S. Korea Financials: In Waiting Mode

Research evidence excerpt

S. Korea Financials: In Waiting Mode

Idea

May 18, 2026 07:35 PM GMT

Morgan Stanley & Co. International plc, Seoul Branch+MS. Korea Financials | Asia Pacific Joon Seok

Equity Analyst

In Waiting Mode Joon.Seok@morganstanley.comHeewon Choi +82 2 399-4934

Heewon.Choi@morganstanley.com +82 2 399-4836

Korean banks have relatively underperformed KOSPI since the Minseo Kang

1Q26 earnings season, overshadowed by the IT and Industrials ResearchMinseo.Kang@morganstanley.comAssociate +82 2 399-4816

sectors. Leveling up should continue but at a slower pace from

S. Korea Financials

here, with more differentiation between the banks. Asia Pacific

Industry View Attractive

Key Takeaways Please refer to related reports below:

2026 South Korea Mid-Year Outlook: Mettle to

We maintain our Attractive Industry View on Korean financials with banks being

Sail Rough Seas (12 May 2026)

preferred slightly over the insurers.

Global Banks & Exchanges: Digital Rails, Real

Banks should continue to be relatively defensive stocks as earnings and total

Economics: Digital Assets & the Future of

shareholder returns provide support with SFG and KFG now preferred stocks

Wholesale Banking (14 May 2026)

South Korea: National Pension Strategic

1Q26 results demonstrated the resiliency of banking group earnings with

Allocation Decision Key for 2H26 (17 May 2026)

operational trends for 2026 still looking favorable despite an overall tightening

Shinhan Financial Group: 1Q26 Review: Core

policy bias.. We expect NIM to be on an upward trend while non-banks should

Operations On the Way Up (23 Apr 2026)

provide the ballast. However, results and guidance fell short in giving us confidence

KB Financial Group: 1Q26 Review: Strong

that through-cycle sustainable ROE could show a meaningful level-up.