[Click eStock] "KB Financial, 2Q Estimated Net Profit 1.5 Trillion Won... Growth Rate Recovery Expected in Second Half"

[Asia Economy Reporter Lee Jung-yoon] Hana Financial Investment maintained a buy rating and a target price of 83,000 won for KB Financial Group on the 28th, forecasting that the company's net profit for the second quarter of this year will exceed consensus estimates.

KB Financial's estimated net profit for the second quarter is about 1.5 trillion won, expected to increase by 12% compared to the same period last year. The loan growth rate for the second quarter is only 0.5%, expected to fall below 1% for the second consecutive quarter following the first quarter, and the net interest margin (NIM) improvement is estimated to be around 6 basis points (bp, 1bp=0.01%), slightly lower than competing banks. Jeong-wook Choi, a researcher at Hana Financial Investment, explained, "While the scale of additional provisions will be a key factor, the NPL (non-performing loan) coverage ratio is high, so the amount of additional provisions relative to total loans is expected to be lower than other banks," adding, "The one-time gain from the sale of the KB Insurance building, estimated to be around 130 billion won, is also a major factor behind the strong performance." He further added, "The net profit for the first half of this year is expected to approach about 3 trillion won."

Additionally, due to the withdrawal of Citibank Korea from the domestic consumer finance business, KB Kookmin Bank and Toss Bank have been selected as partner banks for the refinancing of personal credit loans worth 8 trillion won, which will be implemented from the second half of the year. Regarding this, researcher Choi said, "Of course, this is not mandatory, so it is difficult to say that refinancing will be done exclusively through these two banks, but considering Citibank's customer recommendations and various promotions such as preferential interest rates offered by partner banks, a significant portion is likely to be refinanced through the partner banks."

He added, "Citibank refinancing assets can be exempted from the DSR (debt service ratio) regulation, and since KB Financial's loan growth rate was low in the first half, this presents a good opportunity to increase loans, so loan growth is expected to somewhat recover in the second half."

Among bank stocks, KB Financial has shown the weakest price performance. This is because, amid concerns about an economic recession causing a general downturn in the banking sector, KB Financial, which has a high holding ratio by foreign and domestic institutional investors, was negatively affected by supply and demand factors. Figures such as loan growth rate and NIM improvement also slightly underperform the industry average, indicating a lack of clear short-term momentum. However, researcher Choi stated, "Since the relative stock weakness is not due to structural fundamental problems, the possibility of continued excessive decline is considered low."

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