Financial Supervisory Service Gov. Lee Bok-hyun (center) talks at an "Invest K-Finance: Singapore IR 2023" event in Singapore on Tuesday, with Hana Financial Group Chairman Ham Young-joo (right) and KB Financial Group Chairman Yoon Jong-kyoo (left) in attendance. (Financial Supervisory Service)

KB Financial Group Chairman Yoon Jong-kyoo said the banking group has been preparing for potential insolvency risks in project financing in the Korean real estate market by increasing its reserve holdings during a global investor relations event held in Singapore on Tuesday.

During the "Invest K-Finance: Singapore IR 2023" event, many global investors voiced concern over the rising risks in the real estate project financing market in Korea.

The loan exposure of four major Korean financial holding companies to real estate project financing has spiked in recent years, posing potential credit risks amid a downturn in the housing market.

The volume of exposure by four major Korean financial holdings firms stood at 31.1 trillion won ($23.49 billion) as of the first quarter of this year.

KB Financial Group had the largest exposure among the four at 11 trillion won, followed by Shinhan Financial Group at 8.8 trillion won, Hana Financial Group at 7.9 trillion won, and Woori Financial Group at around 3.4 trillion won.

Yoon tried to alleviate the investors' concerns.

"KB Financial Group is preemptively building up reserves. While considering all possible variables that may arise we are also in close cooperation with financial authorities to prepare for future uncertainties,” the chairman said.

About 200 key figures from global investment institutions, including the Government of Singapore Investment Corporation and BlackRock, attended the event organized jointly by the Financial Supervisory Service and six Korean financial firms, according to KB Financial Group.

Yoon also talked about the group's goal to stretch out its business further outside of Korea.

"KB Financial Group will leap forward as 'Asia's leading global financial group' based on balanced growth between banking and non-banking sectors. We will strengthen our non-interest income,” he said

"Also, we will do our best to strengthen digital platforms and expand global revenue to reach this goal," Yoon added.

A KB Financial Group official also highlighted the firm's determination to go global during the event.

"Despite the increased uncertainty in the global financial market, KB Financial Group has been growing based on our robust foundation and industry-leading loss absorption capacity. We will continue to strive towards becoming a leading financial group representing Korea," the official said.