KB Financial Group Inc.

KBFG reported Q2 net profit of KRW 1,992.2 billion and 1H net profit of KRW 3,884.6 billion, up 13.1% YoY. First-half NII was KRW 6.473 trillion, slightly up YoY, while group noninterest income was KRW 3.6292 trillion, up 33.3% YoY. Bank NIM was 1.74% in Q2 and group NIM was 1.94%; group CIR was 36.2%, and 1H credit cost was 39 bp, down 15 bp YoY. Preliminary June capital ratios were a BIS ratio of 15.91% and CET1 of 13.74%, with RWA at about KRW 370 trillion. For guidance, management said 2H NIM should improve as rate hikes and repricing flow through, annual NII/NIM trends should be better than 2025, and credit costs for the year should be in the early-to-mid-40 bps range.

The lead executive framed the first half as a period of stronger capital efficiency and active capital reallocation, with surplus capital being recycled into higher-growth businesses like securities and capital markets. Management emphasized a ‘virtuous cycle’ of earnings generation and reinvestment, especially through the securities subsidiary and planned capital increases totaling KRW 1.7 trillion. Tone-wise, the commentary was confident but cautious, repeatedly noting FX volatility, market-rate uncertainty, and the need for flexible timing on shareholder returns.

The CFO highlighted strong profitability and capital, with 1H net profit of KRW 3,884.6 billion, ROE of 14.09%, CET1 of 13.74%, and BIS of 15.91%. He said the board approved KRW 700 billion of share buyback and cancellation and a Q2 dividend of KRW 1,155 per share, and reiterated that capital above 13.5% will be returned to shareholders, with 2026 total shareholder return expected to be KRW 3.7 trillion when including the first-round return announced in February. On the income side, he pointed to NII of KRW 6.473 trillion, noninterest income of KRW 3.6292 trillion, CIR of 36.2%, and a Q2 credit-cost rate of 38 bp, while warning that 2H provisioning will remain conservative due to FX, rates, and macro risk.

Analysts focused heavily on shareholder return, asking how KB will allocate between dividends and buybacks after the stock price moved above 1x PBR. Management said the remaining surplus capital is about KRW 180 billion, that early execution of buybacks is now possible, and that the mix between cash dividends and buybacks may be adjusted flexibly, without giving a concrete new formula. Questions also centered on NIM pressure, fee-income sustainability, provisioning, and securities growth; management said 2H NIM should recover, fee income should stay above last year thanks to higher trading activity and capital-market deals, and full-year credit costs should remain in the early-to-mid-40 bps range.