KB Financial Group on Thursday announced plans to cancel 14.26 million shares worth 2.3 trillion won ($1.55 billion) in May, one of the largest such moves in the industry, as the firm posted a record first quarter earnings.
The cancellation, equal to 3.8 percent of shares outstanding, comes despite a 1 1/2-year grace period under the revised Commercial Act's mandatory treasury share cancellation rule. KB also approved an additional 600 billion won share buyback and cancellation program to be completed by July.
The group said the decision reflects its intent to move quickly on shareholder returns, while aligning with broader policy efforts to advance Korea's capital market.
The capital return announcement came alongside first quarter earnings that beat expectations. KB said net profit rose 11 percent from a year earlier to 1.89 trillion won, above the 1.79 trillion won average estimate compiled by market data tracker FnGuide and marking a record high for the industry.
KB said stronger net fee income across key subsidiaries, including banking, securities and asset management, drove the result despite market volatility from geopolitical uncertainty, higher rates and a weaker won.
Non-banking affiliates accounted for 72 percent of total fee income and 43 percent of net profit, highlighting the group's balanced portfolio.
Net fee income rose 45.5 percent from a year earlier to 1.36 trillion won, while net interest income edged up 2.2 percent to 3.35 trillion won.
The group's common equity Tier 1 ratio stood at an industry-leading 13.63 percent, while return on equity rose 0.9 percentage point to 13.94 percent.
Among key units, KB Kookmin Bank's net profit rose 7.3 percent to 1.1 trillion won, while KB Securities' climbed 93 percent to 347.8 billion won, helped by buoyant capital markets.
jwc@heraldcorp.com
