[Click eStock] Korea Financial Group, Q1 Earnings Expectations

[Asia Economy Reporter Hwang Junho] Yuanta Securities maintained the target price for Korea Financial Group at 130,000 KRW on the 5th. They set this target expecting the company to deliver results exceeding expectations in the first quarter of this year.

Yuanta Securities forecasted Korea Financial Group's operating profit for Q1 at 369.6 billion KRW. They analyzed that the increase in revenue from rising trading volumes at the beginning of the year and the stock market surge would outweigh the decline in operating profit due to rising interest rates at the end of the quarter. Although non-operating profit is expected to decrease due to the disappearance of valuation gains on KakaoBank shares from the previous quarter, the increase in net operating income is expected to offset this. Additionally, KakaoBank's Q1 profit is anticipated to grow approximately 40% quarter-on-quarter, driven by improved net interest margin from rising market interest rates and seasonal reductions in provisions.

Net fee income is projected to increase by 47.8% year-on-year, though it is expected to decrease by 2.1% compared to the previous quarter. By segment, brokerage commission income is expected to rise quarter-on-quarter, while asset management and IB (Investment Banking) divisions are forecasted to decline compared to the previous quarter. Furthermore, due to foreign currency asset management regulations, it is anticipated that the IB sector across the industry will find it difficult to recover to pre-COVID-19 levels. Accordingly, the future direction of net fee income is expected to be determined by brokerage commissions.

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