KB Financial Group Inc (KB) 2024 Q2 法說會逐字稿

Greetings. I am Peter Kwon, the Head of IR at KBFG. We will now begin the 2024 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, Jae Kwan Kim, as well as other members from our group management. We will first hear the 2024 first half major financial highlights from CFO and SEVP, Jae Kwan Kim, and then engage in a Q&A session. I would like to invite our SEVP to deliver 2024 first half earnings results.

問候。我是 Peter Kwon，KBFG IR 主管。我們現在開始發布 2024 年上半年業績。我謹向大家今天的參與表示最深切的感謝。我們的集團財務長兼高級副總裁 Jae Kwan Kim 以及集團管理層的其他成員也與我們在一起。我們將先聽取 CFO 兼 SEVP Jae Kwan Kim 介紹 2024 年上半年的主要財務亮點，然後進行問答環節。我想邀請我們的 SEVP 發布 2024 年上半年收益報告。

Good afternoon. I am Jae Kwan Kim, CFO of KB Financial Group. Thank you for joining KBFG's 2024 first half earnings presentation. Before going into the second quarter earnings result, I will first go over the company's first half shareholder return plan, which was resolved by today's BoD meeting.

午安.我是 KB 金融集團財務長 Jae Kwan Kim。感謝您參加 KBFG 2024 年上半年收益發表會。在介紹第二季業績之前，我先回顧一下公司上半年的股東回報計劃，該計劃已由今天的董事會會議決議。

Please turn to page 4 of the presentation deck. Despite difficult operational backdrop, KBFG has been pushing forward with industry leading shareholder return policy with a sustained effort on capital management to maintain industry's top notch capital strength. As a result, CET1 ratio as of end of June was up 17 basis points Q over Q expected to reach 13.59%, which is a highest capital ratio in the domestic market.

請翻到簡報的第 4 頁。儘管經營困難，KBFG仍持續推動業界領先的股東回報政策，持續加強資本管理，維持業界一流的資本實力。至6月底，CET1資本適足率較上季上升17個基點，達13.59%，為國內市場最高資本適足率。

As you are aware, last quarter, we were the first in the industry to start paying out equal amount dividend every quarter on a total amount basis, enhancing visibility on annual payout and DPS while retaining flexibility in implementing share buyback and cancellation with a view towards improving shareholder return.

如您所知，上個季度，我們在業界率先開始每季度按總額支付等額股息，提高了年度派息和每股股息的可見性，同時保留了實施股票回購和註銷的靈活性，以期提高股東回報。

As for part of such efforts, today, the BoD decided on quarterly cash payout of KRW791 per share and buyback and cancellation amounting to KRW400 billion. KRW791 dps is a marginal increase following the impact from KRW320 billion share buyback announced during the first quarter, while additional share buyback and cancellation of KRW400 billion is yet again a testament of the commitment of the BoD and the management towards enhancing TSR, total shareholder return that is, and shareholder value.

作為此類努力的一部分，董事會今天決定季度現金支出為每股 791 韓元，回購和取消金額為 4,000 億韓元。 791韓元受第一季宣布的3,200 億韓元股票回購的影響，每股盈餘略有增加，而額外回購和註銷4,000 億韓元的股票再次證明了董事會和管理層對提高股東總回報率、股東總回報率的承諾。

All in all, we will in total, buyback and cancel KRW720 billion, which distinguishes our shareholder return policy, underpinned by industry's top-notch capital strength and stable earnings capacity in spite of challenging operational headwind with growing macro uncertainties.

總而言之，我們將總共回購和取消7,200 億韓元，這使我們的股東回報政策與眾不同，儘管宏觀不確定性不斷增加，營運逆風嚴峻，但以行業一流的資本實力和穩定的盈利能力為基礎。

KBFG will endeavor to continue on with a progressive dividend policy, employing various means within the boundaries of sustaining robust capital adequacy so that we may meet the expectations of the market.

KBFG將努力繼續推行漸進式股利政策，在維持穩健資本充足的範圍內採取多種手段，以滿足市場的預期。

Now I will move on to KBFG's earnings for the first half of 2024. First and key business performance highlight and metrics of the group. KBFG's first half 2024 Group net profit reported KRW2,781.5 billion. Because of sizable ELS compensation cost in Q1, this was a 7.5% decline year over year.

現在我將討論 KBFG 2024 年上半年的收益。集團的首要且關鍵的業務績效亮點和指標。KBFG 2024年上半年集團淨利為27,815億韓元。由於第一季 ELS 補償成本相當大，年減了 7.5%。

But if you look at the second quarter on the back of evenly spread growth coming from the bank and non-bank businesses and solid earnings expansion, particularly from non-bank subsidiaries, i.e., securities and insurance, net profit came in at KRW1,732.4 billion.

但如果你看一下第二季度，銀行和非銀行業務均勻分佈的增長以及穩健的盈利擴張，特別是非銀行子公司，即證券和保險，淨利潤為1,732.4韓元十億。

Putting aside one-offs such as reversals from ELS compensation cost and loan loss provision, normalized net profit is at around KRW1.6 trillion. KBFG will continue its effort around keeping stable earnings fundamentals, supported by conservative provisioning stance and diversified group portfolio, so as to solidify its basis for sustainable growth.

撇開 ELS 補償成本和貸款損失撥備沖銷等一次性因素，正常化淨利潤約為 1.6 兆韓元。 KBFG將繼續圍繞穩定的盈利基本面，以保守的撥備立場和多元化的集團投資組合為支撐，鞏固可持續增長的基礎。

G&A expense in the first half was KRW3,222.1 billion, up 2% year over year. Cost income ratio, which represents cost efficiency of the Group, was supported by solid earnings growth trend and corporate wide cost efficiency efforts, KB keeping in line with the controlled level of 36.4%.

上半年管理費用為 32,221 億韓元，年增 2%。代表集團成本效率的成本收入率受到穩健的盈利增長趨勢和公司範圍內成本效率努力的支持，KB 保持在 36.4% 的控制水平。

Group's labor costs shifted to a downward trajectory last year, and we decline in number of headcount from early retirement program and cost efficiency efforts continuing, we expect to see Group's CIR trend to continue and stabilize downward.

去年，集團的勞動力成本開始下降，加上我們因提前退休計畫而減少的員工人數以及成本效率的努力仍在繼續，我們預計集團的 CIR 趨勢將繼續並穩定下降。

First half cumulative credit cost for the Group was 40 basis points, being kept at a steady level. Macro uncertainties are continuing this year, triggering concern on overall asset quality of the industry, but we have ample capacity to respond that by preemptive conservative provisioning and rigorous management against additional risks. As such, we believe Group's credit cost will be kept under a steady control.

上半年，本集團累計信貸成本40個基點，維持穩定水準。今年宏觀不確定性依然存在，引發對產業整體資產品質的擔憂，但我們有足夠的能力應對，透過先發制人的保守撥備和嚴格的風險管理來應對。因此，我們相信集團的信貸成本將得到穩定控制。

Meanwhile, banking sector prices in the market have displayed strength on the back of high expectations placed on the value of programs since the beginning of the year. As I mentioned at the beginning on the shareholder return page, KBFG has been at the forefront of progressive shareholder return underpinned by stronger fundamentals, capital ratio strength, and stable governance structure writing its own version of value up history.

同時，自年初以來，由於對專案價值的高預期，市場上銀行業的價格表現出強勢。正如我在股東回報頁面一開始提到的，KBFG 一直處於股東回報不斷進步的前沿，其基礎是更強勁的基本面、資本比率強度和穩定的治理結構，書寫了自己版本的價值上升歷史。

Also to maintain consistency of our value up approach, we have faithfully implemented mid to longer term capital plan, which was announced last year and was the first company in Korea to make preliminary value of disclosures back in May. In the second half, in addition to scheduled value of disclosures, we will continue to endeavor to drive corporate value and shareholder value enhancement.

此外，為了保持我們價值提升方法的一致性，我們忠實地實施了去年宣布的中長期資本計劃，並且是韓國第一家在五月披露初步價值的公司。下半年，除了預定的揭露價值外，我們將繼續努力推動企業價值和股東價值的提升。

With that said, I will move on to detailed items. 2024 first half Group net interest income posted KRW6,357.7 billion and Q2 net interest income recorded KRW3,206.2 billion and went up 9% YoY and 1.7% QoQ respectively. This was possible on the back of loan average balance growth and continued interest income contribution expansion, including non-bank subsidiaries such as insurance, despite the net interest margin contraction following the interest rate decline.

話雖如此，我將繼續討論詳細項目。 2024年上半年集團淨利息收入為63,577億韓元，第二季淨利息收入為32,062億韓元，分別較去年同期成長9%及較上季成長1.7%。儘管利率下降導致淨利差收縮，但由於貸款平均餘額成長和利息收入貢獻持續擴大（包括保險等非銀行子公司），這一點得以實現。

First half Group net fee and commissions income posted KRW1,909.8 billion and increased 2.4% YoY. This is mostly attributable to the increase in stocks transaction amount, following higher expectations regarding the value of program, expanding brokerage income, and increasing securities financial product, sales fees, card fees, and capital fees, and commissions.

上半年集團手續費及佣金淨收入達 19,098 億韓元，較去年同期成長 2.4%。這主要是由於專案價值預期提高，股票交易金額增加，經紀收入擴大，證券金融產品、銷售費、卡費、資金費和佣金增加。

However, Q2 Group net fee income posted KRW919.7 billion and with the IB fee, [decline] following the real estate PF market contraction, it went down slightly QoQ. However, on the back of strengthening group wide sales activities and efforts to diversified business, for six consecutive quarters a KRW900 billion level of net fee income was recorded, attesting to the fact that Group fee income generation fundamentals has been robustly maintained.

然而，第二季集團淨費用收入為 9,197 億韓元，隨著房地產 PF 市場萎縮，IB 費用[下降]，環比略有下降。然而，在加強集團範圍內的銷售活動和努力實現多元化業務的背景下，連續六個季度錄得9,000億韓元的淨手續費收入水平，證明集團手續費收入產生的基本面得到了穩健維持。

Next, I will cover other operating profit. Q2 other operating profit posted KRW323.1 billion and with improvements in the financial market environment, including interest rate and stock index, on the back of expansion of securities, investments, performance, including bonds and beneficiary securities, it posted sound performance with a 19.5% QoQ increase.

接下來，我將介紹其他營業利潤。第二季其他營業利潤為 3,231 億韓元，隨著利率和股票指數等金融市場環境的改善，以及債券和受益證券等證券、投資、業績的擴大，表現良好，增長率為 19.5環比增長%。

On a first half cumulative basis, it posted KRW593.5 billion. And with a contraction in performance related to securities, FX, and derivatives due to the interest rate and FX rate effect, the performance was lower than the same period compared to the previous year.

上半年累計銷售額為5,935億韓元。而證券、外匯及衍生性商品相關業績受利率及匯率影響出現萎縮，業績較上年同期下降。

On the other hand, in the case of the first half insurance income, it went up KRW185.7 billion YoY. This is attributable to the previous quarter's non-bank insurance IBNR reverse -- reserve reversal and long-term and general insurance loss ratio improvement.

另一方面，上半年保險收入較去年同期增加1,857億韓元。這歸因於上季非銀行保險IBNR的逆轉——準備金逆轉以及長期和一般保險損失率的改善。

Next, I will cover G&A expenses. First half, G&A. posted KRW3,222.1 billion. And on the back of continuous cost rationalization efforts, it went up around 2% YoY and Q2 G&A decreased 2.1% QoQ and is being well managed.

接下來，我將支付一般管理費用。上半場，G&A。公佈32,221億韓元。在持續成本合理化努力的支持下，年增約 2%，第二季 G&A 環比下降 2.1%，管理良好。

Next, the Group provision for credit losses. Q2 provision for credit losses posted KRW552.6 billion, an increased QoQ. Despite the provisioning reversal due to one-offs in this quarter, this is mostly attributable to additional provisioning related to real estate trust and maintaining our conservative provisioning accumulation stance in case of future economic slowdown.

其次，本集團提列信用損失準備。第二季信貸損失準備金為 5,526 億韓元，較上季增加。儘管本季撥備出現一次性逆轉，但這主要是由於與房地產信託相關的額外撥備以及在未來經濟放緩的情況下維持保守的撥備累積立場。

On the other hand, first half cumulative provision for credit losses posted KRW981 billion and decreased by a great degree YoY. This was caused by the underlying effect stemming from the preemptive large scale provisioning, reflecting the conservative FLC scenario in the previous year?

另一方面，上半年累計信用損失準備金為9,810億韓元，年比大幅下降。這是由先發制人的大規模撥備帶來的潛在影響造成的，反映了去年保守的FLC情景？

Last, regarding the Q2 non-operating profit. On the back of the underlying effect following the previous Q1 large scale ELS provisioning reversal, it grew by a large degree QoQ. From the next page, I will go over key financial indicators.

最後，關於第二季的營業外利潤。在先前第一季大規模 ELS 撥備逆轉後的潛在影響下，季比大幅成長。從下一頁開始，我將回顧關鍵的財務指標。

Next, the Group's profitability indicators. 2024 first half Group ROE posted 10.78%. Non-operating profit, which declined steeply due to the previous quarter's ELS compensation cost recovered and based on a differentiated business portfolio, core profit growth continued and the recurring ROE excluding one-offs, posted 12.26% and solid profitability is being maintained.

其次是集團的獲利指標。 2024年上半年集團淨資產收益率為10.78%。營業外利潤因上一季ELS補償成本回升而大幅下降，基於差異化業務組合，核心利潤持續增長，剔除一次性費用的經常性ROE達到12.26%，盈利能力繼續保持穩健。

Next, I will cover bank's loans in won growth. 2024 June end, bank loans in won posted KRW352 trillion and increased 2.3% compared to end March and increased 2.9% YTD. Due to our asset quality and profitability based loan policy, an overheated competition in the corporate loan market, the bank's loans in won in the early part of the year showed slightly low growth. But from Q2, loan demand increase centering on real demand and loan growth is gradually recovering.

接下來，我將討論韓元成長中的銀行貸款。2024 年 6 月底，韓元銀行貸款達 352 兆韓元，較 3 月底成長 2.3%，年初至今成長 2.9%。由於我們以資產品質和獲利能力為導向的貸款政策，以及企業貸款市場競爭過熱，年初該銀行的韓元貸款呈現小幅低速成長。但從第二季開始，貸款需求以實際需求為主，貸款成長逐漸恢復。

In detail, household loans posted KRW172 trillion. And with the expansion in loan demand and loan from national funds due to home transaction increase, it went up 3.0% YTD around a KRW5 trillion increase. In the case of corporate loans, in Q2 with the expansion in large corp loans and the addition of moderate SME loan growth, it increased 2.7% YTD.

具體而言，家庭貸款達到172兆韓元。隨著房屋交易增加導致貸款需求擴大和國家基金貸款增加，年初至今增加了 3.0%，增幅約 5 兆韓元。就企業貸款而言，第二季度，隨著大型企業貸款的擴張以及中小企業貸款的溫和成長，年初至今成長了 2.7%。

We will monitor the economic circumstances and household loan situation and focus on qualitative growth on asset quality and profitability in the second half as well and flexibly manage loan growth speed. Next is net interest margin, Q2 Group and bank NIM each posted 2.08 percentage points and 1.84 percentage points respectively, and each declined by 3 bp QoQ, respectively.

下半年我們將監測經濟狀況和居民貸款情勢，重點關注資產品質和獲利能力的質的成長，靈活掌握貸款成長速度。其次是淨利差，第二季集團和銀行淨利差分別上升 2.08 個百分點和 1.84 個百分點，季減 3 個基點。

This was mostly attributable to spread contraction in market interest rate decline and other factors leading to lower asset yields. However, on a YoY basis until now, Group and bank each increased by 3 bp respectively.

這主要是由於市場利率下降利差收縮等因素導致資產收益率下降。然而，截至目前，集團和銀行分別較去年同期成長 3 個基點。

Let's go to the next page. I will cover the Group's cost income ratio CIR. As you can see in the top left hand graph, 2024 first half Group CIR posted 36.4%. And with continued core profit growth and group wide cost management efforts, cost efficiency improvement trend is continuing and is showing downward stabilization. Next to the credit cost ratio. Q2 Group credit cost posted a 43 bp level and slightly increased QoQ, but is still maintaining stable asset quality, still within a predictable scope.

讓我們進入下一頁。我將介紹集團的成本收入比率CIR。正如您在左上方圖表中看到的，2024 年上半年集團 CIR 為 36.4%。隨著核心利潤的持續成長和集團範圍內成本管理的努力，成本效率改善的趨勢正在持續，並呈現向下穩定的趨勢。接下來是信貸成本比率。第二季集團信貸成本較上季上升43個基點，略為上升，但資產品質仍維持穩定，仍在可預期範圍內。

Last, is Group's capital adequacy. Despite the won and dollar FX increase in the quarter, on the back of Group's levels, active risk weighted asset management efforts and solid net profit increase, June end BIS ratio and CET1 ratio is expected to post 16.63% and 13.59%, respectively, the highest level in the financial industry.

最後，是集團的資本適足率。儘管本季度韓元和美元匯率上漲，但在集團水平、積極的風險加權資產管理努力和穩健的淨利潤增長的支持下，6月底BIS比率和CET1比率預計將分別達到16.63%和13.59%，金融業最高水平。

As we had mentioned in the capital policy that was presented in the early part of the year in the business earnings report, we will manage the CET1 ratio at a 13.5% level and continue group wide efforts to improve capital adequacy, so that shareholder return visibility can be enhanced.

正如我們在年初業績報告中提出的資本政策中提到的，我們將把CET1比率控制在13.5%的水平，並繼續在集團範圍內努力提高資本充足率，使股東回報的可見性可以得到增強。

The next pages are detailed material related to shareholder value related indicators and management performance. So please refer to it if needed.

接下來的幾頁是與股東價值相關指標和管理績效相關的詳細資料。所以有需要的可以參考一下。

With this, I will conclude KBFG first half business results presentation. Thank you for listening.

至此，KBFG 上半年業績報告就結束了。感謝您的聆聽。

Statements in English on this transcript were spoken by an interpreter present on the live call. The interpreter was provided by the company sponsoring this event.

本筆錄中的英語陳述是由現場通話中的口譯員說出的。口譯員由贊助本次活動的公司提供。