KakaoBank, Target Stock Price Set at 52,000 Won

[Asia Economy Reporter Park So-yeon] Daishin Securities maintained a buy rating and a 6-month target price of 52,000 KRW for KakaoBank.

According to FN Guide on the 21st, Daishin Securities stated in a recent report, "Concerns about the slowdown in loan growth are the most prevalent," adding, "With the launch of mortgage loans, normalization is expected from the second quarter."

KakaoBank reduced credit loans to high-quality borrowers, resulting in won-denominated loans of 26 trillion KRW in the first quarter, an increase of only 100 billion KRW compared to the previous quarter.

Researcher Park Hye-jin of Daishin Securities said, "Regarding loan growth, since KakaoBank launched mortgage loans in February, it is difficult to say that the growth in the first quarter was fully reflected," adding, "Initially, it targeted only about 20% of the total market, limited to Seoul under 900 million KRW and the Gyeonggi Province area, but plans to expand this scope in terms of amount, region, and type."

She continued, "There is also an intention to resume loans to high-credit borrowers, and plans to launch loan products for individual business owners starting in the fourth quarter," noting, "In fact, KakaoBank's jeonse and monthly rent loans have been growing at a rate of over 10% each quarter."

Regarding the SOHO loans to be launched in the fourth quarter, KakaoBank plans to independently assess the value of business sites and execute loans accordingly. KakaoBank plans to utilize data from Cash Note, a fintech company providing management services for self-employed business owners, in which it holds a 33% stake.

Researcher Park analyzed, "Regarding net interest margin (NIM), since 95% of KakaoBank's total loans have variable interest rates, the interest rate sensitivity is quite high," adding, "It is estimated that a 25bp (1bp=0.01 percentage point) increase in the base rate will improve NIM by 7-8bp, and a NIM increase of over 10bp is expected in the second quarter."