"KB Financial Group Expected to Post Record-High Third-Quarter Earnings; Target Price Raised"

[Financial News] Hana Securities expects KB Financial Group to post record-level earnings in the third quarter as well. It maintained its “Buy” rating and raised its target price from 220,000 won to 235,000 won.
Choi Jung-wook, an analyst at Hana Securities, said on the 14th, "KB Financial Group’s estimated third-quarter net profit is approximately 2.06 trillion won, up 22.2% year on year and 3.4% from the previous quarter. It is expected not only to significantly exceed the market consensus but also to set another record for the highest quarterly net profit ever."
The record earnings are expected to be driven by a 1.7% quarter-on-quarter increase in banks’ won-denominated loan balances in the third quarter, the disappearance of 130 billion won in interest expenses related to fund non-controlling interests, and room for selling, general and administrative expenses to decline from the previous quarter due to lower securities-sector performance bonuses.
A decline in the exchange rate is also expected to improve the common equity tier 1 (CET1) ratio. Choi said, "The exchange-rate effect alone is expected to raise the CET1 ratio by approximately 30 to 40 basis points. The CET1 ratio is expected to be around 13.95% in the third quarter, and a ratio approaching 14% is more than sufficient to support an expansion of the shareholder return ratio."
He added, "Interest-rate momentum is emerging for bank stocks amid expectations of a recent increase in the United States’ policy rate. If market conditions, which have been pressured by net foreign selling, gradually improve, KB Financial Group’s ‘leading bank premium’ is likely to strengthen. We maintain it as our top pick in the sector."
[email protected] Choi Jung-wook Reporter