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RETAIL BANKING | Tony Chua, Korea

KB Financial returns to green in a huge turnaround

Main focus is to boost non-banking divisions as the South Korean banking market faces saturation.

KB Financial Group reported on Friday it swung to a net profit in the second quarter from a loss a year ago, and analysts see the firm's prospects as bright as it increases its focus on non-banking businesses.

"In the upcoming quarter, KB is expected to maintain stellar results, helped by margins," said Hwang Seok-kyu, an analyst at Kyobo Securities.

KB,the parent of the country's top mortgage lender Kookmin Bank, reported a net profit of 817 billion won ($776.9 million) for the three month period ending June compared with a 217 billion won ($206.52 million) loss in the prior-year period, after reducing provisioning costs by more than one-third from a year ago.

The profit rise also stemmed from a recent stake sale in Hyundai Engineering & Construction, analysts said.

Sixteen analysts polled by Thomson I/B/E/S had estimated an average profit of 802 billion won ($763.33 million) for the second quarter.

Amid an already-saturated banking market, the company is exploring services such as insurance and credit cards.

View the full story in Reuters.

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