Korea Investment Securities strongly recommended a buy on KB Financial Group, re-evaluating its future growth potential. In an analysis report released on the 24th, the brokerage firm forecasted a positive growth trend in the group's return on equity (ROE) for this year and significantly raised its target price from the previous level of 190,000 won to 205,000 won. This move is interpreted not merely as a simple price adjustment, but as a reflection of the view that the current stock price is undervalued relative to the group's intrinsic value. According to the analysis results, the derived target price-to-book value ratio was 1.31x, which is interpreted as reflecting a future ROE in the 11.5% range 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 group's robust growth is attributed to the simultaneous operation of a solid foundation in banking operations and differentiated capabilities in the securities sector. In particular, first-quarter results recorded a boom far exceeding expectations, with non-interest income of approximately 1.7 trillion won at the center of this success. This figure exceeded by 22% the 1.3 trillion won estimate previously presented by KB Securities, a result also underpinned by the general vitality of the stock market. Fee-related revenues surged by 19% year-on-year, with securities-related revenues expanding by 71%, highlighting the growth momentum of revenue based on trading activity. Additionally, trust revenues grew by 35%, further validating 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 the core deposit base and efforts to optimize funding costs. KB Kookmin Bank recorded a net interest margin of 1.77% in the first quarter, an increase of 0.02 percentage points from the previous quarter, and the group achieved an improvement of 0.04 percentage points at the group level. This stability cannot be explained solely by interest income, but also demonstrated superior performance in handling non-performing loans. The quarterly non-performing loan ratio 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 period last year. This demonstrates that the group is effectively exercising its risk management capabilities during a period of increasing uncertainty in the financial environment.
Additionally, the group's plan to fully burn all 14.26 million shares of treasury stock already acquired next month on the 15th is being received positively. Researchers explained that this decision carries significant importance as it removes early legal and policy uncertainties related to the future disposal of treasury shares. Share buyback and burning is part of a shareholder value return policy, which has the effect of increasing corporate capital efficiency and delivering more value to shareholders. KB Financial is evaluated as an attractive option for long-term investors, as it operates two core business segments—banking and securities—in a balanced manner while simultaneously implementing shareholder-friendly policies such as treasury share management.