Future Operations Optimistic
- Kookmin Bank records 555.2 billion won in profit in 2004

Kookmin Bank announced its 2004 operational results on February 3 before investors and analysts at the Korea Stock Exchange.
Bank officials said the bank will strive to achieve 1.2 percent in ROA and 20 percent in ROE under its profitable and universal banking strategy, which will make the bank stronger and wiser.
The bank will first try to strengthen its professional expertise in order to boost efficiency under a management strategy to divide up the banking operations in detail and hold each unit responsible for its assigned areas. Second, the bank realized its soundness by cleaning up non-performing assets and third, they merged three labor unions into one labor union for the first time following its merger with Korea Housing Bank.
The bank's net profit last year amounted to 555.2 billion won and 2005 looks like a good year for the bank. ROA improved to 0.30 percent last year from -0.52 in 2003. ROE improved to 6.21 percent from -9.64.
The result has been owed to the bank's continuous effort to improve its soundness by reducing loss provisions and expenses. The loss provisions were reduced by 31.1 percent last year to 4.6 trillion won, down by 2.8 trillion won in 2003.
Particularly, the loss provision in the credit card sector reached 1.9 trillion won, down 2.1 trillion won from 2003, turning the sector around by clearing its non-performing assets with chances to make its operation to expect profit.
In the meantime, the loss provision increased 438.4 billion won due to efforts to improve the coverage for non-performing loans. Delinquent interest payments in the credit card and corporate loan sectors went down by 7.1 percent and 0.3 percent respectively. But it was up 0.2 percent in the household loan sector, which has been attributed to increases in delinquencies in the housing loan sector due to the slow down in housing construction, with rising delinquent interest payment rates by 0.6 percent compared to 2003.
Bank officials said they are optimistic that the delinquencies in loans will not grow worse this year with improvements in the household, corporate and credit card sectors and they will try to reduce the rate by sectors during the year as the need arises.
The bank cleared up its bad assets during the fourth quarter of last year to bring down the non-performing asset ratio and NLP Coverage Ratio to 2.64 percent and 87.6 percent to improve the soundness of assets.
Due to falling interest rates, interest income dropped 6.9 percent from 2003, while non-interest income increased 4.9 percent. Fee income from handling bancassurance and mutual fund shares increased 407.3 percent and 64.4 percent. Net interest margin, in the meantime, fell 0.18 percent from 2003 to record 3.62 percent.
On February 3, the board of directors of Kookmin Bank has approved and ratified the non-consolidated financial statements prepared in accordance with Korean GAAP for the fiscal year 2004. After the board of directors' meeting, Kookmin Bank held an earnings conference and released its operating results. The following are key figures released during the conference, and a full version of presentation material is available at Kookmin Bank's website (www.kbstar.com).
The figures in this section are taken from unaudited non-consolidated financial statements. They are subject to change in the course of the audit process by their independent auditor.
Kookmin Bank's financial highlights shows its total assets amounted to 179.7 trillion won as of Dec.31, 2004, up 2.4 percent from 2003. Its loans outstanding totaled 122.7 trillion won, up 0.8 percent from 2003. Total liabilities amounted to 170.6 trillion won, up 2.9 percent from the previous year with its deposits totaling 129.1 trillion won.
The bank's operating income amounted to 763.4 billion won with operating income before provisioning amounting to 5,381.5 billion won and net income 555.2 billion won. nw