[Click eStock] "Korea Capital Expected to Sustain Growth through New Business Ventures"

[Asia Economy Reporter Hyunseok Yoo] KB Securities forecasted on the 14th that Korea Capital will continue to grow through new business ventures.

Korea Capital operates financial businesses such as corporate finance, lease finance, and retail finance under the Specialized Credit Finance Business Act. Established in 1989, it welcomed the Military Mutual Aid Association as its major shareholder in 2001. As a domestic capital specialized credit finance company without deposit functions, it raises funds through corporate bonds and CP issuance.

Last year, it recorded operating revenue of 206.2 billion KRW and operating profit of 42 billion KRW, representing increases of 14.6% and 56.4% respectively compared to the previous year. KB Securities explained that the continuous growth in performance was due to the expansion of high-profit loan assets and an increase in asset size through fund procurement.

KB Securities emphasized the need to focus on continuous asset size growth and improved profitability based on risk management and reduced funding costs. Researcher Im Sang-guk of KB Securities said, "The increase in asset size is accelerating through portfolio diversification centered on loan assets, with total assets reaching 2.6778 trillion KRW as of last year, up 18.3% from the previous year," adding, "With entry into new businesses such as auto finance and stock loans, mid- to long-term growth drivers have also been secured."

He explained, "Due to the credit rating upgrade, it is possible to procure operating funds under favorable conditions this year," and added, "With the credit rating upgraded from A- (positive) to A0 (stable) in November last year, a funding cost reduction of about 40bp (0.4%) compared to before is expected," emphasizing, "We focus on the virtuous cycle structure of risk management leading to performance improvement from reduced funding costs, decreased delinquency rates, and increased cash holdings."

Researcher Im highlighted, "As of 2020, the dividend per share was 25 KRW, with a dividend yield of 4.2%," and stressed, "Future shareholder-friendly dividend policies and increased dividends due to improved performance are expected."