Daishin Securities reaffirmed its "Buy" rating and target price of 190,000 won on KB Financial (KOSPI: 105560) on the 30th, describing the current level as an attractive entry point.
The brokerage projects KB Financial's second-quarter net profit attributable to controlling shareholders at 1.9165 trillion won, up 1.3% from the previous quarter and 10.2% year on year. Daishin attributes the strength to KB Financial's non-banking franchise, which it considers the most well-rounded among South Korea's four major financial holding groups.
Non-interest income is forecast to reach 1.6550 trillion won, rising 0.2% quarter on quarter and 15.6% year on year. Average daily trading volume in the equity market exceeded 90 trillion won in the second quarter — a 21.4% increase from the prior quarter — boosting both securities brokerage revenues and banking fee income.
KB Financial has approved a 1 trillion won capital injection into its securities subsidiary, KB Securities. The funds are earmarked for expanding retail credit limits and allocating capital across investment banking and trading operations. On the back of this, Daishin expects KB Securities' net profit to reach 1.2 trillion won in 2026.
KB Financial's total exposure to defaults at Jungang Group stands at 90 billion won, of which 59 billion won relates to six affiliates that have applied for a court-supervised debt workout. Provisions set aside in the current quarter are expected to amount to roughly 15 billion won.
KB Financial's Common Equity Tier 1 (CET1) ratio — a key measure of a bank's capital strength — rose to 13.71% at end-June from the previous quarter, despite headwinds from a weaker won. Remaining capacity for additional share buybacks in the second half of the year is estimated at 76 billion won, though Daishin applies a more conservative figure of 60 billion won.
Looking further ahead, total shareholder returns for 2026 are projected to approach 3.4 trillion won, comprising cash dividends of 1.6 trillion won and share buybacks of 1.8 trillion won. Based on the closing share price of 153,700 won on 29th June, the stock trades at a price-to-book ratio of 0.85 times.