KB Financial Group: 2Q26 earnings to beat market expectations alongside large share buyback program; OW

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KB Financial Group: 2Q26 earnings to beat market expectations alongside large share buyback program; OW

ed fee 2025A 2026E 2027E

income expansion, and 4) well-controlled credit costs, despite one-off Q1 4,581 5,303A 6,040

Q2 4,753 5,397 5,939

provisioning on Joongang Group exposure. Q3 4,643 5,769 6,234

• 2026 guidance. Notably, management guided to : 1) modest NIM expansion, Q4FY 15,9331,974 18,6702,227 21,0372,688

2) 4~5% loan growth (1-2% household, 6-7% corporate), 3) a ~4% rise in

SG&A costs, and 4) credit costs stabilizing at low-to-mid 40bps. The near-term Style Exposure

ROE target (1-2 years) is 11%, while the mid-to-long term target is 13%,

supported by ongoing improvements in the non-bank and overseas businesses.

In terms of shareholder returns, management remains committed to delivering

industry-leading TSR based on its value-up framework.

• Key things to watch: While we anticipate solid earnings for 2Q, investor focus

will likely be centered around the CET1 ratio, which directly translates into the

magnitude of the share buyback/cancellation program for 2H26. After

completing the W1.2trn share buyback/cancellation program as announced

last February, KB will be returning excess capital above the 13.5% CET1 ratio

per its value-up framework. Despite FX headwinds, we anticipate the CET1

ratio to be well-managed thanks to group-wide RWA optimization, and expect

KB to announce a share buyback of W800bn (~55% TSR in 2026E on larger

net profits) at a 13.7% CET1 ratio.

• Upward earnings revisions and PT increase to W220K. With stronger-than-

expected fee income growth, the trajectory of ROE hikes is likely to steepen

to 11% ROE in 2026E and 12% by 2028E. We believe higher ROE and growing

shareholder returns will continue to support KB’s re-rating from the current