KB Financial Q4 net dips 2.42% on falling margins

Weaker profit margins and interest income pulled KB Financial's fourth-quarter earnings down from a year ago.

Net income amounted to 213.7 billion won or US$195.8 million in the October-December period, down 2.42 percent from 219.0 billion won the previous year.

From the previous quarter, its net profit plunged 47.9 percent due to a drop in non-interest income.

For the entire 2012, the banking group logged a net income of 1.77 trillion won, also down 25.2 percent from a year earleir.

"Due to the sluggish market, we suffered a one-off loss of 206 billion won from stock investment in POSCO
and Hyundai Merchant Marine," said Yoon Jong-kyoo, chief financial officer of KB Financial.

KB Financial Group, like other major financial firms here, has been burdened by the low-growth trend, following the central bank's two rate cuts last year, but fared relatively well as it managed to keep its loan-loss reserves at a steady amount.

Its loan-loss reserves stood at 383.7 billion won in the fourth quarter, slightly up from 373.7 billion won
three months earlier. On an annual basis, the figure stayed unchanged at 1.51 trillion won in 2012.

Kookmin Bank, the flagship unit of the group, logged a net profit of 158.7 billion won for the final quarter
of 2012, up 22.1 percent from a year ago.

The group's net interest margin came in at 2.88 percent as of the end of 2012, down from 3.07 percent from a year earlier.

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