The Journey Of KB Bank Transformation: Towards A Stronger Financial Foundation And Sustainable Growth

JAKARTA - PT Bank KB Bukopin Tbk (KB Bank) continues to show its commitment to strengthening financial fundamentals and increasing competitiveness through comprehensive transformation.

After officially becoming part of the largest financial institution from South Korea -- KB Financial Group (KBFG) -- in 2020 after KB Kookmin Bank, which is a banking entity from KBFG, became the controlling shareholder, KB Bank continued to show significant positive developments in various banking aspects.

Along with a thorough transformation, KB Bank managed to improve its financial fundamentals significantly until the end of 2024. Prior to the transformation, the capital adequacy ratio (CAR) was only in the range of 12 percent, but now it is stable at the level of 16 percent, providing greater space for growth.

The quality of assets has also increased, with an underquality credit ratio (LAR) successfully reduced from 65% to only 23 percent. In terms of liquidity, the liquidity adequacy ratio (LCR) has jumped from 90 percent in 2020 to 147 percent, well above the standards set by regulation.

Furthermore, KB Bank's financial performance also showed good growth. Net interest income (NII) jumped more than double, reaching more than IDR 900 billion at the end of 2024 from the previous only around IDR 400 billion in the pre-transformation period.

This increase also had an impact on the net interest margin (NIM), which rose from 0.6 percent to the range of 1.3-1.4 percent thanks to improving asset quality. Furthermore, the centralized credit approval process ensures better risk management, thereby strengthening the bank's position in dealing with market dynamics.

President Director of KB Bank, Tom (Woo Yeul) Lee said, the transformation of KB Bank is a journey full of challenges.

"However, thanks to the full support and trust of shareholders, customers, and all stakeholders as well as the dedication of all employees, currently KB Bank has gone through the most difficult part of the transformation journey and is preparing to achieve positive performance and sustainable growth," he said, in a written statement, Wednesday, February 19.

As part of the transformation, KB Bank is also modernizing the core banking system by adopting a next Generation Banking System (NGBS) that is technology-based. This new system replaces the old infrastructure which previously had limited operational efficiency and service innovation.

The presence of this new system will provide various benefits for customers, including a faster transaction process, higher security, and ease of banking service management. Currently, KB Bank is in the final testing phase with regulators and is targeting full implementation in the early second quarter of 2025.

With a more solid foundation and more sophisticated technology adoption, KB Bank is optimistic that it can achieve positive performance, including recording net profit for performance in 2025. This journey for approximately five years of transformation reflects the dedication of Bank KB in building stronger, sustainable, and customer-oriented banking. KB Bank is ready to face the challenges of the financial industry in the future with a more innovative and resilient approach.