KB Financial Q1 net rises 23.3 pct on rising margin

(ATTN: UPDATES with more info throughout)
SEOUL, April 28 (Yonhap) -- South Korea's top banking group KB Financial Group Inc. said Thursday that its first-quarter earnings rose 23.3 percent from a year earlier on improved interest margin and a fall in loan-loss reserves.
Net profit came to 757.6 billion won (US$706.3 million) in the January-March period, compared with 614.5 billion won during the same period the previous year, the group said in a regulatory filing. It compared with a net loss of 341 billion won in the fourth quarter of last year.
Revenue declined 12.1 percent on-year to 6.44 trillion won while operating profit jumped 60.3 percent to 1 trillion won, it added.
"The group's higher net income mainly came as interest income rose amid its improved net interest margin (NIM) and expenses including labor costs declined following its sweeping voluntary retirement program," the group said.
Despite the stronger earnings, the group's shares declined 1.26 percent to close at 54,700 won on the main bourse. The outcome came after the market closed.
South Korean banks' NIMs, a key gauge of profitability, have been on the rise as a series of rate hikes by the central bank bolstered interest gains from lending, raising their interest income.
KB Financial's NIM reached 3.06 percent in the first quarter, up 0.17 percentage point from three months earlier.
The group said it put aside money worth of 415.6 billion won to cover credit losses last quarter, down 13.8 percent from a year earlier on the back of its improving asset quality.
Kookmin Bank, the flagship unit of the group, logged a net profit of 740.5 billion won in the first quarter, up 24.5 percent from a year earlier.
The group's total assets reached 344.8 trillion won as of the end of March, up 3.4 percent from the end of last year.
Local banks began to report earnings results in line with the new accounting rule called the International Financial Reporting Standards (IFRS) starting this year. Under the new yardstick, the rules on calculating banks' loan-loss reserves are eased, which will help local lenders book better earnings.
sooyeon@yna.co.kr