KB Financial Group, Inc. Q1 FY2025 earnings call

• Announced shareholder return roadmap in Oct last year, aiming to demonstrate shareholder return policy in 2025.
• March end CET1 ratio 13.67%, up 14 bp Q-o-Q, maintaining industry's highest capital ratio.
• Q1 net profit KRW1.6973 trillion, group ROE 13.04%.
• Non-bank subsidiaries contributed 42% to group earnings, with securities and insurance showing improved results.
• Gross net interest income KRW3.2622 trillion, NIM improved due to core deposits and cost reduction.
• Non-interest income KRW1.292 trillion, net fee income ~KRW934 billion since 2023.
• G&A expenses stable at KRW1.6056 trillion, CIR at record low 35.3%.

KBFG 2025 Q1 net profit posted KRW1.6973 trillion. Non-bank in the group's earnings contribution increased to 42%. Gross net interest income amounted to KRW3.2622 trillion. Group and bank's NIM stood at 2.01% and 1.76% respectively, up 3 bps and 4 bps Q-o-Q. Non-interest income was KRW1.292 trillion. Insurance operating profits were KRW437.8 billion. General and administrative expenses were KRW1.6056 trillion, down 1.4% Y-o-Y, with CIR at 35.3%. Provisions for credit losses were KRW655.6 billion, credit cost 54 bps Q-o-Q. March end CET1 ratio was 13.67%, a 14 bp increase Q-o-Q.

• Intends to maintain shareholder return policy linked to CET1 ratio, flexible in second half based on market conditions.
• Target RWA growth rate for 2025 is 4.5%.
• Expect annual credit costs to be a manageable mid-40 bps level.

• Concerns over global economic downturn and market volatility.
• Uncertainties in insurance assumptions and discount rates.
• Potential NPLs from sectors like Homeplus and commercial real estate.

Q: Regarding Q1 shareholder return and second half policy A: CFO stated the value program principle remains unchanged, second half shareholder returns will be flexible based on market. Excess capital over target ratio will be used, and Q1 actions preemptively set up second half returns.

Q: About impairment dividends A: Considering the intention, but no detailed policies yet, will monitor trend and market response.

Q: About securities business regulation and RWA A: KB Securities is watching trends regarding IMA entry, but no immediate plan; CCR managed with focus on asset quality recovery.

Q: About NIM defense and corporate loans A: NIM defense to continue with core deposit growth, corporate loans growth planned at ~6%, managed within planned range considering economic factors.

Q: About Homeplus and other NPLs A: Provisions satisfied for Homeplus exposure, conservatively set aside provisions for real estate, and will continue conservative approach for potential NPLs.