[Asia Economy Reporter Park Jihwan] Hyundai Motor Securities emphasized on the 4th that BNK Financial Group is expected to post solid results in the fourth quarter of this year, and double-digit earnings growth is possible next year. The investment opinion 'Buy' and the target price were raised by 6.9% from the previous 7,200 KRW to 7,700 KRW.
Kim Jinsang, a researcher at BNK Financial Group, stated, "The fourth-quarter net profit is estimated to be 54.8 billion KRW, exceeding the market expectation of 51.9 billion KRW." As special factors during the quarter, voluntary retirement costs and proactive COVID-19 provisions are expected to be executed at around 40 billion KRW each.
It is analyzed that the recurring profitability remains favorable as the non-bank affiliates continue to perform well. In particular, with the improvement in the shipbuilding and automobile industries and a favorable real estate market, the regional economy is on a recovery trend, creating a positive environment for asset soundness and loan growth.
Researcher Kim Jinsang forecasted, "With the implementation of the group’s internal rating system in the first quarter of next year, the capital ratio is expected to improve further, enabling more flexible growth and capital policy conditions."
Regarding this year's performance, it is expected to decline compared to the previous year due to margin decline, proactive COVID-19 provisions, and voluntary retirement costs, falling short of recurring profitability; however, a 12.1% earnings increase is anticipated next year.
Researcher Kim emphasized, "With steady asset growth and defense of the net interest margin (NIM), net interest income is expected to return to an upward trend," adding, "Proactive provisioning keeps credit costs stable, and strengthening of non-bank affiliates is expected to sustain a solid non-interest income stream."
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