[Click eStock] "Kiwoom Securities, Additional Growth Expected in IB Division"

[Asia Economy Reporter Song Hwajeong] KB Securities maintained its 'Buy' rating and target price of 175,000 KRW on Kiwoom Securities on the 11th, citing steady brokerage performance and expected additional growth in the Investment Banking (IB) division.

Kiwoom Securities recorded a consolidated net income attributable to controlling shareholders of 220.8 billion KRW in the second quarter, surpassing market consensus by 17.6%. Seunggeon Kang, a researcher at KB Securities, stated, "This was due to the rapid growth of the IB division and better-than-expected performance of consolidated subsidiaries," adding, "Reflecting this, we have raised the 2021 consolidated net income attributable to controlling shareholders to 858.8 billion KRW, an 8.6% increase from the previous forecast."

In the second quarter, IB and other fee income reached 66 billion KRW, showing a strong growth of 31.8% quarter-on-quarter and 96.4% year-on-year. IB-related profits contributed 20% to the second quarter's net operating income. Additionally, profits from consolidated subsidiaries improved, centered on savings banks, capital companies, and investment associations. Kang explained, "In particular, the capital company is growing rapidly through synergy with the securities IB division, which is positive," and added, "The profit difference between consolidated and separate accounts in the second quarter was 51.2 billion KRW, a significant improvement from 38.8 billion KRW in the previous quarter."

While competitiveness in the brokerage division is maintained, further growth in the IB division is anticipated. Kang said, "The IB division is growing mainly through real estate-related structuring, securing profits from long-term loans via the capital company, and expanding its business scope through the establishment of F&I (handling NPLs). We expect meaningful results in the IB division once a comprehensive financial investment license is obtained."