[Click eStock] "KB Financial, Interest Income Improvement with Rising Interest Rates"

[Asia Economy Reporter Ji Yeon-jin] SK Securities announced on the 22nd that it has raised the target price for KB Financial Group from 56,000 KRW to 64,000 KRW, expecting that the profitability of the interest income segment will improve more than initially anticipated due to rising interest rates.

Goo Kyung-hoe, a researcher at SK Securities, stated, "The negative impact of dividend cuts has disappeared, and rather, expectations for active shareholder returns are increasing. Considering the M&A capacity based on solid capital, the management's positive attitude toward shareholder returns, and the net interest margin (NIM) that improved earlier compared to competitors, we maintain our previous view that KB Financial is the most promising investment among large bank stocks."

The recent rise in market interest rates is expected to expand the net interest margin of banks including KB Financial. SK Securities revised KB Financial's 2021 net interest margin (NIM) estimate from 1.78% to 1.80%, and raised the controlling shareholder net income estimate from 3.6 trillion KRW to 3.72 trillion KRW. The market consensus has steadily increased to SK Securities' estimate of 3.72 trillion KRW.

Researcher Goo explained, "The Financial Supervisory Service's dividend regulations ended in the first half, so they are no longer expected to be a negative factor. Rather, the market is showing growing expectations for active shareholder return policies such as share buybacks and semi-annual dividends. We have raised the expected dividend for this year from 2,200 KRW to 2,400 KRW and reflected this in the target price."