KB Financial Group Co., South Korea‘s No. 2 banking group, said Friday its second-quarter earnings fell 70.4 percent from a year earlier on squeezed profit margin and one-off valuation loss from its investment in a Kazakhstani bank.
Net profit amounted to 163.5 billion won ($147 million) in the April-June period, compared with 551.6 billion won the previous year, the group said in a regulatory filing. In the first half, the group’s earnings declined 50.3 percent to 575 billion won.
The group‘s bottom line was sharply lower than a consensus of 318.6 billion won in a poll made by Yonhap Infomax, the financial news arm of Yonhap News Agency.
KB Financial is among major local banking groups, which have suffered from falling profitability as a long streak of low rates squeezed their lending margin and a series of corporate overhauls led them to set aside higher loan-loss reserves.
The group said the weaker earnings came as its net profit margin, a gauge of profitability, declined and posted a one-off valuation loss from its stake in Bank CenterCredit in calculating the reserves.
The group’s net profit margin, a key barometer of profitability, came in at 2.69 percent in the second quarter, down from 2.73 percent in the previous quarter.
