SEOUL– Major South Korean financial holding firm KB Financial Group Inc. on Tuesday said its net profit declined 2.06 percent in the third quarter from a year ago due to weak performances by its nonbanking subsidiaries.

Consolidated net profit came to 1.27 trillion won (US$884.4 million) in the July-September period, down from 1.3 trillion won from a year earlier, the financial group said in a regulatory filing.

Operating profit dropped 10.55 percent to 1.6 trillion won, while sales revenue swelled 98.8 percent to 32.7 trillion won.

KB Financial Group’s earnings failed to meet market expectations. The average estimate of net profit by analysts stood at 1.32 trillion won, according to a survey by Yonhap Infomax, the financial data firm of Yonhap News Agency.

In the first three quarters this year, the group’s net profit grew 6.77 percent to 4.03 trillion won from a year ago.
The hawkish interest rate hikes by the central bank stretched the lender’s margin, while nonbanking subsidiaries, including securities and bond segments, suffered from the sluggish market.

In the third quarter alone, KB Financial Group’s net interest margin — the difference between interest paid and interest received — stood at 1.98 percent.

The group’s flagship subsidiary KB Kookmin Bank saw its net profit rise 6 percent on-year to 824.2 billion won. Net profit of KB Asset Management Co. soared 55.4 percent to 28.6 billion won.

Among nonbankers, KB Securities Co. saw its net profit drop 27.9 percent on-year to 121.7 billion won during the same period.

Net profit of card issuer KB Kookmin Card Corp. contracted 35.6 percent on-year to 106.6 billion won.

Source: Yonhap News Agency