KB Financial Group Inc

Hello, I am Bong Joong Kwon, the director of KB Financial Group IR. We will now begin the 3rd quarter of 2025. I would like to express my deep gratitude to all of you who have participated today. At the financial performance presentation, the director, Sang Rok Na, who is the CFO of the group, and the members of the group are attending. Today's announcement is scheduled to be announced by CFO on the 3rd quarter of 2025, and we will have time to answer questions after the announcement. Then, please announce the 3rd quarter performance of CFO.

Hello, I'm CFO Na Sung-rok of KB Group. Thank you very much to everyone who participated in the 3rd quarter performance announcement in 2025. I will briefly talk about the direction of profitability management of the group that recently responded to the changing business environment. This year, while the low-growth flow of the Korean economy continues, there is a new flow of various changes and new flows such as financial and exchange rate variability, government housing market stabilization measures, and capital market activation measures. Even in this environment, the KB Muscle Group is continuing to gain stable profits by absorbing the uncertainty of the competition based on a solid fund meta. By securing NIM defense with a stable growth rate of key funds, it is reducing the impact of foreign variables, In the new flow of the non-banking portfolio, we are also building a balanced interest structure. RWA also maintains the growth rate at the appropriate level by absorbing the influence of various variables, and it is judged that the overall interest base of the group is managed stably. On the other hand, the domestic economy is facing a turning point where the government's KOSPI 5000 goal and the economic center axis are moving from real estate to the capital market. KB Group is planning to use this change as an opportunity to strengthen the flow of profit-making influence and expand the growth base of the group. Based on the strong WM channel of banks and securities, we will expand the profit base by expanding the sale of brokerage, credit trade, and investment products. and contribute to the growth of the national financial assets. In addition, we plan to capture new business opportunities by leading the flow of the market in the field of production financial and adventure capital expansion based on the accumulated influence and influence in the capital market sector. Outlook Group's venture and innovative company investment experience and success cases will further strengthen the market leadership of the group in the future in the field of growth and industrial investment. In this way, KB Military Group will actively respond to changes based on the prepared leadership and improve the quality of the group's revenue structure. Next, I would like to talk about the three-minute cash payment before explaining the business performance. On Friday, the Board of Directors agreed on a cash payment of 930 won per week, a total of 3,357 billion won. Sanbun-gi Ju-dang Hyeong-geum Bae-dang-geum-un, orecho yeong-gan bae-dang chong-aek sang-yang-gwa, ja-sa-ju ma-i-bi hyo-gwa-ga ban-yeong-dae-me-seo, jeon-nyeon dong-gi-hwa bi-gyo-hae-seul-ttae, baek-sam-si-bo-won jeung-ga-hae-seum-da. Lee-yeo-seo, KB Gun-yong-gu-rup-ae, gye-yong-sil-jeok-eul seol-myeong-deul-i-gaes-seum-da. KB Gun-yong-gu-rup, Sanbun-gi Dang-gi-sun-i-ik-eun, il-jo-yook-cheon-pal-baek-yook- It was recorded at 5,217 billion won. Group ROE is 12.78%, which is improving rapidly compared to the previous year. This is because the main profit of the group is good, but the settlement effect of the ELS short-term bond has disappeared, This is because the profit of the 2nd quarter of the joint fund has been reflected in the profit of the business. This is because the profit of the second quarter of the joint fund has been reflected in the profit of the business. We are maintaining this diversified portfolio. From now on, I will tell you the performance of each category in detail. In the third quarter of 2025, the profit of the group ranking was 9.74 billion won. We recorded a performance similar to the previous year. In the third quarter of 2025, the profit of the group ranking was 3.33 billion won. Compared to the previous quarter, it is similar to the previous quarter by removing the standard effect that was recognized as interest-based funds. Next, I will tell you about the growth of the bank's original loan. By the end of September 2025, the bank's original loan amounted to 3.75 trillion won, 3.3% compared to the end of last year, and 0.9% compared to the previous quarter. The stock loan amounted to 182 trillion won, 0.7% compared to the previous quarter, and The company's loan has grown by 1% compared to the previous year, focusing on large and medium-sized companies. Considering the government's strong management of the stock market and the stabilization of the housing market, the company's loan is expected to show a limited growth rate for the time being. However, from a profitable point of view, the company's portfolio is rebalancing, focusing on medium-sized companies, The third quarter, the bank NIM recorded 1.74% due to the effort to manage the payment cost, and the group NIM maintained the same level as the previous quarter with 1.96%. In particular, this quarter, the bank NIM increased the core budget by about 7.9 trillion won in the case of a reduction in the interest rate of the loan. margin of defense is stable. Next, I would like to talk about non-return interest. The non-return interest of the three-minute cumulative group is 3.73 trillion won, It decreased by 1.1% compared to the previous year's same period. The total sales of other businesses in the third quarter decreased by 15.4% compared to the previous year's same period. It recorded 7,866 billion won. The previous year's loss insurance IB&R preparation fund is mainly contributing to the return of 1,230 billion won. On the other hand, the net income of the third quarter was increased by 3.5% compared to the previous year with a net income of 2,9524,000 won. With the increase in the stock market exchange rate and the increase in the income of the stock market, the net income of the stock market has increased significantly, and the increase in the net income of the stock market and the increase in the net income of the stock market have contributed to the actual improvement. In particular, KB Securities has increased by 16.5%, KB's self-management showed a 23.3% growth rate in net net profit, encouraging the group to expand its net profit. The net profit increase in the same capital market sector is in line with the flow of capital market activity, and I think there is enough room for it to expand in the future. As the non-bank branch is creating about 70% of the interest rate of the group, we plan to strengthen the non-bank competitiveness around the capital market and expand the base of interest rates. Next, I would like to talk about the general management fee. The general management fee for the third quarter is 5.77 trillion won, which is an increase of 2.8% compared to the previous year due to the continuous cost efficiency efforts. The third quarter cumulative group CIR is managed stably within the target range with 37.2%. The party has been working hard to reduce costs and reduce efforts, and at the same time, It maintains investment at the appropriate level in the necessary areas, and it strategically expands investment in the future growth areas such as AI. We will continue to increase the efficiency of the cost structure through selective financing. Next is the 8-page group credit loss deposit. The deposit of the third quarter was reduced by 3,645 billion won, 44.4% compared to the previous quarter. The third quarter group credit cost recorded 30BP, which fell by 25BP compared to the previous quarter, and 46BP as a cumulative standard, which has changed to a lower stable trend. This quarter, the net profit of the previous quarter decreased by about 2,906 billion won compared to the previous quarter, explaining the main cause, while maintaining a conservative additional net profit of the previous quarter, In the latter half of the year, the portfolio improvement efforts and the high inflation rate of the bank's retail credit rating model have significantly eased the burden on the settlement of interest rates. In the third quarter, some interest rates were introduced as a result of the decline in interest rates, and the overall settlement of interest rates has been greatly reduced by reflecting on these influences. The party believes that the efforts to strengthen risk management have gradually begun to work effectively, Considering the flow of this volatility improvement, the credit cost of this year's group is expected to be managed at the middle level of 40BP. Next, I would like to talk about the group's capital ratio. At the end of September 2025, the group's BIS ratio was 16.28%, and the CET1 ratio was 13.83%, ensuring the highest level of capital adequacy in the industry. As of the end of September 2025, the group's household assets increased by 358 trillion won, which is 3.5% compared to the end of last year. In the third quarter, the 48 won per dollar interest rate was affected by the increase in RWA, but we managed the RWA increase at the appropriate level by absorbing the efficiency effect through RWA limit monitoring and portfolio adjustment. From the next page, please refer to the detailed data on the performance I have explained so far. Then, with this, I will end the report on the performance of the KB military group in the 3rd quarter of 2025. Thank you for listening.

Yes, thank you for your presentation. From now on, we will have a Q&A session. If you are watching on the Internet, please use the contact information on the last screen of the presentation. If you are listening on the phone, please press the star and number 1. We will wait for your questions. Yes, I will take the first question. Kim Do-hwa, a member of the Hanwha Investment Authority, please ask a question.

Yes, thank you for the question. I'd like to ask you about the margin and the interest rate. Even if you look at the spread of the margin, it seems that the fall has stopped. The interest rate and the interest rate are almost in decline. Is there a clear forecast for the quarter or next year? I'd like to ask if you think it's possible to have a turnaround, and if you think it's possible to have a turnaround, and if you think it's possible to have a turnaround. I'd like to ask if you think it's possible to have a turnaround, and if you think it's possible to have a turnaround,

Yes, hello. I am Lee Jong-min, the CFO of the bank. I would like to talk about the NIM's outlook. The NIM of the 3rd quarter bank has risen 1BP compared to the previous quarter at 1.78%. This is because the market rate decline trend has been slightly eased, and our core budget has been increased by 4.4 trillion won compared to the previous quarter. Through this reduction in payment costs, I think it is a stable way to prevent the decline in revenue of loan assets. According to the government's strengthening of the stock market, it is expected that the loan growth will continue for the time being. As a result, we will continue to focus on the management of NIM, such as increasing the core budget and reducing the cost of delivery. We have continued to focus on the management of NIM, such as increasing the cost of delivery, We will try our best to reduce the cost of delivery. In the fourth quarter, there is a high chance that the market price will change depending on the market price. There seems to be a slight difference in the direction of the market price in various markets. However, in general, In the second half of the year, we are currently calculating that there will be a slight decline in the level of low single-digit. In order to prevent these parts as much as possible, we will make up for these parts through our effort to reduce the cost of delivery.

You mentioned about the one-in-one loan. What is the main one-in-one interest? Yes, thank you for your answer. I will take the next question.

ANZ's Slava Shilim, please go ahead.

Oh, yes. Hi. Good afternoon. Thank you so much. Two questions from my side, please. One is, given that the policy rates in the U.S. are falling now faster than those by BLK, what is the plan for the financial group or for KB Bank, for Cochrane Bank, to issue additional Tier 1 securities in foreign currency, in U.S. dollars? That's number one. And second question is what is your guidance for NPL coverage for the foreseeable future? Do we expect it to decline further or you will keep it at the current levels or approximately around those? Thank you.

Yes, I have two questions for you. The rate at which the U.S. standard rate is falling is higher than the rate at which the Korean silver rate is falling. I'm curious if you have plans to launch an additional lower dollar mark, Tier 1, in the KB Financial Group. And secondly, I'm curious if you can provide guidance on the ratio of NPL coverage. Yes, so is the group or the bank planning to issue

U.S. dollar denominated additional tier one securities given that the cost of foreign currency debt is now falling faster than the Korean won policy rate.

Yes, I would like to ask the first question again. In terms of financial groups or banks, are you planning to issue additional tier-1 securities under the dollar mark? Because in the case of the U.S., when the standard interest rate drops much faster than that of Korea, I'm curious because the cost is less when you issue it under the foreign currency mark.

Yes, we will prepare the answer and tell you.

Yes, I will answer the first question briefly. The U.S. is expected to fall faster than the U.S. due to the influence of the U.S. government's policy. Considering that, I would say that the U.S. does not have a plan to issue US dollar-marked bonds or new capital yet.

If I were to talk about the coverage ratio, we are currently maintaining a level of 130%. In the past two years, we have been able to maintain a level of 130% due to the clean-up work of the lost assets and the increase in the number of Korean immigrants. However, because we have maintained this standard for the past two years, The clean-up of NPR assets has been organized to some extent, and because of the improvement effects of the portfolio, there is a possibility that the new entry of BUSIL will be a bit limited. However, since we will continue to maintain the foundation of the deposit fund, we are looking forward to the coverage ratio to be higher than the current level.

Yes, the next question is not available at the moment, so I will wait a moment. Yes, I will take the next question. This is from Kim In-isa of BNK Investment.

Thank you for your good performance. In fact, recently, the bank... Director, I can hear your voice a little bit. The KB's poor performance in the third quarter was not bad, but there are some sensitive parts. But the overpayment stories are still coming out. It may be a little difficult to mention, but please tell us about the atmosphere and the company's thoughts. That's all.

I'll get ready to answer and tell you. Wait a minute.

First of all, as of now, it is difficult to talk about the scale and timing of the deposit, because it is difficult to answer because it is not yet clear about the impact, the number of participants, and the standard of payment. First of all, if you look at it, the basic deposit or the reason for this additional deposit, the director's office has shown some clear standards. When we look at the process, we are actively presenting our opinions, and the opinions of the market participants are also reflected, so I think it is a process in which some reasonable standards are being exposed. So, of course, the result cannot be affected, and it will be affected, but we will do our best to minimize the impact. I will wrap up by saying that we are preparing for it from now on, and we are taking care of it so that it will not be damaged due to the standard that we promised. I will wrap up by answering like this.

Yes, there is no one waiting for the next question right now. I'll wait a little longer. Yes, I'll take the next question. Won Jae-woong from HSBC Securities.

Thank you for making good results in a difficult environment. I'll ask you one thing. I think the increase in core interest rates has been raised recently. If you look at the 14th page of the bill, In my experience, when the stock market is doing well, there are some cases where the stock market breaks the low-end or long-term stocks and goes to the low-income stocks. Is it because of this internal financial trend or is it because of the increase in the foreign key stocks? I would appreciate it if you could explain the trend.

Yes, we will prepare the answer and tell you.

Please wait a moment. Yes, I will tell you. The main reason for the increase in the interest rate of the bank is that it has a little influence on the decline in the interest rate overall. Basically, if the market interest rate drops a little, There is a big impact on the increase in the core budget. Recently, the number of individual customers has increased a lot, and the increase in the total number of customers is one of the main causes of the increase in the core budget. The company and the institution are changing the system to receive a lot of core budgets. We are working on expanding the bank account, expanding the bank account, expanding the bank account, expanding the bank account, expanding the bank account, expanding the bank account, expanding the bank account, expanding the bank account, expanding the bank account, expanding the bank account, expanding the bank account, expanding the bank account, expanding the bank account, expanding the bank account, expanding the bank account, expanding the bank account, Yes, thank you for your good answer. Next question, Mr. Jo Ji-hyun of JPMorgan.

Hello, thank you for the question. I have two questions. First of all, I'm curious about what kind of participation plans you have in terms of our productive finance. And in terms of how much you expect the influence of RWA or CET1, if you have any projections, please let me know. Also, in terms of the loan growth rate, up to the third quarter, I think the debt growth rate is a bit weak compared to other companies. I think it's a bit difficult to grow by 4% because of the debt growth rate. The fourth quarter and next year's debt growth, how do you see it? I'd appreciate it if you could link it to the growth of the economy. Secondly, there was a big increase in the third quarter of the shutdown. In the third quarter, the shutdown rate was high, so I think it decreased a lot. But before that, in the second half of the third quarter, you said that the shutdown rate would decrease a lot. Since the third quarter was a bit big, I would like to ask you to tell us what level you expect in the fourth quarter. Is there any part of the fourth quarter that you expect to see a surge? And the NPL has dropped slightly, but do you think that the NPL ratio has peaked in the trend? Please give us some positive comments related to health. Thank you.

Yes, we will prepare and tell you.

Yes, thank you for the good question. I would like to briefly talk about the impact of productive finance and its influence on RWA. Since we have not announced it yet, we are all ready for it, but at the time of the announcement, I think the exact support amount will be determined, and in terms of the amount of support, we will have to actively participate in the government's policy, uh... I think it's very important to change the process. In the end, there was a part of our asset structure that was a little too much for real estate and finance, and I think we need to change that part by increasing the quality of RWA by focusing on manufacturing and SME. Therefore, not only the production financial support amount, but also the impact of asset transfer, There is a part of the story that we need to reduce. Considering all of that, we are planning to grow our RWA. If we consider these influences, I think we can achieve growth goals within 5% next year. One of the factors is that the government has taken measures to stabilize the lower interest rates for risk-weighting and child protection for capital market activity and for the investment of insurance capital. I think we will be able to do well in terms of growth of about 5% next year. In the next year, there will be an impact on production and finance, so it is true that the difficulty has increased in terms of RWA management. However, we have accumulated experience and know-how while managing RWA last year and this year, so I think we will be able to manage it well without any problems next year. Then, I will give more answers to the bank CFO about the loan plan.

As for the loan growth rate, I would like to add that we are aiming for stable growth per quarter. We are growing similarly in the 1st, 2nd, and 3rd quarters. In this regard, the loan growth is overall, the company loan is growing at the level of 3% and the corporate loan is growing at the level of 6% to 7% and is trying to grow at the level of 5% per year. I think that growth will be possible next year at a level of 5% or so.

Thank you for your good answer. Now... One more. Overall, let me explain a little more about the asset growth plan. . . . .

Yeah, um... portfolio 개선 정책을 가져갔습니다. 그리고 적극적인 상매각 정책도 시행을 했고 이런 효과들이 2분기 이후에 점점 나타나기 시작을 했고요. 이 개선세가 3분기까지 이어졌다고 생각을 합니다. 그래서 건전성 측면에 연체율이나 MPL 비율 측면에서 조심스럽긴 합니다만 지표 악화에서 회복세로 전환하는 국면 아닌가 이렇게 생각을 하고요. 특히 정부의 내수경기 We'll see. As I said, as I said, as I said, as I said, as I said, and we believe that this trend will continue until the 4th quarter. Therefore, we believe that CCR will be able to be managed at the level that we aimed for at that time. However, we need to consider that the level of asset productivity and the level of CCR improvement will be limited depending on the level of the future recovery of the domestic market or the real estate market. I think we should not lose our guard by continuing to maintain the management of the dental carcass in the future.

That's all. There is no one waiting for the next question. I'll wait for a moment. I think there's enough discussion going on right now. There's no one waiting right now. Oh, yes. I'll take the next question.

Kim Jae-woo from Samsung Securities. Yes, hello. Thank you for the question. I have two questions. First of all, regarding the reliability you mentioned earlier, I think that even in the case of card extension, it seems to be coming down a little meaningfully. If you feel that this side is also getting better, what you said is that you still look a little careful, but do you think that it looks more meaningful to look at it from the inside? I'm just curious if you think it's going to step up the trend because it's just a short-term part. I told you in addition to the prospect of the fourth quarter, but next year, we're going to I'm curious to see how much it will change. Especially because the credit cost was high in the first half of this year. I'm curious to see if it's right to think that the credit cost was high in the first half of this year, and if it's right to think that the credit cost was high in the first half of this year, and if it's right to think that the credit cost was high in the first half of this year, and if it's right to think that the credit cost was high in the first half of this year, and if it's right to think that the credit cost was high in the first half of this year, and if it's right to think that the credit cost was high in the first half of this year, It seems to have come up a lot more than we thought. If we look at the formula, in the end, the part that goes over 13% and the formula that comes out by multiplying the rw. Based on that, if we just calculate it simply, there may be a lot of expectations that it may come out a lot, but I think there are some parts like that. So this year, we already expect that it will go over 50%. Is it more reasonable for us to open the top level next year? Or is it not that easy? If you look at it simply as a formula, we need to understand how much we can understand the possibility of leading the industry that you mentioned at the company level.

Yes, we will prepare the answer and answer it. As you said, last year, we have been very aggressive or active in the management of entry and exit policies. . . . . . We will continue to do so, but we believe that it is possible to manage it at the same level as it is now. Next, you mentioned the CCR level next year. As I mentioned earlier, if we continue to maintain the standard of management policy that we have brought so far, I would like to say that we are planning to manage the next year's management goal in the early 40%.

Thank you. I heard that you're looking forward to the scale of next year's stock market. I'm also looking forward to the same thing. The 3rd quarter capital ratio is a little bit more than I thought. It's true that we managed it at a higher level than we originally thought. Because the exchange rate is now maintained at a very high level. We've been managing the RWA in terms of ensuring that we have enough buffer for that part. The 4th quarter is less than the 3rd quarter due to seasonal factors. I think that pattern will be repeated for a long time. So, we have to consider the rate of fall. The research committee will know that it is difficult to say that the share price will rise more accurately, but we have a protocol that utilizes the surplus capital that exceeds the set ratio as a share. So that protocol will remain the same next year, but what I can tell you is that as we showed you this year about the time and scale of the share price, We will try our best to be as flexible as possible. In the second half of this year, we had a preemptive meeting with the president. We will try our best to be as flexible as possible. Of course, we will follow the principles of the first half and the second half. The other one is that we have already said that we will keep the highest level of one-on-one immigration, so we will keep that principle and prepare for one-on-one immigration, and we will take good care of it so that the number of visitors can be satisfied.

Next question, Mr. Jo Ji-hyun, you gave it again. Mr. Jo Ji-hyun of JP Morgan.

Thank you for your question. I'd like to ask you one more thing about the state of the stock market. I'd like to ask you one more thing about the state of the stock market. I'd like to ask you one more thing about the state of the stock market. There are two categories of 5% increase in debits. There are various controversies. There are controversies about the fact that only 40% of the cash should be paid. If we say that it will be 25% plus 5%, we don't have to worry too much. But if only 30% or 40% of the cash-delivered companies are debited, Yes, we will prepare the answer and tell you.

Yes, thank you for the good question. To answer it, as I said in the first half of our performance announcement, we will be focusing on expanding the individual investor We have said that we are reviewing the situation in a positive way in terms of ensuring the safety of the people. We are reviewing the existing situation and preparing the necessary situation. I think I can say this much. It's not confirmed yet, so I'm a little careful, but I have a plan to make it more specific through communication with international and foreign stakeholders. It is difficult for us to tell you exactly how we should respond to this situation because we are not yet sure of the conditions for the separation tax on the dividend income. However, when we announced the policy that we had in mind, PBR is 1 or 0.8 to 1. Until we reach that point, we will increase the amount of self-serve and small-scale sales to a higher level. As you asked, if the separation of the cash payment tendency is decided at a higher level of 30% or 40%, it is difficult for us to suddenly jump the cash payment tendency. Of course, it hasn't been confirmed yet, and we need to review it further, but I think it would be good if you understand that the mix between self-sufficiency and cash flow continues to be the existing policy. However, if it is decided that it can be achieved through our little effort, what I can tell you is that we will actively review it and proceed in the direction that can help individual investors as much as possible.

Yes, thank you for your good answer. There is no one waiting right now. It's been about 45 minutes. Let's wait a little longer. I think it's been discussed enough. Let's wait a little longer. If there are no more questions, we'll wrap it up. If you don't have any questions today, please contact IRB and we'll answer them. Yes, I don't think so. Then I will finish the actual presentation here. Thank you.