[Click eStock] "Korea Financial Group, 4Q Earnings Surprise... Subsidiary Growth Expected"

[Asia Economy Reporter Minji Lee] Yuanta Securities maintained a buy rating and a target price of 9,000 KRW on Korea Financial Group on the 11th, citing a fourth-quarter earnings surprise.

Korea Financial Group recorded a consolidated operating profit of 167 billion KRW in the fourth quarter, surpassing the market expectation of 135.6 billion KRW. Researcher Taejun Jeong said, "Interest income exceeded expectations due to strong performances in savings banks and capital companies," adding, "KakaoBank also posted solid results, turning non-operating income and losses into a profit."

Korea Investment & Securities recorded a separate operating profit of 129 billion KRW, in line with consensus. However, net operating income was 43.5 billion KRW, falling short of the previous estimate of 45.5 billion KRW due to decreases in pure commission income and interest income.

Pure commission income declined across brokerage, asset management, investment banking (IB), and other fee sectors due to intensified overall competition, including sell-downs. Interest income decreased as the growth of real estate project financing (PF) loans slowed, causing the ratio of credit extensions and loans to capital to drop from 85% in the previous quarter to 79%.

Securities trading and product income, as well as other income, showed an increasing trend. Researcher Taejun Jeong explained, "Trading and product income increased favorably due to the stock market rise in December and the decline in bond yields," adding, "Other income was recognized more than expected from distributions, dividends, and rents on held assets due to a decrease in sell-downs."

This year, the company aims for additional profit growth through asset management performance exceeding last year's results. Researcher Jeong advised, "Last year, the company delivered solid results evenly across securities and subsidiaries. While it is encouraging that subsidiaries are growing amid the need to find growth drivers beyond real estate PF, the profit growth target for this year was set assuming a base rate cut, so we need to monitor progress further."

This content was produced with the assistance of AI translation services.