[Click eStock] "JB Financial Group, Top Pick Among Small and Mid-sized Bank Stocks"

[Asia Economy Reporter Oh Ju-yeon] SK Securities stated on the 1st that JB Financial Group has "the greatest upside potential among small and mid-sized bank stocks," lowering the target price to 5,400 KRW but maintaining a 'Buy' rating.

According to SK Securities, JB Financial Group is expected to record a consolidated net profit of 294 billion KRW, down 14% from the previous year, due to asset quality deterioration caused by this year's recession, a decrease in non-interest income due to sluggish financial markets, and a contraction of net interest margin (NIM) caused by falling interest rates.

However, it is explained that it has the greatest upside potential among small and mid-sized bank stocks.

Researcher Koo Kyung-hoe evaluated, "The profit decline in 2020 is a common issue across the industry and is not a weakness unique to JB Financial. Since it has grown through M&A among small regional banks, concerns about capital adequacy have always been raised, but since 2017, it has entered a virtuous cycle where capital adequacy has improved."

He added, "The common equity tier 1 ratio rose to 9.7% at the end of 2019, and it can increase further if the internal ratings-based approach is applied in the future."

Researcher Koo also forecasted that major shareholders welcome dividend expansion, so the dividend payout ratio is likely to increase in the future. However, due to the impact of the recession, the expected dividend for 2021 was lowered from 380 KRW to 350 KRW.

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