SEOUL, South Korea--(BUSINESS WIRE)--JB Financial Group (KRX:175330) reported net income of KRW83.5 billion for the third quarter 2017. Cumulative net income was KRW241.7 billion, up 28.5% year on year.
Chief Financial Officer Jae-Yong Lee said in the earnings call, “JB Financial Group’s YTD3Q2017 cumulative controlling interest net income came in at KRW170.8 billion, which marked a 25.6% increase year on year, mainly on the back of improved net interest margin, robust expansion of interest bearing assets from continued loan growth, and decrease in credit cost. Controlling interest net income for the quarter was KRW59.6 billion, improving for two consecutive quarters. It reflects that our profit generation capability has fundamentally advanced. Lastly, our ROA and ROE have both continued to climb, and this trend is expected to continue in the future.”
YTD3Q2017 net interest income was KRW842.8 billion, 14.8% up year on year. In line with the Group’s strategic focus this year on risk-adjusted profitability, the household loans recorded relatively higher growth, which has helped drive solid growth in interest-bearing assets. Group NIM also went up by 2bps from second quarter, primarily driven by the improved profitability of group housing loans and better loan-deposit margins from reduced funding costs. Of note, the Group NIM was 2.47% and 2.27% for bank affiliates, which are both relatively high levels in Korean banks.
Asset quality indicators remained strong during the quarter supported by improved soundness of loan portfolio and strengthened risk management. NPL ratio fell below 1% to 0.96% for the first time while delinquency ratio continued to in-line with historical levels, recording 0.91%. Such improvements in asset quality helped lower credit cost ratio to 0.34%, reaching historical trough.
The Group’s Common Equity Tier 1 (CET1) ratio continued to improve during the quarter, reaching 8.58%, compared with 8.30% in the previous quarter. The CET1 ratio exceeded the Group’s third quarter target by 28bps on the back of active risk-weighted asset (RWA) management coupled with strong net income generation.
Chief Financial Officer Lee added, “By the end of next year, we expect to comfortably achieve target CET1 ratio of 9.3-9.6%. Based on such continued improvement in capital ratios, we plan to actively strengthen our shareholder return policies by increasing dividend payout. JB Financial Group’s payout ratio in 2016 considering the KRW15 billion of share repurchase was about 16%, which is relatively low compared to sector average. However, we plan to continuously raise the payout ratio going forward considering robust pace of capital ratio improvements.”
About JB Financial Group
Kim Han, the Chairman of JB Financial Group, has been expanding the Group by acquiring JB Woori Capital, Kwangju Bank and JB Asset Management. The Chairman also successfully penetrated into Seoul Metropolitan Area with Jeonbuk Bank and Kwangju Bank. Recently, the Group managed to strengthen global footprint by expanding overseas such as Cambodia, Vietnam and Myanmar. Since the establishment of the holding company, Kim has grown the Group’s asset size from KRW15 trillion to KRW50 trillion as of June 2017.
The third quarter business result materials and replay of the earnings call are available on English page of www.jbfg.com, under Investor Relations, Business Result.
This press release contains forward-looking statements. These statements are based on the current beliefs and expectations of JB Financial Group’s management and are subject to significant risks and uncertainties. Actual results may differ from those set forth in the forward-looking statements. JB Financial Group does not undertake to update the forward-looking statements to reflect the impact of circumstances or events that may arise after the date of the forward-looking statements.