KB Financial Group, Inc. (NYSE:KB) Q4 2019 Earnings Conference Call - Final Transcript

Feb 06, 2020 • 02:00 am ET


KB Financial Group, Inc. (NYSE:KB) Q4 2019 Earnings Conference Call - Final Transcript


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Peter Kwon

Greetings. I am Peter Kwon, the Head of IR at KBFG. We will now begin the 2019 Business Results Presentation. I would like to express my deepest gratitude to everyone for participating in our call.

We have here with us our Group CFO and Deputy President, Kim Ki-Hwan as well as other members from our Group management. We will first hear the 2019 major financial highlights from our CFO and Deputy President Kim Ki-Hwan and then have a Q&A session.

I would like to invite our CFO and Deputy President to elaborate on our 2019 business results highlights.

Ki Hwan Kim

Yes, good afternoon. This is Ki-Hwan Kim, Deputy President and CFO of KB Financial Group. I'd like to extend my sincere appreciation to everyone for joining us today at KBFG's earning call for full-year 2019.

Before beginning with our presentation of financial results, let me briefly take you through our key management highlights for 2019. In 2019, as the US-China trade conflict became protracted, we saw a significant escalation of concerns over a global economic slowdown and the Korean economy entering a low rate, low growth trajectory going forward.

For the banking business in particular, there have been consistent concerns of a deterioration in profitability due to diminished scope for further growth, together with a squeeze in the loan-deposit margins. In spite of this negative business environment however, KBFG Group placed utmost priority on financial soundness and profit-driven operations, as a result, achieving qualitative growth centered on our high quality loan book, improved net interest margin and non-interest income, ultimately reaching KRW3.3 trillion in net profit and recurring ROE of 9.51%, representing strong underlying fundamentals.

Moreover, as part of KB Financial Group's efforts towards enhancing shareholder value, we were the first banking financial holding group in Korea to retire roughly KRW2.3 million treasury shares last December, which was assessed as a firm step toward more advanced shareholder return policies.

For your reference, our Board of Directors resolved on a dividend payout of 26% for 2019 at today's BOD meeting, which is 1.2 percentage points higher than last year, as part of progressive dividend policies. Of note, this year's dividend per share is KRW2,210, which is 15.1% higher than last year, as a result of improved financials and additional buyback of treasury shares. Going forward, KB Financial Group will continue to enforce diverse shareholder return measures on the strength of our robust capital position.

Over the past year in 2019, KBFG has been working to speed up our globalization initiatives as well. One example, as everyone is aware, is our December acquisition of a 70% stake in Cambodia's largest micro finance player, PRASAC. We believe that the acquisition will help us overcome limitations of organic growth on the global front, helping lay the platform for further scale-up of our global business.

In addition, last November, we were the first in the financial industry to launch Liiv M, our MVNO, or mobile virtual network operator services, as we step up efforts to acquire further growth