KB Financial Group(US:KB)2023-10-28 13:23Financial Data and Key Metrics Changes - In Q3 2023, net profit was reported at KRW1,373.7 billion, reflecting an 8.4% decrease quarter-on-quarter due to financial market volatility and reduced other operating income [3] - Group's net interest income for Q3 2023 was KRW3,087.9 billion, up 3.8% quarter-on-quarter, driven by loan growth [4] - Cumulative ROE for the year was 11.7%, with annualized EPS reported at approximately KRW14,691, an 8.3% year-over-year increase [13] Business Line Data and Key Metrics Changes - Net fee and commission income for Q3 was KRW901.4 billion, down 5.3% quarter-on-quarter [4] - Q3 G&A expenses were KRW1,564.7 billion, showing a slight decrease quarter-on-quarter due to cost rationalization efforts [5] - Other operating profit showed a loss of KRW23.1 billion in Q3, impacted by higher market rates and a one-off loss of around KRW71 billion from insurance operations [16] Market Data and Key Metrics Changes - Bank loans in won increased to KRW336 trillion as of September 2023, up 1.8% compared to late June [6] - Corporate loans increased by approximately KRW5 trillion, with large corporate loans rising by 8.9% compared to end June [6] - Group's NPL ratio as of September 2023 was 0.48%, up 4 basis points from the end of June [14] Company Strategy and Development Direction - The company aims to maintain a progressive dividend payout policy, emphasizing shareholder returns through both cash dividends and share buybacks [9][31] - The management is focused on maintaining a conservative provisioning policy to mitigate potential economic shocks and sustain stable net profit generation [66] - The company is actively managing asset quality by strengthening management of potential non-viable exposures [17] Management's Comments on Operating Environment and Future Outlook - Management expects Q4 NIM to remain stable, despite ongoing downward pressure from funding costs [7][34] - The company anticipates that full-year 2023 group credit cost will not exceed 50 basis points, reflecting a conservative approach to provisioning [14] - Management expressed confidence in the company's ability to manage risks associated with overseas real estate investments, indicating a low likelihood of losses [28] Other Important Information - The company reported a cumulative credit cost of 52 basis points for Q3, reflecting a conservative provisioning stance against economic uncertainties [66] - The estimated group BIS ratio as of late September was 16.76%, with a CET1 ratio of 13.70% [71] - The company plans to implement changes to its dividend policy in line with potential regulatory updates by the end of the year [29] Q&A Session Summary Question: Dividend payout policy changes - The CFO confirmed that the company will continue to adopt a progressive dividend payout policy [9][31] Question: Concerns about overseas real estate investments - Management reassured that the company has substantial loss absorption capability and is closely monitoring the situation [50] Question: Future dividend confirmations and government policy changes - The company is working to reflect improved government policies for dividends starting from Q1 of next year [29][51] Question: Additional provisioning for Q4 - Management indicated that the previous guidance for provisioning remains unchanged despite potential economic fluctuations [36] Question: Share buyback routine - The company is considering making share buybacks a routine practice, aligning with shareholder return policies [57]