KB Envisions Asia’s Leading Player
By Lee Hyo-sik
KB Financial Group, the nation's largest financial holding company, is seeking to solidify its dominant position in the banking sector through the extensive customer base and sales networks. It also aims to strengthen its non-banking sector to attain a balanced growth and maximize synergy among its subsidiaries, as well as to provide comprehensive financial services.
KB Financial comprised of nine subsidiaries ― Kookmin Bank, KB Life Insurance, KB Real Estate Trust, KB Investment, KB Credit Information, KB Data System, KB Asset Management, KB Futures and KB Investment & Securities. Currently, KB earns around 96 percent of its revenue from the banking sector.
Additionally, the group plans to make inroads into foreign markets with its strong sales capability, brand image and risk management. Through mergers and acquisitions (M&As) and organic growth among financial units, KB Financial aims to increase its assets to 600 trillion won by 2013 in a move to join the top 10 financial groups in Asia and top 50 in the world.
Its third-quarter earnings soared 57.9 percent to 173.7 billion won from the previous quarter. Its earnings so far this year totaled 522 billion won as of September. KB attributed it to a recovery in its net interest margin and an increase in non-interest income. Its interest income totaled 1.5 trillion won for the third quarter, up 2 percent from the previous quarter, as the net interest margin widened. Non-interest income marked 148.9 billion won for the third quarter, surging 260 percent from the previous quarter.
Its acting chairman Kang Chung-won said the group will pursue organic growth and M&A at the same time to create synergy among subsidiaries, adding KB will seek to acquire businesses in the non-banking sectors, such as securities, asset management and insurance, to secure future growth engines.
Kang then said M&A is one of the key reasons why Kookmin Bank transformed itself into a financial holding company and expansion through M&A in the banking sector is an important strategy to stay a market leader. ``Our competitiveness starts from the banking sector and we will make more efforts to boost its presence in the corporate banking and foreign exchange sector,'' he said.
``Through the expansion of our non-bank affiliated operations, enhanced competitiveness, and multiple financial service offerings, KB seeks to increase customer satisfaction and create synergy through maximization of corporate brand value, ultimately contributing to the growth of Korea's financial industry,'' he said.
Kang then stressed the need to strengthen overseas business. `` If we use our core strength as an effective localization strategy to enhance overseas business, the portion of overseas business units will increase to make up 10 percent of the group's total assets.''
Kang has recently outlined four core strategies to achieve a balance growth among subsidies and maximize its corporate values.
First, the group will balance business portfolio between banking and non-banking sectors, while strengthening the sales network and creating greater values for customers. Then, it will strengthen its preemptive risk management capacity to more effectively monitor market conditions and prepare for the unforeseen financial market turmoil.
Lastly, KB plans to integrate its business units and make them function like one entity to maximize synergy.