Kookmin Bank

However, a delayed recovery of Kookmin's Indonesia-based subsidiary, PT Bank KB Bukopin Tbk (Bukopin), will continue to weigh on the bank's overall asset quality. We estimate Kookmin's nonperforming assets (NPA) ratio, reflecting stage 3 credit-impaired loans under Korean International Financial Reporting Standards (K-IFRS), was about 0.8% at end-2022, broadly stable from a year ago. This is modestly higher than that for domestic commercial bank peers, mainly due to significant NPA in Bukopin. The stable outlook on Kookmin reflects our view that the bank will maintain its adequate capitalization over the next 18-24 months, backed by a moderate growth appetite and steady profitability. We believe the bank's efforts to manage risks and maintain adequate underwriting standards will help prevent material deterioration

...Kookmin Bank's focus on risk management and underwriting standards will alleviate asset quality pressure. The bank has a diversified loan portfolio, with limited exposure to cyclical large corporate sectors. Its loans to small and midsize enterprises (SMEs) are also highly collateralized. However, a delayed recovery of Kookmin's Indonesia-based subsidiary, PT Bank KB Bukopin Tbk (Bukopin), will continue to weigh on the bank's overall asset quality. We estimate Kookmin's nonperforming assets (NPA) ratio, reflecting stage 3 credit-impaired loans under Korean International Financial Reporting Standards (K-IFRS), was about 0.8% at end-2022, broadly stable from a year ago. This is modestly higher than that for domestic commercial bank peers, mainly due to significant NPA in Bukopin. Kookmin's steady profitability and moderate growth will support its capital buffer. Net interest margin (NIM) expansion, although by a smaller magnitude than in 2022, will likely offset pressure on credit costs from...

Full Report