191 trillion, primarily driven by large corporates and prime SMEs [13] Company Strategy and Development Direction - The company plans to focus on capital discipline, managing risk-weighted assets (RWA) with greater precision while ensuring shareholder return expansion [7][8] - Emphasis on maintaining a balance between ROE and capital ratio to ensure sustainable growth [8] - Plans to explore new business opportunities and enhance productivity through AI [16] Management's Comments on Operating Environment and Future Outlook - Management expects asset quality conditions to improve favorably due to government economic stimulus efforts [18] - Credit cost is anticipated to stabilize in the mid-forty basis points range for the second half of the year [30] - The company is optimistic about achieving meaningful improvements in asset quality by rebalancing nonperforming assets [19] Other Important Information - The company has committed to a proactive buyback strategy, with KRW 300 billion already executed in Q2 [4][5] - G&A expenses for the first half were KRW 3,355.3 billion, reflecting a 4.1% growth year-over-year [16] - The NPL ratio improved to 0.72%, with an NPL coverage ratio of 138.5% [19][20] Q&A Session Summary Question: Size of second half shareholder return and timing of share buyback - Management confirmed the second half shareholder return size is KRW 850 billion, with excess capital of KRW 190 billion allocated for future returns [22][25] Question: Confusion regarding provisioning levels despite improved asset quality metrics - Management explained that additional provisioning was made to ensure loss absorption capability, particularly in light of potential risks in the real estate sector [23][27] Question: Loan growth guidance in light of government measures to control household loans - Management indicated that household loan growth is expected to decelerate to about 3%, while corporate loans are projected to grow at 6% to 7% [36][37] Question: Potential interim dividend payout from subsidiaries - Management clarified that interim dividends from securities and brokerage subsidiaries are being considered, while insurance subsidiaries may not contribute this year [41] Question: PBR adjustment and its impact on dividend policy - Management stated that they are open to adjusting the mix between cash dividends and share buybacks based on PBR levels, with a range of 0.8x to 1x being considered [42][53]