KB Financial Group Q2 2025 Earnings Report

KB Financial Group EPS Results

• Actual EPS: $3.16
• Consensus EPS: $3.15
• Beat/Miss: Beat by +$0.01
• One Year Ago EPS: N/A

KB Financial Group Revenue Results

• Actual Revenue: $3.32 billion
• Expected Revenue: $3.20 billion
• Beat/Miss: Beat by +$114.60 million
• YoY Revenue Growth: N/A

KB Financial Group Announcement Details

• Quarter: Q2 2025
• Date: 8/14/2025
• Time: Before Market Opens
• Conference Call Date: N/A
• Conference Call Time: N/A

KB Financial Group (NYSE:KB). is a South Korea-based financial holding company that offers a broad range of banking and financial services. Headquartered in Seoul and listed on the New York Stock Exchange under the ticker KB, the group operates through a set of specialized subsidiaries to provide integrated financial solutions for retail, corporate and institutional clients.

The company’s principal businesses include retail and corporate banking, securities and investment banking, insurance (life and non-life), asset management, credit card and consumer finance, and leasing. Its banking operations are centered on KB Kookmin Bank, which serves as the core deposit-taking and lending arm, while other subsidiaries handle brokerage and capital markets activities, insurance underwriting, wealth and asset management, and specialized financing products. KB Financial Group also offers digital banking services and wealth-management platforms to support retail customers and small-to-medium enterprises.

While its primary market is South Korea, KB Financial Group maintains selective international operations and partnerships to support cross-border banking, capital markets activity and corporate clients with global needs. The group’s strategy emphasizes integrated financial services across business lines to capture customer relationships across deposits, loans, investment and insurance products. Detailed information on the company’s executive leadership and recent strategic initiatives can be found in its public filings and investor materials.

KB Financial Group Q2 2025 Earnings Call Transcript

Key Takeaways

• Positive Sentiment: 1H net profit of KRW 3.4357 trillion with Q2 profit KRW 1.7384 trillion, ROE at 13.03% and CET1 ratio at 13.74%, reflecting resilient earnings and strong capital position.
• Positive Sentiment: KBFG commits KRW 3.1 trillion to shareholder returns in 2025, including KRW 1.15 trillion in H2 via dividends and buybacks and plans for additional interim payouts.
• Positive Sentiment: Noninterest income rose 10.9% YoY to KRW 2.7233 trillion, driven by higher securities and derivatives performance, with nonbank businesses now contributing 39% of net profit.
• Positive Sentiment: Asset quality improved with Q2 NPL ratio down to 0.72% and coverage ratio at 138.5%, and management expects credit cost to decline from 55 bps toward mid-40 bps in H2.
• Neutral Sentiment: Bank loan growth guidance remains at 4–5% for 2025, with household loans projected at ~3% and corporate loans at 6–7%, focusing on high-quality assets.

Presentation

[Peter Bongjoong Kwon, Head of Investor Relations at KB Financial Group]

Greetings. I am Peter Kwon, Head of the KBFG, IR division. We will now begin the 2025 first-half business results presentation. Thank you very much for participating in today's earnings release. We have here with us executives from the group, including CFO, Na Sang-rok and other executives from the group. First, our Group CFO, will cover 2025 first-half major performance highlights. After that, we will have a Q&A session. Like in the previous quarter, please note that 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. I will now invite our Group CFO, to walk us through the first-half business results of 2025.

[Na Sang-rok, CFO at KB Financial Group]

Good afternoon. I am Na Sang-rok, CFO, of KB Financial Group. Thank you all for joining the first-half 2025 earnings release` presentation. Today, I will walk through key results of the first half and update you on the shareholder value and return, then move on to the details of our earnings. First, Q2 one. Q2, net profit reported KRW 1,738.4 trillion, with first-half cumulative profit reporting KRW 3,435.7 trillion and ROE of 13.03%. Increase in RWA, for the first half on a cumulative basis was managed at around 2.4%, whilst the CET1 ratio, as of June end came in at 13.74%. All in all, we maintained the balance between resilient earnings power and stable capital management.

[Na Sang-rok, CFO at KB Financial Group]

Under KB's shareholders' return framework, we will be using what is above the CET1 ratio, of 13.5%, which is KRW 850 billion in total as funds for shareholder return in the second half. When accounting for KRW 300 billion of proactive buyback done in the second quarter, the second round of shareholder return upcoming in the second half will amount to around KRW 1 ,150 trillion. Out of the total annual cash dividend of KRW 1.34 trillion for 2025, today's BOD resolution, decided on KRW 335 billion of equally portioned dividend, for second quarter and DPS of KRW 920 billion. Also, we decided to first buy back and cancel KRW 660 billion of treasury shares, within the scope of distributable profit.

[Na Sang-rok, CFO at KB Financial Group]

Out of KRW 850 billion, the KRW 190 billion, which is excess capital, would be used as funds for shareholder return at book closing of 2025 accounts following the BOD resolution. This amount will be classified and attributed to shareholder return for 2025. It is inevitable that portions of the second round of shareholder return, for 2025 will be first paid in Q2, while the rest will be returned by early next year, which is due to the progressive expansion of shareholder return at KBFG, versus their past practices as we exceeded the profit available for dividend payout. I want to reiterate that KB's, firm commitment to shareholder return and its promise stays unchanged. In particular, total shareholder return for 2025 is KRW 3,010 trillion, which is a significant increase year over year.

[Na Sang-rok, CFO at KB Financial Group]

Although TSR, may slightly fluctuate depending on the size of annual net income, we expect record high TSR, for the year. Also, we plan to have interim dividend payout from the subsidiaries, in the second half to secure ample amount of distributable income for the upcoming year. Next is page two. We shared our shareholder return plan for both first half and second half of 2025 with the market for the benefit of transparency and are faithfully implementing the plan. In the second half, we plan to focus on three key directions, in terms of capital discipline. First, promise to the market. We know the gravity of this commitment and will hence implement the announced shareholder return framework with consistency. Based on our execution capabilities, we will further solidify trust from the market. Second, we will manage risk-weighted assets with greater precision.

[Na Sang-rok, CFO at KB Financial Group]

RWA growth, will be controlled at an appropriate level, but rather than just managing the rate of RWA growth, we will change the fundamentals to one that guarantees our bottom line. Third, under such capital discipline, to ensure the shareholder return expansion is not a one-off event, we will continue to balance between ROE and capital ratio, as done so in the first half of the year. Now, moving on to KBFGs, business performance. Group's net profit for Q2 was KRW 1,738.4 trillion, and on a first-half basis, it was up 23.8% year over year, reporting KRW 3,435.7 trillion. Such result was driven by higher non-interest income and the recovery from non-operating profit, which drove the group's net profit.

[Na Sang-rok, CFO at KB Financial Group]

Non-interest income was up 10.9% year over year, and due to the absence of ELS provisioning, seen last year and gains from disposition of assets under consolidated funds, non-operating income increased by KRW 1 ,104.7 trillion year over year. Also, non-bank, accounted for 39% of the group's first-half net profit. Diversified business portfolio, of the group is expected to play a critical role in securing earnings stability in times of interest rate decline and boom in the stock market trading. With that said, I will now move on to the breakdown of the earnings results. 2025 first-half group net interest income posted KRW 6,68.7 trillion, and despite the net interest margin contraction following the rate cut through stable loan growth, we achieved results similar to the same period last year. However, it decreased 4.8%.

[Na Sang-rok, CFO at KB Financial Group]

Not QOQ, because around KRW 159.1 billion of expenses from the liquidation of consolidated fund in Q2 was temporarily reflected on interest expenses. Excluding this on a recurring level, we are maintaining the level of the previous quarter. Next, I will cover bank loans in won growth. As of end June 2025, bank loans in won posted KRW 372 trillion and grew 2.4% year to date and 1.4% QOQ. Household loans posted KRW 181 trillion, and mortgage loans and unsecured loans grew evenly and grew 0.9% QOQ. Corporate loans posted KRW 191 trillion, and centering on large corporates and prime SMEs, grew 1.9% QOQ. We plan to operate our loan policy from a comprehensive profitability perspective in the second half as well and stably secure our interest income base. Next is net interest margin that you can see on the bottom right side.

[Na Sang-rok, CFO at KB Financial Group]

Q2 bank NIM, posted 1.73% despite a first two-cut funding cost, including increasing core deposits, and with the loan yield contraction following the market rate cut, it went down 3 basis points QOQ. Meanwhile, group NIM, posted 1.96%, and the impact to the bank NIM decline, was further compounded by the decline in credit card receivables yield and went down 5 basis points QOQ. In the second half as well, since we expect the interest rate, decline trend to continue through core deposit growth and profitability-based loan portfolio management, we plan to minimize the contraction of NIM, as much as possible. Next, I will cover non-interest income. First-half group non-interest income posted KRW 2.723.3 trillion and improved 10.9% YOY.

[Na Sang-rok, CFO at KB Financial Group]

Due to the decline in exchange rates and the rise in stock market index performance, related to securities and derivatives significantly improved, leading to an increase of KRW 211.7 billion of other operating income compared to the same period last year. On the other hand, first-half group net fee income posted KRW 1,966 trillion, a 2.9% increase YOY. With the increase in bancassurance sales commissions and securities brokerage fees, combined with higher fee income from the disposal of assets under management, achieved results, which was a KRW 56.3 billion increase compared to the same period last year. In particular, Q2 group net fee income posted KRW 1,032 trillion, a 10.5% increase QOQ, and surpassed for the first time on a quarterly basis KRW 1 trillion.

[Na Sang-rok, CFO at KB Financial Group]

I believe these results were a fruit of our consistent efforts to expand fee income, that does not accompany RWA growth, and our growth in non-interest income, by our subsidiaries. Going forward, based on diversified group portfolio, we will gradually achieve qualitative improvement of our profit structure. Next, I will walk you through our G&A expenses. First-half G&A expenses ,posted KRW 3,355.3 trillion, a 4.1% growth YOY. First-half group CIR, is being maintained at a stable level of 36.9%. Going forward, we will actively expand investments to secure future growth drivers, including exploring new businesses and enhancing productivity through AI, and also strive to rationalize costs, focusing primarily on rationalizing recurring expenses and continuing our group's CIR, downward stabilization trend. Next is page eight, group's provision for credit losses.

[Na Sang-rok, CFO at KB Financial Group]

Q2 provision for credit losses posted KRW 655.1 billion and group credit costs posted 55 basis points and maintained a similar level to the previous quarter. In the previous quarter, in the core division, which the market was concerned about as a result of implementing focus measures to improve asset quality, including sale of non-performing loans and reinforcement of short-term delinquency recovery teams, the scale of provisioning was significantly reduced compared to the previous quarter. However, while maintaining a conservative provisioning stance, bank and securities additionally provisioned around KRW 100 billion for real estate PF sites, and guaranteed completion real estate trust projects, leading to Q2 credit loss provisioning level, and CCR is being maintained at a similar level to the previous quarter. The NPL coverage ratio slightly improved QOQ.

[Na Sang-rok, CFO at KB Financial Group]

Meanwhile, in the second half of the year, along with key rate cuts driven by the government's economic stimulus efforts, such as supplementary budget and support for vulnerable borrowers through the establishment of a bad bank, we expect that the asset quality management conditions will improve favorably, and we believe that the credit cost has passed its cyclical peak, and is entering into a downward phase. In the second half, we will do our best to achieve meaningful improvements in asset quality by actively promoting the rebalancing of non-performing assets and reducing high-risk asset limits. Let's go to the next page. Q2 group NPL ratio, posted 0.72% and improved 0.04 percentage points QOQ. Group's NPL coverage ratio, improved 5.4 percentage points QOQ and recorded 138.5% and has sufficient loss absorption capacity to prepare for potential non-performing assets. Lastly, I will cover group's capital ratio.

[Na Sang-rok, CFO at KB Financial Group]

As I, explained previously, group's VIS ratio, as the end of June 2025 on a preliminary basis posted 16.36%, and the CET1 ratio, recorded 13.74% and secured the industry's highest level of capital adequacy. As of end June 2025, group's risk-weighted assets posted KRW 354 trillion and grew 2.4% YTD, and considering our annual RWA growth target, is being maintained and managed at appropriate and controlled pace of growth. The following pages contain details on the performance we have just presented, so please refer to it if needed. This concludes KB Financial Group's 2025 first-half business performance report. Thank you for your attention.

[Peter Bongjoong Kwon, Head of Investor Relations at KB Financial Group]

Thank you. We will now begin the Q&A. For those of you joining us via the internet, please refer to the contact info on the very last page of the presentation screen. For those of you using the phone, press star and want to submit your questions.

[Peter Bongjoong Kwon, Head of Investor Relations at KB Financial Group]

Please bear with us one moment as we wait for questions to come in.

[Peter Bongjoong Kwon, Head of Investor Relations at KB Financial Group]

We will take the first question. Kim Jae-woo from Samsung Securities, please go ahead.

[Kim Jae-woo, Analyst at Samsung securities]

Thank you for taking my question. I would like to ask two questions. Even with the earnings presentation, I still have a question as to the size of your second-half shareholder return. In terms of the timing of the share buyback, you will be doing that in the early next year. For the second half, is it correct for us to say that the size of the shareholder return for the second half is KRW 850 billion? Also for next year, what are your plans to make sure that you have ample amount of distributable profit for dividend? Second is a question related to your provisioning.

[Kim Jae-woo, Analyst at Samsung securities]

I was expecting a lower figure in terms of the provision, so I'm a little bit confused. As you've mentioned, all the asset quality-related metrics have improved, but still we've seen certain increases in the provisioning level, so I would like to understand as to why that is. I understand the credit cost guidance is 45 basis points for the year. In the first half, we are now seeing CCR at 55 basis points. That means that in the second half of the year, what would you guide us? Because you usually provision more at the end of the year, even if we consider that on an annual basis. Would like to understand. As to the annual guidance, is it staying the same as per your previous communication?

[Peter Bongjoong Kwon, Head of Investor Relations at KB Financial Group]

Just give us one moment as we prepare to answer your questions.

[Peter Bongjoong Kwon, Head of Investor Relations at KB Financial Group]

Thank you, Mr. Jae Woo Kim, for your question.

[Peter Bongjoong Kwon, Head of Investor Relations at KB Financial Group]

Regarding the question on the size of the shareholder return, as mentioned during the presentation in the second half of the year, KRW 850 billion, that is the size. However, the excess capital above the distributable profit, KRW 660 billion, therefore is decided to be paid to be enforced. With the BOD resolution, the remaining, which is KRW 190 billion, will be used as funds for shareholder return. As mentioned during the presentation, including the KRW 190 billion, 2025. That KRW 190 billion is going to be attributed to 2025 shareholder return, which is in excess of the distributable profit. In the second half, for us to ensure we have ample amount of distributable profit, we are open to many different options. First being receiving the interim dividend payout from our subsidiaries. We think that that is a way for us to ensure that we have these resources.

[Peter Bongjoong Kwon, Head of Investor Relations at KB Financial Group]

Also, there is also impaired dividend payout, as well. We are open to various different options, so you do not need to be concerned. KRW 850 billion, as per our presentation, that is the size of the second-half shareholder return. With the CCR, for the second half of the year, as you have mentioned, the second quarter CCR, basically reported the similar level as we have seen in Q1. Basically in line with the natural increase in the provision and also to counter decline in the property, what we did was we had a preemptive provisioning of around KRW 100 billion out of certain potentially certain loans and exposures.

[Peter Bongjoong Kwon, Head of Investor Relations at KB Financial Group]

What we did was, in terms of the overlay approach, we made certain additional provisioning so that we could ensure certain level of loss absorption capability in light of the potential sellout rate of the apartments and the progress as well as rental rate. Also, we went through a very active writing offs and selling offs, and also rebalancing of the NPLs. We really strengthened our collection organization. We have implemented multiple number of plans, and we are seeing the impact of these changes from the second quarter. In terms of NPL, and asset quality-related metrics, we are seeing improvement. Also, on top of that, in the second half, there will be certain level of reversals as we sell off the NPLs, and the size of the provisioning for the second half. We think that it is going to stabilize as we enter into the second half.

[Peter Bongjoong Kwon, Head of Investor Relations at KB Financial Group]

However, we are exposed to potential tariff-related pressures from the outside under the new Trump Administration. There are still certain external factors that may weigh down on our metrics. However, based upon our asset quality approach and also with our soft lending policies against the vulnerable borrowers, if we are able to manage those two aspects, unless there's any unexpected surprises, we believe that we will be able to control CCR, at mid 40 basis point level. I also just would like to add on the shareholder return framework, at KBFG . You would already know this quite well. Basically, the excess capital above certain baseline will be fully used to return back to our shareholders. There is something carryover to next year. Maybe some of you may be concerned that the shareholder return amount, for the next year will be lower.

[Peter Bongjoong Kwon, Head of Investor Relations at KB Financial Group]

However, if you look at the RWA, the resilience, and also as we are able to maintain our capital ratio, basically the carryovers from this year is not going to negatively downsize the amount of shareholder return that the shareholders can expect for next year. In light of the earnings resilience and our capital management and our capital ratios, because of this carryover, because of the excess capital above the distributable income, it will not have a negative impact on next year's shareholder return. I just wanted to reiterate that. Thank you.

[Operator]

We will take the next question from NH Securities. We have Chong Junseop on the line, sir.

[Yong Suk Jun, Chief Information Officer at NH Securities]

I'm NH Securities' Yong Jun Suk. Thank you very much for the opportunity. I have two questions. First question is regarding your great performance and 0.8 PBR. I think you have achieved nearly that number.

[Yong Suk Jun, Chief Information Officer at NH Securities]

Although it may not be imminent for the contribution of dividends and share buyback, I think you can consider that. If you can have some changes in your policy, can you tell us about the timing and what will change going forward? If you can share with us anything at this juncture. My second question is about your loan growth. In last month, the government came up with measures to control household loans. In the second half, it seems that the speed of household loan growth, will be decelerated compared to the first half. Regarding the loan growth guidance that you have presented in the early part of the year, will this change? If household loans suffer, are you going to come up with any countermeasures?

[Peter Bongjoong Kwon, Head of Investor Relations at KB Financial Group]

Thank you very much for the insightful questions regarding our shareholder return policy, regarding PBR enhancement, and the mix change that may happen.

[Peter Bongjoong Kwon, Head of Investor Relations at KB Financial Group]

According to our framework, I have been emphasizing that with lower PBR, share buyback and cancellation amount will be increased. When PBR goes up, share buyback and cancellation contribution will go down and cash dividends will go up. I think we have mentioned this in our corporate value enhancement plan. Regarding your question, as you have just asked, our PBR, is improving faster than we had expected, and a lot of the discount factors have been resolved. It seems that if we can reach the consensus, then regarding the cash dividend payout ratio, it can go up. It is being improved very quickly. We are seriously considering a change in this mix at this juncture. Regarding our loan asset growth, our bank CFO, will take that question.

[Na Sang-rok, CFO at KB Financial Group]

Thank you for the question. I will answer that question regarding loan growth for 2025.

[Na Sang-rok, CFO at KB Financial Group]

For profitability and asset quality, focusing on those two, we considered high-quality asset growth and having very efficient capital usage. The bank's loan growth, we believe that it will be 4-5% within our business plan. As you have mentioned, the financial authorities have a financial plan for controlling household loans. We are going to have different loans that are profitable and other mortgage loans that will be of focus. For the collective loans, I think we will be more considerate. We are going to have optimization of our household loan portfolio. Looking at the economic growth pace, and considering the reinforcement of the government's policies, we believe that the household loans will grow at about 3%. For corporate loans, we are going to focus and prioritize high-quality loans. We are going to have 6-7% annual growth.

[Na Sang-rok, CFO at KB Financial Group]

For large corps, according to the business environment changes, we are going to do our best to secure high-quality corporate loans, going forward. For SME loans, we are going to strengthen the customer base. We are going to have more auxiliary transactions. For Sohos, we are going to have growth through portfolio diversification, in different areas.

[Operator]

Thank you. We will take the next question from Hanwha Investment & Securities, Kim Dong-ho. Please go ahead.

[Kim Dong-ho, Analyst at Hanwha Investment Securities]

Yes, thank you for taking my question. You have mentioned distributable profit, and so I was able to look at the disclosed information from the subsidiaries receiving the dividend before the end of the year. Is that possible? Under the assumption that there is no change in the rules, would the dividend payout, from the subsidiaries be possible from February? Because out of your total capital, you would have to deduct certain things.

[Kim Dong-ho, Analyst at Hanwha Investment Securities]

The reserve, if you look at the PNC insurance, it seems like there is no ample room there. That is why I am asking this question. My second question is on PBR. If PBR, is improving, you have talked about increasing the amount of cash dividend payout. At that point in time, do you have a certain valuation level that you are considering as a baseline? I ask this question because other banking holding companies, if you look at their value of disclosures, they say PBR 0.8-1 times the range, that they would be willing to adjust the ratio. Could you also share with us a certain band in terms of the PBR multiple?

[Operator]

Just give us one moment before we answer that question.

[Peter Bongjoong Kwon, Head of Investor Relations at KB Financial Group]

Yes, thank you very much for that good question.

[Peter Bongjoong Kwon, Head of Investor Relations at KB Financial Group]

I talked about the potential interim dividend payout, from the subsidiaries and using that as funds for profit for dividend. If you look at our life insurance and PNC, the interim dividend, that we get paid from that, that is not something that we are considering because there is a capital discipline and capital ratio-related regulation, that is changing in the insurance industry. We are thinking more of that impact coming from next year, not necessarily this year. Setting the insurance aside, we also have securities and brokerage subsidiaries. We are thinking of getting that interim dividend around these types of subsidiaries. Now, for the PBR, range and the band. Not other holding companies, but us as well, 0.8 times-1 times the multiple. Within that range, we are open to potentially adjusting the mix between the two.

[Peter Bongjoong Kwon, Head of Investor Relations at KB Financial Group]

This range itself is quite broad, but what is important is 0.9, 0.8. It is not the number itself that is important. It is about actually relieving all the discount factor and the start of the re-rating cycle. If we think, in our view, that that timing has come, we will be able to come back to you and give you a more concrete answer. The band that other holding companies are talking about, I can also tell you that, yes, we are also moving within that range of PBR. Thank you.

[Operator]

Thank you very much. From HSBC, Jeungwon Hong. You are on the line, sir.

[Jeungwon Hong, Country Talent Acquisition Manager at HSBC]

Congratulations on your great performance, and thank you very much for shareholder return. I have two questions. The first question is about overseas business. Bank KB Bukopin, Indonesia. I know that you are turning into a profit, and I think you are seeing stabilization.

[Jeungwon Hong, Country Talent Acquisition Manager at HSBC]

Regarding Q2 performance, I would like to know more for Bank KB Bukopin. In the second half of the year, can you tell us about how you think the earnings will play out? I know JB holdings or Capital, you have sold. Regarding those profits, when will it be attributable to your P&L? I know that you have the excess of the distributable profit, that makes you need to defer it to the next year. I think some decisions are made at the GSM. Regarding the KRW 190 billion of additional share buyback, and cancellation, will it be after March? I am not very knowledgeable about this. Can you tell us about the timing, if that will be when or not?

[Peter Bongjoong Kwon, Head of Investor Relations at KB Financial Group]

Thank you very much for your questions, and we will soon answer your question. Thank you very much for your great questions.

[Peter Bongjoong Kwon, Head of Investor Relations at KB Financial Group]

For the reduced dividends, it needs the resolution from the GSM. Regarding interim dividends, this can be done before that. However, with the interim dividends, and after that, we close 2025, the books, then there will be the distributable profits that are calculated that can be done for the next year, fiscal year. At that time, we can tell you that we can have additional shareholder return.Thank you very much for your question.

[Kang Nam Che, Chairman at KB Kookmin Bank]

I am Kang Nam-chae, in charge of global business at KB Kookmin Bank. I have a question about KBI or Bank KB Bukopin. In Q2, we turned up profit. In the first half, we expect about KRW 20 billion of profit. In the second half, we believe that this trend will continue.

[Kang Nam Che, Chairman at KB Kookmin Bank]

However, for G&A, in the second half, we will have a bit more, so it might be a little bit lower than the first half. We believe a KRW 20 billion level of net income or profit will continue. Regarding KBI subsidiary, JB Capital, acquired capital. In the case of Indonesia, for the buyer, there is fit and proper test that needs to be passed by the authorities, and it will take about one year for this test to be completed. Accordingly, regarding the proceeds of the sale, we believe that it will be booked probably in the first half of next year. Thank you.

[Operator]

Thank you. We do not have any additional questions that's in the queue, but we will wait one more minute. If there are no additional questions, let me now respond to some of the questions that were submitted by our shareholders.

[Operator]

Before we go into that, let us just wait one moment. Yes, from Korea Investment & Securities, Baek Doosan, please go ahead.

[Baek Doosan, Senior Analyst at Korea Investment Securities]

Yes, I am Baek Do-san, from KIS. I know you've talked about this, but I just have one more follow-up question on shareholder return. Because KRW 190 billion, you will be buying back and canceling next year. I think this is about five basis points in terms of capital. Next year, basically, you will use the sources that's above 13.5% in excess of that. For next year, it's going to be 13.05% or 13.06%. Would that be the fund for distribution, or is it still going to be 13.00%? I just would like to get some color with regards to the excess capital and the CET1 ratio.

[Peter Bongjoong Kwon, Head of Investor Relations at KB Financial Group]

Yes, I think your question actually has the answer in it because it actually is the same thing.

[Peter Bongjoong Kwon, Head of Investor Relations at KB Financial Group]

Basically, capital that's in excess of 13% of CET1, will be fully returned back to the shareholders. The five basis points, because we did not pay that out yet, so based upon the CET1 ratio, of the year, it will still be reflected in the CET1 ratio, as of the end of the year. For that amount, that is going to be attributed to 2025 shareholder return amount, as I've mentioned during my opening presentation.

[Operator]

Thank you for your questions. I don't think we have additional queues yet, so we will hold and wait for questions.

[Peter Bongjoong Kwon, Head of Investor Relations at KB Financial Group]

I don't think that we have additional questions. I think that we can cover some questions that were asked by our shareholders. I think we can share the screen. Regarding the separation of taxation of dividend income, if this takes place, do we have any plans to increase our cash dividends?

[Peter Bongjoong Kwon, Head of Investor Relations at KB Financial Group]

Second question, according to the level of PBR, can we, or are we going to adjust our dividend shareholder buyback and cancellation ratio? The CFO, will answer the questions.

[Na Sang-rok, CFO at KB Financial Group]

I think I've already answered the second question. Regarding if the separate taxation of dividend income takes place, of course, we need to actively consider whether we're going to expand our cash dividends. We do not have concrete calculation basis for dividend payout ratio, or detailed provisions of the enforcement decree, so we cannot really set forth clear standards. However, I have mentioned that based on PBR, cash and share buyback and cancellation, we are going to do our best to have an efficient mix. Regarding the size of our profits, our cash dividend payout ratio, and dividend yield, we're going to consider all of this.

[Na Sang-rok, CFO at KB Financial Group]

Regarding the separation of taxation of dividend income, we believe that it will be a great opportunity to expand our shareholder return. Because we are representative stock for the dividend payout, I think if we have the implementation of separate taxation of dividend income, we're going to do our best to have this work in favor of our shareholders. I think that now we can conclude today's earnings release. Thank you very much for your attention.

Participants

Executives

• Na Sang-rok, CFO
• Peter Bongjoong Kwon, Head of Investor Relations

Analysts

• Kim Dong-ho, Analyst at Hanwha Investment Securities
• Baek Doosan, Senior Analyst at Korea Investment Securities
• Kim Jae-woo, Analyst at Samsung securities
• Jeungwon Hong, Country Talent Acquisition Manager at HSBC
• Kang Nam Che, Chairman at KB Kookmin Bank
• Yong Suk Jun, Chief Information Officer at NH Securities