KB Kookmin Bank's Indonesian subsidiary posts first quarterly profit after 5 years

In this file photo, officials of KB Kookmin Bank and its Indonesian subsidiary, KB Bank, formerly PT Bank KB Bukopin Tbk, pose at the Bukopin headquarters on Aug. 25, 2020. Courtesy of KB Kookmin Bank

KB Kookmin Bank’s Indonesian subsidiary, KB Bank, turned a profit in the first three months of this year, five years after the Korean lender acquired a controlling stake acquisition in 2020, the company said Monday.

The Indonesian subsidiary, formerly PT Bank KB Bukopin Tbk, reported a profit of 342.2 billion rupiah (28.74 billion won) for the January to March period, ending a five-year stretch of losses despite KB Bank’s capital injection of 1 trillion won into the entity through 2022.

The dramatic turnaround more than offset the Indonesian entity's annual net loss of over 802 billion won in 2022, followed by another significant net loss of 104.4 billion in the first quarter of last year.

This is expected to help KB Kookmin Bank’s first quarter global net income turn a profit this year. In 2024, the Korean lender's global net income posted a net loss of about 2.56 billion won in the first three months, a significant contraction from the 96.2 billion won in net profit a year prior.

According to the financial market, the Indonesian entity was able to turn a profit, aided by reduced operating expenses, including lower loss reserve provisions.

Net interest income also soared 11.5 percent from the previous year.

The Korean lender rebranded its Indonesian subsidiary as KB Bank in March of last year, strengthening its presence in the Southeast Asian market with new services, including electric vehicle and health care financing.

Also strengthened are agricultural financing and corporate social responsibility initiatives.

The Indonesian entity recently launched its Next Generation Banking System (NGBS), a new core revenue generator seeking faster and more secure digital financial services for Indonesian customers.

The Southeast Asian operation will expand with the appointment of locally sourced manpower, including a local CEO.

The current head, Lee Woo-yeul, will resign as CEO, May 28. Lee was instrumental in establishing the NGBS system.

KB Kookmin Bank operates overseas subsidiaries in China, Cambodia and Myanmar.