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KB Financial H1 net profit rises 20.1% YOY on lower provisions, expenses

KB FinancialGroup Inc.'s net profit for the first half ended June 30 rose 20.1%year over year, thanks to lower provisions for credit losses and employeeexpenses.

Profit attributable to shareholders of the parent companyrose to 1.125 trillion won, or 2,913 won per share, for the six months endedJune 30, from 936.7 billion won, or 2,424 won per share, in the prior-yearperiod.

Net profit for the second quarter totaled 580.4 billion won,or 1,502 won per share, up quarter over quarter from 545.0 billion won, or1,411 won per share.

The group's net interest income for the first half fell 1.1%year over year to 3.051 trillion won from 3.085 trillion won. The group's netfee and commission income fell to 732.4 billion won from 776.1 billion won inthe prior-year period.

Provision for credit losses dropped year over year to 313.5billion won from 458.6 billion won, while expenses related to employeecompensation and benefits fell to 1.463 trillion won from 1.779 trillion won inthe six months ended June 30, 2015.

Net operating profit for the first half rose to 1.293trillion won from 933.8 billion won, while gross operating income dropped to3.730 trillion won from 3.838 trillion won.

KB Financial said its net interest margin including creditcard merchant fees fell to 2.21% during the first half from 2.32% in theprior-year period.

As of June 30, the group's nonperforming loan ratio improvedto 1.03% from 1.16% as of March 31 and 1.35% as of June 30, 2015.

KB Financial's BIS capital adequacy ratio under Basel IIIfell to 15.07% at the end of June from 15.31% at the end of March and from15.86% at the end of March 2015. The group's Tier 1 ratio also fell to 13.47%from 13.67% in the previous quarter and 13.94% in the prior-year period.

KB Financial's banking unit reported a 1.8%year-over-year increase in profit attributable to shareholders for the firsthalf to 743.2 billion won from 730.2 billion won.

The bank's net interest income fell 2.4% year over year to2.306 trillion won from 2.361 trillion won. Net fee and commission income alsodropped to 538.9 billion won from 595.6 billion won.

At the end of the first half, the bank's net interest marginstood at 1.57%, compared to 1.66% in the first half of 2015.

The bank's NPL ratio as of June 30 stood at 0.95%, down from1.08% as of March 31 and 1.24% as of June 30, 2015.

The bank reported BIS capital adequacy ratio of 15.94% as ofJune 30, up from 15.81% as of March 31 but down from 16.40% as of June 30,2015. The bank's Tier 1 ratio increased to 13.93% from 13.80% in the previousquarter, but slipped from 14.08% in the prior-year quarter.

As of July 20, US$1was equivalent to 1,141.58 South Korean won.