[Asia Economy Reporter Park Jihwan] BNK Investment & Securities maintained a 'Buy' rating on KB Financial Group on the 3rd, expecting its quarterly controlling shareholder net profit to exceed 1 trillion KRW, and raised the target price by 20.7% from the previous 58,000 KRW to 70,000 KRW.
Kim In, a researcher at BNK Investment & Securities, stated, "The first quarter controlling shareholder net profit is expected to increase by 44.8% year-on-year to 1.0562 trillion KRW," adding, "The continued rise in quarterly net interest margin (NIM), significant growth in interest income from the acquisitions of Prudential, Cambodia's Prasac, and Indonesia's Bukopin Bank, as well as solid performances from subsidiaries in securities, cards, insurance, and capital sectors, have contributed to strong non-interest income."
Researcher Kim projected first quarter interest income to rise 10.1% from last year to 2.5865 trillion KRW. This is attributed to the repricing effect of funding costs and margin management focused on profitability, along with healthy KRW loan growth centered on small and medium enterprises and jeonse (key money) loans.
The profit growth is also supported by the effects of acquiring domestic life insurance companies and overseas banks. Kim emphasized, "With efficient control of cost increases related to M&A, the controlling shareholder net profit is expected to reach a record high of 3.9 trillion KRW," and added, "Based on the highest capital ratio among bank stocks, shareholder-friendly policies such as increased dividend payout ratio and share buybacks and cancellations are also expected to be strengthened."
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