Seoul: KB Financial Group reported a significant 61 percent increase in its first-quarter net income, primarily driven by a base effect and heightened interest income.

According to Yonhap News Agency, the financial holding company's net income reached 1.69 trillion won (US$1.2 billion) for the January-March period, a notable rise from the 1.04 trillion won profit recorded during the same period last year. This earnings report surpassed market expectations, with the average net profit estimate by analysts at 1.59 trillion won, as per a survey conducted by Yonhap Infomax, the financial data firm of Yonhap News Agency.

Despite the impressive net income growth, KB Financial's operating profit for the first quarter decreased by 2.2 percent year-on-year, totaling 2.29 trillion won. Revenues also saw a decline, falling 15.4 percent to 19.74 trillion won. The financial holding company attributed the growth in interest income, which rose by 2.9 percent to 3.2 trillion won, and a 4.9 percent increase in commission income to 1.29 trillion won during the referenced period.

The group's net interest margin, which represents the difference between interest received and paid, improved slightly to 2.01 percent in the first quarter from 1.98 percent a year earlier. KB Kookmin Bank, the flagship lender of the group, experienced a significant jump in net profit, reporting 1.26 trillion won in the first quarter compared to 389 billion won in the previous year. The bank had incurred substantial costs last year to cover compensation related to losses from equity-linked securities sold to customers.