South Korea’s KB Financial Group Inc. reported a 55.4 percent increase in net profit for the third quarter, thanks to an even growth in both interest and non-interest income including fund commissions.

According to its regulatory filing on Thursday, KB Financial Group raked in 897.4 billion won ($797 million) in net income on a consolidated basis for the third quarter ended September, coming above the market expectations of 870.3 billion won. Operating profit rose 61.5 percent to 1.17 trillion won over the same period on a 38 percent jump in revenue to 9.48 trillion won.

The group’s cumulative net profit in the first nine months of this year also surged 63.2 percent from a year ago to a record high of 2.76 trillion won. Its shares ended down 0.5 percent, or 300 won, at 58,800 won on Thursday from a previous day.

KB Financial Group’s stellar performance was mainly driven by a rise in profits in its key lending unit KB Kookmin Bank. The lender’s net income in the July-September period totaled 632.1 billion won, up 49.85 percent from a year ago. In the first nine months of this year, KB Kookmin Bank has raked in 1.8 trillion won in net profit, up 58.1 percent from a year ago.

In the beginning of the third quarter, concerns were high that banks would be hit by a possible drop in demand for mortgage-backed loans and overall housing transactions following the introduction of a series of government’s real estate measures aimed at curbing the country’s ballooning household debts and preventing speculative property investments.

Shrugging off such worries, the country’s commercial banks have seen the growth in interest income in line with a rise in interest rates from July to September. KB Bank’s cumulative interest income for the first nine months of this year reached 5.69 trillion won, up 22.3 percent from a year ago.

The financial group also benefitted from the resilient stock market that has helped its brokerage units collect handsome commissions from fund sales. In particular, KB Securities, the group’s investment bank unit that was relaunched after a merger with Hyundai Securities Co., largely helped the financial group accumulate 1.5 trillion won in commission income for the first nine months of this year, 37.4 percent higher than a year ago. KB Financial bought Hyundai Securities last year.

An unnamed official from KB Financial Group said that on top of the addition of Hyundai Securities, its acquisition of LIG Insurance, which is now named as KB Insurance Co., last year has helped the financial group successfully expand its business in the country’s financial realm. The net profit share of its non-lending units of the group’s total jumped to 33.8 percent this year from 27 percent in 2016, the official added.

Meanwhile, KB Financial Group was the first among the country’s four major financial groups to report its earnings on Thursday. Shinhan Financial Group, Hana Financial Group, and Woori Bank are also expected to report earnings that would beat market estimates, extending gains in earnings for three quarters in a row.

By Park Joon-hyung and Lee Eun-joo

[ⓒ Pulse by Maeil Business News Korea & mk.co.kr, All rights reserved]