KB Financial Group Inc (KB) 2024 Q4 法說會逐字稿

Greetings. I am Peter Kwon, Head of KBFG IR. We will now begin the 2024 full-year business presentation. Thank you very much for participating in today's earnings release.

問候。我是 KBFG IR 主管 Peter Kwon。我們現在開始2024年全年業務介紹。非常感謝您參加今天的收益發表會。

At today's earnings release, we have here with us executives from the group, including Managing Director and CFO, Sang Rok Nah. First, our Group CFO will cover 2024 major earnings results. And after that, we will engage in a Q&A session.

在今天的收益發布會上，我們邀請到了集團的高階主管，包括董事總經理兼財務長 Sang Rok Nah。首先，我們的集團財務長將介紹2024年的主要獲利結果。之後，我們將進行問答環節。

Please note that from this presentation after our real-time Q&A session, we have set aside additional time for the management team to answer questions that were previously submitted by our shareholders to our website.

請注意，從本次演示的即時問答環節開始，我們為管理團隊留出了額外的時間來回答股東先前在我們網站上提交的問題。

I will now invite our group CFO to walk us through 2024 full-year business results.

現在，我將邀請我們集團的財務長向我們介紹 2024 年全年業務業績。

Good afternoon. I am Nah Sang Rok, CFO of KB Financial Group. Thank you all for joining KBFG's earnings presentation for FY 2024.

午安.我是 KB 金融集團財務長 Nah Sang Rok。感謝大家參加 KBFG 2024 財年財報。

Before going into earnings results, I will first run through business highlights. As concerns over household debt and the real estate persisted in 2024, recent financial market volatilities expand on the back of major countries' monetary policy stance, the US presidential election, and surge in the FX rate.

在介紹獲利結果之前，我將先介紹一下業務亮點。2024年，由於家庭債務和房地產的擔憂持續存在，近期金融市場的波動因主要國家貨幣政策立場、美國總統大選以及外匯匯率飆升而擴大。

For banking, in particular, rate cut cycle eroded profitability and there were rising concerns on asset quality due to a slump in real economy and ELS related compensation booked at the start of the year exerted a downward pressure on bottom line. Despite all this, net profit for the year reported more than KRW5 trillion, sustaining a solid profit uptrend for the group.

尤其對銀行業而言，降息週期侵蝕了獲利能力，且由於實體經濟衰退導致資產品質擔憂加劇，而年初提列的ELS相關薪酬對獲利造成了下行壓力。儘管如此，全年淨利潤仍超過5兆韓元，維持了集團穩健的利潤上升趨勢。

These results are meaningful and that despite a structural difficulty of profitability declines, concerns on soundness, and heightened economic uncertainties, our fundamentals have proven solid on the back of business portfolio diversification efforts that we've placed over the years.

這些結果是有意義的，儘管存在盈利能力下降、對穩健性的擔憂以及經濟不確定性加劇的結構性困難，但在我們多年來致力於業務組合多元化的努力下，我們的基本面仍然穩固。

Also, 2024 can be regarded as the inaugural year of value-up as we placed emphasis on sustainability and predictability based on which we announced sustainable value-up plan last October embodying KB's philosophy, which was met with positive market reaction.

此外，2024 年可被視為價值提升的元年，因為我們強調永續性和可預測性，在此基礎上，我們去年 10 月宣布了體現 KB 理念的可持續價值提升計劃，並得到了市場的積極反應。

We were the first to implement share buyback and cancellation in the sector and introduced equal quarterly dividend distribution based on total payout, which shows KBFG is leading market in shareholder return and has continued to develop such policies, thereby laying a fertile ground. Underpinned by this foundation, I would like to emphasize yet again that we will implement KB's value-up plan firmly with no interruptions.

我們在該行業率先實施股票回購和註銷，並引入基於總派息的平等季度股息分配，這表明 KBFG 在股東回報方面處於市場領先地位，並不斷發展此類政策，從而奠定了肥沃的基礎。在此基礎上，我想再次強調，我們將堅定不移地實施 KB 的增值計劃，不會間斷。

From next page onwards, I will walk through KBFG's performance highlights for 2024. Firstly, KBFG's FY24 net profit was KRW5,078.2 billion, driven by balanced top-line expansion across all domains, reporting 10.5% year-over-year increase.

從下一頁開始，我將介紹 KBFG 2024 年的業績亮點。首先，KBFG 24財年淨利為50,782億韓元，得益於各領域均衡的營收擴張，較去年同期成長10.5%。

If you look at pre-provisioning operating profit for '24, it came in at KRW10,089.6 billion, up 5.9% year over year. And compared to FY21, nearly three years back, this is around 38.5% expansion attesting to solid earnings capacity of the group. Also, ROE for 2024 recorded 9.72%, improving 0.59 percentage points year over year, while EPS was KRW12,881, up 12.2% year over year.

如果看一下24年的撥備前營業利潤，它達到了10,0896億韓元，年增5.9％。與近三年前的 FY21 相比，這一增長幅度約為 38.5%，證明了該集團強勁的獲利能力。此外，2024 年的 ROE 為 9.72%，比去年同期增加 0.59 個百分點，EPS 為 12,881 韓元，比去年同期成長 12.2%。

Meanwhile, due to sizable one-off expense, including ERP cost and decline in gains from securities, derivatives, and FX following rise in FX rate and equity price falls as well as contractions in insurance earnings impacted by seasonality, net profit for Q4 recorded a QoQ decline by a large margin.

同時，由於ERP成本等一次性費用較大，以及匯率上升和股價下跌導致證券、衍生品及外匯收益下降，以及保險收入受到季節性影響而收縮，導致第四季度淨利潤環比下降幅度較大。

Next, we expect KBFG CET1 ratio as of December end '24 to be 13.51%. Although CET1 ratio dipped somewhat Q on Q on the back of profit contraction in Q4 following FX fluctuation and slow seasonality, we were able to maintain stable asset growth whilst still maintaining a mid-13% level, which is industry's top tier.

接下來，我們預計截至 24 年 12 月底 KBFG CET1 比率為 13.51%。儘管受外匯波動和季節性因素影響，第四季度利潤收縮，CET1比率環比有所下降，但我們仍能保持穩定的資產增長，同時仍維持在13%左右的中等水平，屬於行業頂級水平。

I will elaborate on CET1 on the following pages. Let me also talk about resolution on shareholder return made by the Board of Directors today. KBFG's BOD today decided on a total of KRW300 billion cash payout with DPS of KRW804.

我將在下面的內容中詳細闡述 CET1。我還想講一下今天董事會關於股東回報的決議。KBFG 董事會今天決定總計派發現金 3,000 億韓元，每股派息 8,041 億韓元。

DPS, including the paid dividend in 2024 amount to KRW3,174, which is an increase of around 3.7% year over year. Do note that total yearly dividend payout of KRW1.2 trillion and KRW820 billion of share buyback and cancellation during the year will amount to TSR of 39.8% for FY24. The BOD today also resolved on KRW520 billion of share buyback and cancellation as well.

包括2024年支付的股息在內的每股股息為3,174韓元，較去年同期成長約3.7%。請注意，全年股息總額為 1.2 兆韓元，年內股票回購和註銷為 8,200 億韓元，將使 24 財年的股東總回報達到 39.8%。董事會今天也決定回購和註銷 5,200 億韓元的股票。

In accordance with our Value-Up framework that aligns TSR to CET1 ratio based on year-end CET1 ratio of 13.51%. Capital in excess of 13%, which equals approximately KRW1.76 trillion was used as resources for cash payout for '25 and first half share buyback and cancellation.

根據我們的 Value-Up 框架，該框架以年末 13.51% 的 CET1 比率為基礎，將 TSR 與 CET1 比率一致。超過13%的資本，即約1.76兆韓元，被用作2025年及上半年股票回購和註銷的現金支付資源。

For your information, we are looking at a slight year-on-year increase in total cash payout in 2025 by around KRW40 billion, but nothing has yet been confirmed. Once the BOD decision is reached, we will make appropriate disclosure in due time.

供您參考，我們預計 2025 年現金支出總額將年比小幅增加約 400 億韓元，但尚未得到證實。一旦董事會做出決議，我們將及時做出適當揭露。

Next, moving on to breakdown and details of the earnings results. In Q4, in accordance with supervisors' interpretation and accounting rules, insurance subsidiaries, including KB Insurance and KB Life applied changed accounting rules in relation to experience variance and expiring contract and Q4 '22 and Q4 '23 earnings have been restated retrospectively for your reference. The main lever behind group's top-line performance in '24 was bigger and sustained profit contribution from nonbank portfolio, defining solid earnings enhancement of the group.

接下來，我們來看看獲利結果的細目和細節。第四季度，根據監管機構的解釋和會計規則，包括 KB Insurance 和 KB Life 在內的保險子公司應用了與經驗差異和到期合約相關的會計規則變更，並對 22 年第四季度和 23 年第四季度的收益進行了追溯重述，供您參考。2024年該集團營收表現的主要動力是來自非銀行投資組合更大且持續的利潤貢獻，這決定了集團盈利的穩健提升。

Firstly, in 2024, group NIM was KRW12,826.7 billion, up 5.3% year over year. Despite NIM moving downwards on the back of rate cut expectations, loan demand rose, expanding the bank's average loan balance, while interest income contribution from non-bank subsidiaries from credit cards and insurance continued to rise.

首先，2024年集團淨利差為128,267億韓元，較去年同期成長5.3%。儘管受降息預期推動，淨利差有所下降，但貸款需求上升，擴大了銀行的平均貸款餘額，同時來自信用卡和保險等非銀子公司的利息收入貢獻繼續上升。

Group's net fee and commission income in FY24 reported KRW3,849.6 billion, up 4.8% year over year or around KRW176.1 billion. Now this is despite suspension of ELS sales and depressed real estate PF market, which pushed down the bank and real estate trust fee income. Rather on the back of increase in credit card merchant fees and cost efficiency gains, credit card fee income posted a whopping KRW99.7 billion increase year on year.

24財年，集團淨費用及佣金收入為3.8496兆韓元，較去年同期成長4.8%或約1,761億韓元。儘管 ELS 銷售暫停且房地產 PF 市場低迷，導致銀行和房地產信託費用收入下降，但情況仍然如此。相反，由於信用卡商家費用增加和成本效率提高，信用卡費用收入比去年同期大幅增加了997億韓元。

Also with higher securities business net fee income from investment banking and steady lease fee income at the KB Capital, enhanced fee income across nonbank subsidiaries were key levers. Worth noting is fourth quarter net fee and commission income at KRW997.2 billion despite a decline in merchant fees following shortened acquiring cycle and decline in stock trading volume and other market headwinds, securities made bigger contribution through acquisition financing, IPO, real estate PF, and other IB's fees, driving 5.8% growth Q over Q.

此外，由於投資銀行證券業務淨費用收入增加和 KB Capital 租賃費用收入穩定，非銀行子公司費用收入的提高成為關鍵槓桿。值得注意的是，第四季淨費用及佣金收入為9,972億韓元，儘管由於收購週期縮短、股票交易量下降等市場不利因素導致商家費用下降，但證券透過收購融資、IPO、房地產PF和其他IB費用做出了更大的貢獻，帶動環比增長5.8%。

Next, 2024 other operating income posted KRW351.9 billion. And with the fading of the base effect from the previous year's bank social contribution program costs, it increased 8.5% YoY. However, Q4 other operating income due to significant decrease in performance related to securities derivative products, FX caused by the rise of FX rates and the narrowing bond yield decline as well as seasonal factors, including cold waves and heavy snow led to a reduction of insurance-related income and recorded muted performance.

其次，2024年其他營業收入為3,519億韓元。且隨著上年銀行社會貢獻計畫成本基數效應的消退，較去年同期成長8.5%。但是，第四季度其他營業收入由於證券衍生產品相關業績大幅下降、外匯匯率上升及債券收益率降幅收窄導致的外匯收入減少以及寒潮、大雪等季節性因素導致保險相關收入減少，業績表現平淡。

Next, I will cover SG&A. 2024 SG&A posted KRW6,938.6 billion. And despite the increase in related costs, including ERP expansion and increasing depreciation and admin cost of subsidiaries, thanks to ERP implemented over the past several years led to the reflection of the accumulated labor cost reduction effect and is being stably managed.

接下來我將介紹銷售、一般及行政費用 (SG&A)。2024年銷售、一般及行政開支為6,9386億韓元。而且，雖然ERP擴充、子公司折舊及管理費增加等相關成本增加，但由於過去幾年導入ERP，累積的人力成本削減效果已反映出來，得以穩定管理。

In addition, 2024 group CIR posted 40.7%. And on the back of solid top-line growth based on core profit and efforts to improve HR structure and manage costs, it declined 0.4 percentage points YoY and is showing market improvement trend in our group's cost efficiency.

此外，2024 集團 CIR 為 40.7%。而基於核心利潤的穩健營收成長，以及改善人力資源結構和管理成本的努力，推動集團成本效率年減0.4個百分點，顯示出市場改善趨勢。

Going forward, KBFG plans to strengthen cost efficiency improvement efforts. And in particular, in the case of capital budget, we plan to refrain from big bang method large amount injections and through diversified investments in line with market trends, we will minimize this effect. Also in the case of recurring costs, we will minimize fixed cost expenditures in order to improve the rigid cost structure.

展望未來，KBFG 計劃加強成本效率改善工作。特別是在資本預算方面，我們計劃避免採用「大爆炸」式的大量注入，而是透過順應市場趨勢的多元化投資，將其影響降至最低。同樣，在經常性成本的情況下，我們將盡量減少固定成本支出，以改善剛性成本結構。

Lastly is group provisioning for credit losses. 2024 group provisioning for credit losses posted KRW2,044.3 billion and decreased greatly YoY by KRW1,102.1 billion. This was attributable to the effect from preemptive additional provisioning late last year, preparing for potential real estate PF and other risks as well as the effect from reversal of about KRW263 billion yearly provisioning stemming from the bank's valuation re-rating.

最後是集團信用損失準備金。 2024年集團信貸損失準備金為20,443億韓元，年比大幅減少11,021億韓元。這是由於去年年末為應對潛在的房地產風險和其他風險而預先提取的額外撥備的影響，以及由於該銀行估值重新評估而逆轉每年約2,630億韓元的撥備的影響。

In addition, 2024 group credit cost posted 43 bps and improved 24 bps YoY and some reversals took place at selectively normalized PF sites and is being stably managed within the expected range.

此外，2024 年集團信貸成本上漲 43 個基點，較去年同期改善 24 個基點，選擇性正常化的 PF 站點出現了一些逆轉，並穩定在預期範圍內。

On the other hand, Q4 provisioning for credit losses posted KRW565.1 billion and increased 13.5% QoQ. and this was caused by the conservative provisioning stance of all subsidiaries preparing for potential economic condition worsening despite the bank's sizable provisioning reversals.

另一方面，第四季信貸損失準備金為5,651億韓元，季增13.5%。這是因為，儘管該行大幅撤回了撥備，但所有子公司都採取了保守的撥備立場，為可能出現的經濟狀況惡化做準備。

Going into detail, according to the asset quality rating adjustment of the bank, around KRW68 billion was provisioned against overseas CRE exposure. And in the case of securities, around KRW58 billion was provisioned against real estate PF and overseas acquisition financing and leasing subsidiaries, including card and capital, have provisioned an appropriate amount, reflecting the recent asset quality ratio trend under a conservative management approach.

具體來說，根據該銀行的資產品質評級調整，針對海外商業房地產風險的撥備約為680億韓元。而證券方面，針對房地產PF提列了約580億韓元的撥備，卡片、資本等海外收購融資及租賃子公司也提列了適當的撥備，反映了在保守的管理方式下近期資產品質比率的趨勢。

From page 9, I will cover major financial indicators. First, group's profitability indicators. As aforementioned, KB Financial Group's 2024 ROE posted 9.72% and improved 0.59 percentage points YoY. ROE on a recurring basis, excluding one-offs, stands at 10.76% level. And in particular, as you can see on the right graph, this was a result of the business diversification efforts made during the past years and was possible since we secured an optimal business portfolio, including 40% non-banking contribution.

從第 9 頁開始，我將介紹主要的財務指標。一是集團獲利指標。如前所述，KB金融集團的2024年ROE為9.72％，年增0.59個百分點。扣除一次性費用後的經常性 ROE 為 10.76%。具體來說，正如您在右圖中所看到的，這是過去幾年業務多元化努力的結果，並且是因為我們獲得了最佳業務組合，其中包括 40% 的非銀行貢獻。

Going forward, KBFG responding to the low growth interest rate decline regime will strengthen efforts for each business. and on the other hand, continue RORWA focused qualitative growth efforts.

今後，KBFG將加強各項業務的因應力度，因應低成長利率下降體制。另一方面，繼續以RORWA為重點推動品質成長工作。

Let's go to the next page. Next, I will cover bank's loans in won growth. At 2024 end, bank loans in won posted KRW364 trillion and increased 6.4% YTD and 0.5% compared to late September. In case of household loans, following key interest rate cuts and real estate market transaction volume increase -- saw increase in home mortgage loans and credit loans centering on actual homebuyers and rose significantly by 6.2% YTD. Corporate loans as a result of solid growth rates centering on high-quality SME and SOHO loans led to a 6.6% increase YTD.

我們進入下一頁。接下來我將介紹銀行韓元貸款的成長情況。截至 2024 年底，韓元銀行貸款總額為 364 兆韓元，年初至今成長 6.4%，較 9 月底成長 0.5%。居民貸款方面，受基準利率下調及房地產市場交易量增加影響，以實際購屋者為中心的房屋抵押貸款和信用貸款大幅增加，年初至今成長6.2%。由於以優質中小企業和 SOHO 貸款為中心的穩健成長率，企業貸款年初至今成長了 6.6%。

We plan to conservatively manage our loan policy, focusing on asset quality and profitability, taking the factors, including economic cycle, real estate market and household debt trends and other factors this year as well. And on the other hand, minimize quarterly fluctuations considering RORWA and plan to manage so that loan growth will be predictable.

我們計劃今年謹慎地管理我們的貸款政策，專注於資產品質和獲利能力，同時考慮經濟週期、房地產市場和家庭債務趨勢等因素。另一方面，考慮 RORWA 盡量減少季度波動，並制定管理計劃，使貸款成長可預測。

Next is net interest margin. Group and bank's 2024 yearly NIM posted 2.03% and 1.78%, respectively, and went down slightly YoY. Despite the fact that the effect from two rounds of key rate cuts that were made in Q4 was reflected early on in the market interest rate, bank NIM stopped at dropping 5 bps YoY and once again proved profitability management capability centered on internal soundness.

接下來是淨利差。集團及銀行2024年淨利差分別為2.03%及1.78%，較去年同期略有下降。儘管四季兩輪央行降息效應較早反映在市場利率上，但銀行淨利差較去年同期下降幅度止於5個基點，再次證明以內部穩健性為核心的獲利管理能力。

On the other hand, Q4 bank NIM posted 1.72% and increased 1 bps QoQ, which was a result of partial improvement of new and balanced loan deposit spread enabled through household loan growth, speed control, and following funding amount control as well.

另一方面，第四季銀行淨利差1.72%，較上一季增加1個基點，主要是透過住戶貸款成長、速度控制以及後續融資額度控制，使得新增及平衡貸款存利差有所改善。

We expect the downward NIM trend to continue for the time being this year as well. But in line with our asset growth speed, we will flexibly control the volume and speed of funding and strengthen ALM management to strictly manage our NIM.

我們預計今年淨利差的下降趨勢暫時還會持續。但我們會根據資產成長速度，靈活控制融資規模和速度，加強ALM管理，嚴格管理淨利差。

Lastly, let's go to page 12. I would like to cover group's capital adequacy-related indicators. First, as you can see on the graph on the left, 2024 and group BIS ratio posted 16.41% and CET1 ratio posted 13.51%, respectively. I will explain in more detail regarding CET1 ratio on the right-hand graph.

最後，我們翻到第12頁。我想介紹一下集團資本適足率相關指標。首先，如您在左側的圖表中看到的，2024 年和集團 BIS 比率分別為 16.41%，CET1 比率為 13.51%。我將更詳細地解釋右側圖表中的 CET1 比率。

Group CET1 ratio declined 33 bps QoQ caused by the Q4 net income amount decrease, which limited its contribution to CET1 ratio to a 20 bp level and 2.9% RORWA increase due to factors, including FX rate surge in the quarter. In addition, KRW300 billion of quarterly dividends and shareholder returns, including share buyback, which took place during the quarter led to around 19 bp level downward effect.

集團 CET1 比率環比下降 33 個基點，原因是第四季度淨收入金額減少，限制其對 CET1 比率的貢獻為 20 個基點，且由於本季度外匯匯率飆升等因素，RORWA 增長 2.9%。此外，本季發生的 3,000 億韓元季度股利和股東回報（包括股票回購）帶來了約 19 個基點的下行效應。

And as you can see on the graph on the bottom right of the page, Q4 RWA posted KRW346.9 trillion, a 2.9% increase QoQ. There was around KRW7.5 trillion of credit risk increase due to FX rate surge, including quarterly won-dollar FX rates rising more than KRW151 and this contributed to a decrease of about 30 bps to the group CET1 ratio. However, despite these downward factors, group -- thanks to rebalancing efforts, including reduction in unused credit limit is still maintaining the industry's highest level of differentiated capital capability.

正如您在頁面右下角的圖表中所看到的，第四季度的風險加權資產為 346.9 兆韓元，季增 2.9%。由於匯率飆升，信用風險增加了約 7.5 兆韓元，其中韓元兌美元季度匯率上漲超過 151 韓元，導致集團 CET1 比率下降約 30 個基點。不過，儘管有這些下行因素，集團透過減少未使用的信用額度等重新平衡努力，仍維持著業界最高水準的差異化資本能力。

In order to steadfastly implement our group's value-up framework, we will strictly manage the RWA total amount limit. And through continuous ALM monitoring, we will manage the volatility of asset growth. And to the extent that it does not impair revenue generating ability, we will strengthen efforts to improve capital efficiency through efficient asset rebalancing considering RORWA. Please refer to the details of our business results from the next pages.

為堅定不移地落實集團增值框架，我們將嚴格管理RWA總額限額。並透過持續的ALM監控，我們將管理資產成長的波動性。並且在不損害創收能力的範圍內，我們將透過考慮RORWA的有效資產再平衡，加強提高資本效率。請參閱下一頁以了解我們業務成果的詳情。

And with this, I will conclude KBFG's 2024 business results presentation. Thank you for listening.

至此，我將結束 KBFG 2024 年業務成果演示。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.

本記錄中的英文陳述是由現場翻譯說出的。翻譯由贊助此活動的公司提供。