KB Financial Group Inc (KB) 2024 Q3 法說會逐字稿

Greetings. I'm Peter Kwon, the Head of IR at KBFG. We will now begin the 2024 Q3 business results presentation, and thank you very much for participating in today's earnings release. We have here with us, Group CFO and SEVP, Jae Kwan Kim, as well as executives from our group.

問候。我是 KBFG 的 IR 主管 Peter Kwon。我們現在將開始 2024 年第三季業績發表會，非常感謝您參與今天的財報發布。與我們在一起的還有集團財務長兼高級副總裁 Jae Kwan Kim 以及我們集團的高階主管。

Regarding today's agenda, first there will be a video of our Group CEO and Chairman, Jong Hee Yang, explaining our company's value-up plan, which was disclosed today; and then our group CFO will cover 2024 Q3 major earnings results. After that, we will have a Q&A session. We will now watch a video covering KB Financial Group Sustainable Value-up Plan.

關於今天的議程，首先將有一段由我們集團執行長兼董事長 Jong Hee Yang 解釋我們今天披露的公司價值提升計劃的影片；然後我們集團財務長將介紹 2024 年第三季的主要獲利結果。之後，我們將進行問答環節。我們現在將觀看一段有關 KB 金融集團可持續增值計劃的影片。

Greetings, I am Jong Hee Yang, Chairman and CEO of KB Financial Group. I will briefly cover KBFG's sustainable value-up plan to our shareholders and investors in and out of Korea who support and love KB. KB has the significant responsibility of both utilizing the capital that our shareholders have invested to maximize profitability to continuously achieve high profits and at the same time, maintain asset quality as a financial company, which plays a pivotal role in supporting the nation's economy.

大家好，我是 KB 金融集團董事長兼執行長 Jong Hee Yang。我將向支持和喜愛KBFG的股東和國內外投資者簡要介紹KBFG的可持續增值計劃。KB作為一家金融公司，肩負著既利用股東投資的資本實現盈利最大化，持續實現高利潤，又保持資產品質的重大責任，在支持國家經濟中發揮著舉足輕重的作用。

During the past 10 years, KB, by strengthening fundamentals through painstaking efforts, diversified our portfolio. In addition, we firmly established our position as a leading financial group representing Korea in terms of earnings, shareholder return, and ESG.

10年來，KB苦心夯實基礎，多元化投資。此外，我們在獲利、股東回報和ESG方面牢固確立了代表韓國領先金融集團的地位。

As a result, our capital profitability and asset quality has grown to the point where it stands shoulder to shoulder with leading global companies. And our value per share also has considerably improved. In addition, through continued shareholder return efforts, 2023 total shareholder return ratio grew to 37.7%.

我們的資本獲利能力和資產品質已達到與全球領先企業並駕齊驅的水平。我們的每股價值也大幅提升。此外，透過持續的股東回報努力，2023年股東總回報率成長至37.7%。

However, shareholder return is still being pointed out as the biggest reason KB's corporate value is being undervalued. And we have the task of increasing the level of our shareholder return for our company's value to be properly assessed. While preparing for this value-up disclosure, what we believe was the most important shareholder return philosophy was, first, sustainability, and second, predictability.

然而，股東回報仍被指出是KB企業價值被低估的最大原因。我們的任務是提高股東回報水平，以便正確評估我們公司的價值。在準備此價值提升揭露時，我們認為最重要的股東回報理念首先是永續性，其次是可預測性。

What we most painstakingly thought about long and hard about was how to catch three rabbits which were to continuously improve company's profitability and also enhance shareholder value and in addition, maintain our corporate asset quality.

我們最苦思的就是如何抓住三隻兔子，不斷提高公司獲利能力，提升股東價值，同時維持公司資產品質。

Going forward, KB will link shareholder returns to CET1 ratio and return surplus capital excluding some management buffer to our shareholders. For example, if 2024 year-end CET1 ratio posted 13.5%, then 50 bp of capital, which exceeded 13% will be a source for next year's dividends and first half share buyback and cancellation.

展望未來，KB 將把股東回報與 CET1 比率掛鉤，並將不包括部分管理緩衝的剩餘資本返還給股東。例如，如果2024年末CET1比率為13.5%，那麼超過13%的50個基點的資本將成為明年股利和上半年股票回購和註銷的來源。

On the other hand, with the profits that are accumulated throughout the year, we will maintain CET1 ratio of mid-13% and utilize the amount, which exceeds 13.5% in the second half for additional share buyback and cancellation. The higher KB CET1 ratio is, the more shareholder returns our shareholders can expect for the next year. In addition, you can predict the amount of shareholder return with the CET1 ratio as well. Like global leading companies, such as JPMorgan, CET1 ratio and shareholder returns will give more amount back to shareholders.

另一方面，憑藉全年累積的利潤，我們將維持13%中期的CET1比例，並將下半年超過13.5%的金額用於額外的股份回購和註銷。KB CET1 比率越高，股東明年預期的股東回報越高。此外，您還可以透過CET1比率來預測股東回報金額。與摩根大通等全球領導企業一樣，CET1比率和股東回報將為股東帶來更多的回報。

The higher the CET1 ratio is without limitations on total shareholder return ratio. To this end, KB Financial Group will strengthen our fundamentals, keeping in step with the new value of paradigm which pursues qualitative growth that goes beyond quantitative growth. We are organizing our business management system, so that we can continue our RWA-focused growth efforts, so that we can strengthen our fundamental earnings generation capabilities.

CET1比率越高，股東總回報率不受限制。為此，KB金融集團將緊跟著追求超越量成長的品質成長的新典範價值，強化基礎。我們正在組織我們的業務管理系統，以便我們能夠繼續以 RWA 為重點的成長努力，從而增強我們的基本創收能力。

From right away, we will begin from our business plans for 2025, that asset growth goals that will be fit our value-up paradigm and redesign key performance indicators. That is to say that all of our group members will move according to the program.

從現在開始，我們將從 2025 年的業務計畫開始，該資產成長目標將符合我們的價值提升範式，並重新設計關鍵績效指標。就是說我們所有的組員都按照程序去行動。

Based on these changes, KB's shareholder returns will meet the industry going forward, and our total shareholder return ratio will also maintain the industry's highest position. KB, even before implementing our value-up program, was genuinely committed to shareholder value enhancements, including being the first in the industry to implement share buyback and cancellation and adopting quarterly even dividends on a total annual amount basis.

基於這些變化，KB的股東回報將符合產業未來的發展，我們的股東總回報率也將維持業界最高的位置。KB在實施我們的增值計劃之前，就真誠地致力於股東價值的提升，包括在行業中率先實施股票回購和註銷，以及在年度總額的基礎上採用季度均勻股息。

We included in this disclosure, which was presented today, the results of our deep thoughts about how to satisfy our shareholders and interested parties. Due to time constraints, I cannot explain all details, but we promise you that we will continuously improve our corporate governance structure, internal control, ESG, and communication with shareholders.

我們在今天提交的這份揭露中包含了我們對如何滿足股東和利害關係人的深入思考的結果。由於時間有限，我無法解釋所有細節，但我們向您保證，我們將持續改善我們的公司治理結構、內部控制、ESG以及與股東的溝通。

In KB's sustainable journey to catch the three rabbits of profitability, asset quality and shareholder returns, all members of KB, including myself, will strive forward with one heart and one mind. Thank you for listening.

在KB抓盈利能力、資產品質、股東回報三隻兔子的可持續旅程中，包括我自己在內的KB全體成員將一心一意地奮力前進。感謝您的聆聽。

Good afternoon. I am Kim Jae Kwan, CFO of KB Financial Group. Thank you very much for joining our third quarter 2024 earnings presentation. Before going to Q3 earnings, I will first run through the resolution made by the BOD today regarding the third quarter shareholder return. We're on page 4.

午安.我是 KB 金融集團財務長 Kim Jae Kwan。非常感謝您參加我們的 2024 年第三季財報展示。在討論第三季財報之前，我先回顧一下今天董事會就第三季股東回報所做的決議。我們在第 4 頁。

Based on industry's top capital strength and earnings capacity, KBFG is committed to a shareholder return policy with a view towards driving shareholder and corporate value enhancement. To pay out equal amount of dividend every quarter, we've done share buyback and cancellation driving quarterly DPS uptrend.

基於產業頂尖的資本實力和獲利能力，KBFG致力於股東回報政策，以推動股東和企業價值的提升。為了每季支付等額股息，我們進行了股票回購和取消，推動了季度股息的上升趨勢。

As you can see from the value-up plan disclosed today, we will continue to enhance shareholder value underpinned by RoRWA-centric business management and through CET1-linked shareholder return policy. CET1 ratio, which is common equity tier 1, is used for determining shareholder return and is expected to be 25 basis points increased Q-over-Q to 13.85% as of end of September.

從今天揭露的加值計畫可以看出，我們將繼續以RoRWA為中心的經營管理，透過與CET1掛鉤的股東回報政策，持續提升股東價值。CET1 比率是一級普通股，用於確定股東回報，預計截至 9 月底將比上一季增加 25 個基點，達到 13.85%。

In Q, possibly due to FX rate movement, share buyback and seasonality weighing down on profit, CET1 ratio may slightly dip, but we plan to keep it robust at above 13.5% during the year. And today, the BOD approved quarterly cash dividend of KRW795 per share and additional share buyback and cancellation of KRW100 billion.

Q 季度，可能由於匯率變動、股票回購和季節性因素影響利潤，CET1 比率可能略有下降，但我們計劃在年內將其保持在 13.5% 以上的強勁水平。今天，董事會批准了每股 795 韓元的季度現金股息以及 1,000 億韓元的額外股票回購和取消。

DPS, therefore, is KRW795, marginally up Q over-Q following the impact from KRW400 billion of share buyback, which was announced during the first half of the year. And with KRW100 billion of additional buyback and cancellation, our plan is to buy back and retire a total of KRW820 billion this year, which represents industry's biggest buyback and cancellation yet again, a testament to the strong will of the BOD and the management placing foremost priority upon shareholder and corporate value enhancement.

傷害輸出，因此，受上半年宣布的 4,000 億韓元股票回購的影響，股價為 795 韓元，環比小幅上漲。加上1000億韓元的額外回購和註銷，我們的計劃是今年回購和註銷總額為8200億韓元，這再次是業界最大的回購和註銷，證明了董事會和管理層的堅定意志。股東和企業價值的提升。

Two keywords that characterize KB Financial Group's value-up plan are sustainability and predictability of shareholder return. Guided by such sustainability and predictability, we will endeavor to sustain shareholder return at industry's top-notch level in alignment with the new value-up program. Now moving on to KBFG's earnings results for Q3 2024.

KB Financial Group 增值計畫的兩個關鍵字是股東回報的可持續性和可預測性。在這種可持續性和可預測性的指導下，我們將努力根據新的增值計劃將股東回報維持在行業級水平。現在讓我們來看看 KBFG 2024 年第三季的獲利結果。

I will begin with group's performance highlights and key business metrics on cumulative basis ending Q3 '24. The group's Q3 2024 cumulative net profit was KRW4.3953 trillion, up 0.4% year over year. This is thanks to good performance across non-bank subsidiaries, including securities, insurance and credit card businesses despite continuing headwinds from rate cuts and sluggish economy.

我將從截至 24 年第三季的累積業績亮點和關鍵業務指標開始。該集團2024年第三季累計淨利為4.3953兆韓元，年增0.4%。這得歸功於證券、保險和信用卡等非銀行子公司儘管面臨降息和經濟低迷的持續阻力，但仍取得了良好的業績。

On the other hand, net profit in Q3 reported KRW1.614 trillion, down on a Q-over-Q basis. This is mainly due to the base effect of sizable provisioning last quarter for ELS compensation and save for this impact. On a normalized basis, net profit was flat Q-over-Q.

另一方面，第三季淨利為1.614兆韓元，季減。這主要是由於上季度為 ELS 補償撥備的大量撥備的基數效應以及除此影響之外的其他影響。在標準化基礎上，淨利潤環比持平。

Next, group's cumulative credit cost in Q3 recorded an improvement of 11 basis points year over year, coming in at 0.41%. Despite ensuing macro uncertainties, we have ample amount of buffer following pre-emptive provisioning, and we expect to be able to maintain a robust control over credit cost going forward as well.

其次，集團第三季​​累計信貸成本較去年同期改善11個基點，為0.41%。儘管宏觀不確定性隨之而來，但我們在預先撥備後仍擁有充足的緩衝，並且我們預計未來也能夠保持對信貸成本的穩健控制。

As mentioned, as of September end 2024, group CET1 ratio reported 13.85%, maintaining industry's top level of capital buffer on the back of solid profit generation and strategic capital management. This, in turn, has been the basis of KRW100 billion of additional share buyback and cancellation enabling KBFG to continue on with differentiated shareholder return policy supported by capital strength.

如前所述，截至 2024 年 9 月底，集團 CET1 比率為 13.85%，在穩健的利潤產生和策略資本管理的支持下，維持行業最高水準的資本緩衝。這也成為KBFG追加1000億韓元股票回購和註銷的基礎，使KBFG能夠繼續以資本實力為支撐，實施差異化的股東回報政策。

With that said, I will now move on to detailed breakdown of the company's third quarter results. Group's net interest income in Q3 was KRW3.165 trillion, down 1.3% Q-over-Q on the back of interest rate cuts and which drove down yield from loan assets.

話雖如此，我現在將詳細介紹該公司第三季業績。受降息影響，貸款資產收益率下降，集團第三季​​淨利息收入為3.165兆韓元，季減1.3%。

Q3 net fees and commission income was KRW942.7 billion on the back of increases in the bank's bancassurance and securities investment banking fee driving 2.5% Q-over-Q increase. Next is other operating profit. In Q3, other operating profit reported KRW398.7 billion, up 23.4% Q-over-Q, driven by fall in market rate and FX rate, which drove significant expansion in returns from securities and derivatives.

第三季手續費及佣金淨收入為 9,427 億韓元，主要得益於銀行保險和證券投資銀行業務費用的增加，帶動環比增長 2.5%。接下來是其他營業利益。第三季度，其他營業利潤為 3,987 億韓元，季增 23.4%，主要受到市場利率和匯率下降的推動，帶動證券和衍生性商品回報大幅成長。

Next is on G&A expense. While Q3 G&A expense came in at KRW1.6508 trillion, which is an increase of 3.6% Q-over-Q, Group CIR in Q3 on a cumulative basis reported 36.5%, keeping to below 40% level, thanks to a solid top line growth and sustained effort behind cost efficiency gains. Next is on group's PCL.

接下來是一般行政費用。雖然第三季的管理費用為 1.6508 兆韓元，季增 3.6%，但得益於穩健的營收，第三季集團累計 CIR 為 36.5%，維持在 40% 以下的水平成本效率提升背後的成長和持續努力。接下來是集團的 PCL。

Third quarter PCL was KRW498.1 billion, down 9.9% Q over-Q, mainly due to lessened burden for provisioning at non-bank subsidiaries, including KB card, savings bank and real estate trust. Lastly, non-operating profit in Q3 recorded a decline of KRW140 billion Q-over-Q on the back of base effect of last quarter's sizable provisioning for ELS compensation cost.

第三季PCL為4,981億韓元，季減9.9%，主要是因為KB卡、儲蓄銀行和房地產信託等非銀行子公司的撥備負擔減輕。最後，由於上季大量的 ELS 補償成本撥備的基數效應，第三季營業外利潤較上季下降了 1,400 億韓元。

On the next page, I will explain key financial indicators. First, profitability indicators. Q3 '24 cumulative group ROE was 11.26% coming in and above the target ROE of 10%. In the face of upcoming rate cut cycle, we will also continue to place effort behind diversifying the revenue source and improving cost efficiency. Looking at now the growth of loans in won, bank's total loan in won as of September end '24 was KRW362 trillion, up 2.9% versus June and 5.9% year to date.

在下一頁，我將解釋關鍵財務指標。一是獲利指標。24 年第 3 季累計集團 ROE 為 11.26%，達到並高於 10% 的目標 ROE。面對即將到來的降息週期，我們也將持續努力實現收入來源多元化、提高成本效率。現在來看看韓元貸款的成長情況，截至 24 年 9 月底，銀行韓元貸款總額為 362 兆韓元，比 6 月增加 2.9%，今年迄今成長 5.9%。

Household loan was KRW176 trillion, on rise in demand following recent increases in the transaction volume, which drove 2.7% increase or KRW4.6 trillion versus end of June. Corporate loan reported KRW186 trillion, as loans to large corporates continued following the second quarter trend on top of which SME loans also up trended, driving 3.2% rise compared to end of June.

由於最近交易量增加，需求增加，家庭貸款為 1,76 兆韓元，較 6 月底增長 2.7%，即 4.6 兆韓元。企業貸款報告為 1,86 兆韓元，大型企業貸款延續第二季的趨勢，中小企業貸款也呈現上升趨勢，較 6 月底成長 3.2%。

Next is on NIM. Group and bank's NIM in Q3 was 1.95% and 1.71%, down 13 basis points, respectively, Q-over-Q. Now this is because market rate has priced in expectations of base rate cut. And as repricing of deposit lags, loan repricing, we saw spread contraction and lower yield on loan assets.

接下來是 NIM。第三季集團和銀行的淨利差分別為1.95%和1.71%，季減13個基點。現在這是因為市場利率已經反映了基本利率下調的預期。由於存款重新定價和貸款重新定價滯後，我們看到利差收縮和貸款資產收益率下降。

However, downward pressures on NIM, including steep rise in mortgage lending and base rate cuts being priced in, have been mostly captured during Q3. And we, therefore, expect as repricing of deposit follows the lending rate, there will be offsetting of NIM erosion.

然而，淨利差的下行壓力，包括抵押貸款急劇增加和定價中的基本利率下調，已在第三季大部分得到體現。因此，我們預計，隨著存款的重新定價遵循貸款利率，淨利差的侵蝕將會被抵銷。

Also, loan growth has slowed since September as government had stringent control on household lending, and we expect to maintain Q4 bank NIM at a steady level on the back of recovery in margin. Rather than focusing on growing the loan book, we plan to focus on quality-driven growth with adequate margin under a right balance between growth and profit, so as to broaden sustainable basis for interest income generation. Let's go to the next page.

此外，由於政府嚴格控製家庭貸款，貸款成長自 9 月以來已放緩，我們預計在利潤率回升的背景下，第四季度銀行淨利差將維持在穩定水平。我們不注重增加貸款規模，而是注重品質驅動的成長，確保成長與利潤的合理平衡，並確保足夠的利潤率，從而拓寬可持續的利息收入基礎。讓我們進入下一頁。

I will cover the group's cost income ratio, or CIR. As you can see on the graph on the top left-hand side, 2024 Q3 cumulative group CIR posted 36.5% and through solid earnings growth and group-wide cost control efforts, it is maintaining a stable level.

我將介紹集團的成本收入比（CIR）。如左上圖所示，2024 年第三季集團累計 CIR 為 36.5%，透過穩健的獲利成長和集團範圍內的成本控制努力，它保持著穩定的水平。

Next is credit cost ratio. Credit cost, Q3 cumulative group credit cost posted a 41 bp level and with the real estate PF market stabilization, some reversal took place and thus, group's CCR is being stably managed. Last is group's capital adequacy. Despite the risk-weighted asset growth effect with the loan growth in the quarter, on the back of group's proactive capital management efforts and sound net interest growth, we have secured the highest level of capital adequacy in the industry.

其次是信貸成本比率。在信貸成本方面，第三季累計集團信貸成本達到41個基點水平，隨著房地產PF市場的穩定，出現了一些逆轉，因此集團的CCR得到穩定管理。最後是集團的資本適足率。儘管本季度貸款成長帶來了風險加權資產成長效應，但在集團積極的資本管理努力和良好的淨利息成長的支持下，我們的資本充足率保持在行業最高水平。

In September, base BIS ratio and CET1 ratio is expected to post 16.75% and 13.85%, respectively. As I covered in the shareholder return slide, we will continue to work to improve capital efficiency to improve shareholder return visibility by managing the CET ratio to more than 13.5% throughout the year. KB Financial Group is striving and making diverse efforts to strengthen communication with and provide investment information access to not only institutional investors but also to individual investors.

9月份，基礎BIS比率和CET1比率預計分別為16.75%和13.85%。正如我在股東回報幻燈片中所介紹的，我們將繼續努力提高資本效率，透過全年將 CET 比率控制在 13.5% 以上來提高股東回報的可見度。KB金融集團不僅努力加強與機構投資者的溝通，也為個人投資者提供投資資訊。

As a beginning, we will newly put up a value-up bulletin board on our website to provide diverse investment-related information, including for our value-up program. From the next earnings release, we plan to provide time to receive questions beforehand from individual investors and to answer them. Please refer to the next pages for details related to the business presentation that I have covered so far. With this, I will conclude KB Financial Group's 2024 Q3 business results presentation. Thank you for listening.

首先，我們將在我們的網站上新設立一個增值公告板，以提供各種投資相關信息，包括我們的增值計劃。從下一次財報發布開始，我們計劃提供時間提前接受個人投資者的提問並予以解答。請參閱下一頁，以了解與我到目前為止所介紹的業務簡報相關的詳細資訊。KB Financial Group 2024年第三季經營業績介紹到此結束。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。