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Fundamental View
AS OF 11 Feb 2026KB Financial Group has grown steadily through the acquisitions of non-bank companies in Korea and small banks in Indonesia and Cambodia. Its banking subsidiary, Kookmin Bank, operates the largest branch network in Korea, with a particularly strong presence in the retail market. This makes it a systemically important bank, with strong potential government support if needed.
The group has a good track record, and its large mass-market franchise gives it a strong customer base. It has a well-diversified business and the highest CET1 ratio, reserve cover, and net interest margin among the four major financial groups.
Business Description
AS OF 11 Feb 2026- KB Financial Group (KBFG) is a well-diversified and well-run group. Its main subsidiaries, in addition to Kookmin Bank (KB), are Kookmin Card, KB Insurance, KB Securities, KB Capital (leasing), and KB Asset Management.
- KB was the result of several mergers after the Asian economic crisis of the late 1990s. Its main predecessors were Citizen's National Bank and Housing & Commercial Bank, both retail-focused banks that have given it the leading position in Korean retail banking.
- For the near term, the group doesn't expect further M&A. It has looked for growth overseas, focusing on Indonesia (where it has taken a 67% stake in Bank Bukopin) and Cambodia (it took a 100% shareholding in Prasac, a micro-finance lender, over 2020-21). It also bought Prudential Financial's Korean insurance business in 2020, which was subsequently merged with KB Insurance.
Risk & Catalysts
AS OF 11 Feb 2026As one of Korea’s “Big Four” financial groups, we believe that KBFG would likely receive governmental support if needed.
Substantial preemptive provisions led to higher credit costs than most peers in FY25. KBFG has the highest NPL coverage ratio among the Big 4.
KBFG has the highest NIM among the four FGs, largely thanks to the highest NIM at Kookmin bank among the Big 4 banks. However, its NIM trend lagged peers in FY25.
KBFG is expanding by business line and overseas with a focus on Indonesia and Cambodia—markets with more favourable demographics, growth potential, and profit margins than Korea but also more risk.
Loan growth faces headwinds from tighter mortgage regulation and soft corporate demand.
Key Metric
AS OF 11 Feb 2026| KRW bn | FY21 | FY22 | FY23 | FY24 | FY25 |
|---|---|---|---|---|---|
| Pre-Provision Profit ROA | 1.14% | 1.05% | 1.36% | 1.37% | 1.40% |
| ROA | 0.69% | 0.57% | 0.65% | 0.68% | 0.75% |
| ROE | 10.2% | 8.8% | 9.1% | 9.7% | 10.9% |
| Provisions/Loans | 0.31% | 0.45% | 0.73% | 0.45% | 0.50% |
| NPL ratio | 0.33% | 0.34% | 0.57% | 0.65% | 0.63% |
| CET1 Ratio | 13.5% | 13.2% | 13.6% | 13.5% | 13.8% |
| Equity/Assets | 7.3% | 7.9% | 8.2% | 7.9% | 7.6% |
| Net Interest Margin | 1.83% | 1.96% | 2.08% | 2.03% | 1.97% |
CreditSight View Comment
AS OF 09 Feb 2026KBFG is the largest of the “Big 4” financial groups in S Korea, and its banking subsidiary, Kookmin Bank, enjoys the strongest franchise with a particularly strong retail, as it was a government retail bank that was privatized in 1995. As a systemically important bank, government support is assured. KBFG has a good track record and a well-diversified business. Capital standing is the key strength, with the current highest group CET1 ratio. The NPL coverage ratio has declined significantly in recent quarters but remained the highest among the Big 4. The bank LCR is low in the ~104 area but NSFR good in the ~118% area. It delivered the highest returns among the Big 4 in FY25. We have an Underperform recommendation on it on tight valuations.
Recommendation Reviewed: February 09, 2026
Recommendation Changed: October 31, 2025
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