Korea Investment Securities strongly recommended buying KB Financial Group's stock after reevaluating its future growth potential. In an analysis report released on the 24th, the brokerage firm positively forecasted the group's year-to-date return on equity growth and significantly raised its target price from the previous level of 190,000 won to 205,000 won. This move is interpreted as reflecting the judgment that the current stock price is undervalued relative to the group's intrinsic value, rather than being a mere adjustment. According to the analysis results, the calculated target price-to-book ratio was 1.31 times, which is interpreted as reflecting an expected return on equity of around 11.5% and a cost of equity of 9.2%. The research team evaluated that these figures confirm the group's financial soundness and its ability to generate sustainable profits.
The strong growth of KB Financial is attributed to the simultaneous operation of a solid foundation in its banking business and differentiated capabilities in the securities sector. In particular, the first-quarter results recorded a boom far exceeding expectations, with the core being non-interest income of approximately 1.7 trillion won. This figure exceeded the estimate of 1.3 trillion won previously presented by KB Securities by 22%, a result driven by the overall vitality of the stock market. Fee-related revenues surged by 19% year-on-year, with securities-related revenues expanding by 71%, highlighting the growth of revenue based on trading volumes. Furthermore, trust revenues grew by 35%, demonstrating the reliability of traditional financial services.
The banking sector is also maintaining stable revenue streams, with net interest margins improving thanks to the expansion of its core deposit base and efforts to optimize funding costs. KB Kookmin Bank recorded a net interest margin of 1.77% in the first quarter, rising by 0.02 percentage points from the previous quarter, and the group as a whole achieved an improvement of 0.04 percentage points. This stability cannot be explained by interest income alone; the group also showed excellent performance in bad debt provision processing. The quarterly bad debt rate was recorded at 0.4%, showing a positive trend of improvement by 0.12 percentage points from the previous quarter and 0.14 percentage points from the same quarter last year. This demonstrates that the group is effectively exercising its risk management capabilities during a period of increasing uncertainty in the financial environment.
In addition, the group's decision to fully burn its existing treasury shares of 14.26 million shares, scheduled for next month on the 15th, is being received positively. A researcher explained that this burning decision is of great significance because it removes legal and policy uncertainties related to the future disposal of treasury shares early on. Share buyback burning is part of a shareholder value return policy and has the effect of improving corporate capital efficiency and delivering more value to shareholders. KB Financial is being evaluated as an attractive option for long-term investors because it operates its two core business sectors, banking and securities, in a balanced manner while also implementing shareholder-friendly policies such as treasury share management.