[Click eStock] "KB Geumyung, Balanced Growth Expected in Interest Income and Non-Bank Sectors"

IBK Investment & Securities Report

[Asia Economy Reporter Minji Lee] IBK Investment & Securities maintained a buy rating and a target price of 74,000 KRW for KB Financial Group on the 10th. This decision was based on the expectation that the stock price could be revised upward, considering steady growth in interest income and the non-bank sector, as well as the commitment to dividends.

The consolidated net profit for the second quarter was 1.2 trillion KRW, marking consecutive quarterly net profits in the 1.2 trillion KRW range following the first quarter. This represents a 45% increase compared to the same period last year on a cumulative basis for the first half of the year. Kim Eun-gap, a researcher at IBK Investment & Securities, stated, “Although there is a base effect due to last year's provision expenses, interest income has increased to a new level, and the non-bank sector has additionally grown, resulting in a combined effect. Interest income rose by 15% compared to the first half of last year, while provision expenses decreased by 26%.”

The profit share of the non-bank sector remains above the mid-40% range at 45%. KB Securities posted a net profit of 153.3 billion KRW in the second quarter, down 31% from the previous quarter, but showed a growth trend of approximately 191% compared to the same period last year on a cumulative basis for the first half.

The group's net interest margin (NIM) for the second quarter was 1.82%, maintaining the level of the previous quarter. Although a slight increase was expected, it was somewhat disappointing; however, bank won currency loans increased by 1.7% compared to the previous quarter, and group loan receivables rose by 3.2%, showing a favorable performance in terms of interest income. Group interest income increased by 4.4%, and the operating expense ratio for the first half fell significantly to 47% from 54.7% last year. Researcher Kim Eun-gap said, “Not only cost management but also the increase in core profits had a significant impact,” adding, “The normal level is expected to stabilize downward below 50% in the future.”

Researcher Kim Eun-gap also said, “The price-to-earnings ratio (PER) based on this year's consolidated net profit is 5.1 times, and the interim dividend was announced as a dividend per share (DPS) of 750 KRW,” adding, “The current DPS forecast for this year is 1,900 KRW, which is related to regulatory issues, but considering the profit growth trend and dividend commitment, it is expected to be revised upward in the future.”

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