The Korea Herald

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KB Financial bets big on diversification

By Shin Ji-hye

Published : Aug. 7, 2014 - 20:55

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KB Financial Group, the nation’s largest financial group, expects its persistent efforts toward business diversification to help it overcome a recent crisis involving extensive data leaks.

The diversification scheme is mainly focused on weaning the group off its traditional banking businesses to branch out into non-banking sectors, such as insurance and loan brokering.

One example is its launch of KB Capital in March, following its acquisition of Woori Financial.

Only five months in, KB Capital has shown a solid performance by raising 15 billion won ($14 million) in consolidated sales, according to the firm.

Other efforts include the group’s latest bid to acquire LIG Insurance, for which KB Financial is awaiting final approval from authorities. Once it is completed, KB Financial’s nonbanking sector will account for up to 30 percent of its total assets, up from the current 20 percent. 
KB Financial Group chairman Lim Young-rok (left) shakes hands with volunteers who participated in the group’s latest corporate contribution campaign to hand out free bicycles in Vietnam. (KB Financial Group) KB Financial Group chairman Lim Young-rok (left) shakes hands with volunteers who participated in the group’s latest corporate contribution campaign to hand out free bicycles in Vietnam. (KB Financial Group)

“The takeover of LIG Insurance would help KB Financial Group offer even more diversified services including life insurance and indemnity insurance products,” said a group spokesman. “This, in turn, will have a synergy effect with other affiliates such as KB Kookmin Bank.”

In spite of the nationwide data breach that wreaked havoc on the local financial sector, KB Financial Group managed to post an operating profit of 765.2 billion won in the first half of this year. The figure reflected a 33 percent increase over the same period last year.

The company plans to up its offensive in the second half, officials said.

To do this, KB Financial Group will push to completely overhaul its corporate culture. The group set up an innovation committee in April to get rid of outdated business practices. All departments are now busy drawing up action plans to put the reforms into practice, the company said.

“We hope to wisely overcome our latest crisis and put to good use the lessons we have learned from it in order to grow into a bigger and more stable company,” said the company spokesperson.

By Shin Ji-hye (shinjh@heraldcorp.com)