[THE INVESTOR] KB Financial Group, Korea’s leading banking group, seeks to set up a universal banking system to provide a wide variety of financial services from insurance to investment services, the firm said on June 23.

After acquiring Hyundai Securities in April, the operator of KB Kookmin Bank plans to diversify its business portfolio to depart from its role of offering traditional financial products such as deposits and installment savings.

Wealth management business and commercial investment banking will become the group’s focused area, it said.



The move comes as local financial firms hunt for new revenue sources as interest rates hit record lows. Local banks’ net interest margin tumbled to a record low of 1.55 percent in the first quarter of this year.

KB Financial Group said it will benchmark the successful merger between the Bank of America and Merrill Lynch which overhauled their business structure to shift focus to wealth management and corporate investment banking which has helped improve its bottom line. Its net profit soared to US$4.83 billion in 2014 from $4.01 billion in 2008.

By purchasing the country’s No. 3 brokerage firm Hyundai Securities, KB Financial Group came one step closer to becoming a universal bank as it has the nation’s second-largest lender KB Kookmin Bank and No. 4 nonlife insurer KB Insurance under its wing.

The group will focus on creating an integrated group for wealth management by combining its manpower specialized in the sector from its affiliates.

By Park Han-na (hnpark@heraldcorp.com)