KB Financial Group(US:KB)2024-02-07 14:20Financial Data and Key Metrics Changes - KB Financial Group's net profit attributable to controlling interest for 2023 was KRW4,631.9 billion, an increase of 11.5% year-over-year, driven by solid earnings improvements and stable cost control [2] - The group's gross operating profit reached a record high of KRW16 trillion, up 17.8% year-over-year [2] - General and administrative (G&A) expenses increased only 0.1% year-over-year, with a cost-to-income ratio (CIR) at a record low of approximately 41% [2] - Provisions for credit losses were KRW3,146.4 billion, significantly up year-over-year due to high interest rates and expanded credit risk [2] Business Line Data and Key Metrics Changes - Other operating profit posted KRW413.9 billion, showing significant improvement over the previous year's losses, up by KRW1,663.5 billion [4] - Net fee income and commission increased to KRW3,673.5 billion, up 4.5% year-over-year, primarily due to growth in business fees from retail customers [9] - Bank loans in won reached KRW342 trillion, a 4% year-to-date increase, with corporate loans growing by 7.7% year-to-date [5] Market Data and Key Metrics Changes - The group's net interest profit was KRW12,141.7 billion, up 5.4% year-over-year, reflecting improved net interest margins [33] - The CET1 ratio as of year-end 2023 was 13.58%, a 34 basis point improvement year-to-date [12] Company Strategy and Development Direction - The company is committed to a proactive shareholder return policy, with plans for gradual dividend increases and share buybacks [3][8] - The group aims to maintain strong capital adequacy and implement a detailed capital management plan to support shareholder returns [25] Management's Comments on Operating Environment and Future Outlook - Management expressed a conservative outlook for credit risk, particularly in the real estate market, and has set aside significant provisions to prepare for potential future risks [2][10] - The company anticipates maintaining loan growth within appropriate levels while focusing on asset quality and profitability [5] Other Important Information - The group recognized KRW332 billion out of a total of KRW372 billion for social contribution programs in Q4 [2] - The company has engaged in various social contribution activities, including providing free consulting to small businesses and supporting job seekers [13] Q&A Session Summary Question: Shareholder Return Guidance - The CFO indicated that the total shareholder return ratio for 2023 was approximately 38.6%, with expectations for 2024 to be around 37.5% [18] Question: ELS Issues and Future Responses - Management stated that the bank is focused on addressing ELS-related issues and rebuilding customer trust, with ongoing audits [20][22] Question: CET1 Ratio and Shareholder Returns - The CFO emphasized the group's strong earnings power and commitment to shareholder returns, with plans to utilize capital exceeding a 13% CET1 ratio for this purpose [24][25] Question: US Commercial Real Estate Exposure - Management confirmed a KRW1 trillion exposure to US commercial real estate, primarily in senior debt, and expressed confidence in the adequacy of provisions [29] Question: Credit Cost and Provisions - The CFO provided details on credit loss provisions, indicating a conservative approach and no anticipated additional provisioning for the year unless exceptional events occur [41]