Korea Banks: Share price momentum to strengthen ahead of eventful 2Q26 earnings season; extended re-rating in large FGs

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Korea Banks: Share price momentum to strengthen ahead of eventful 2Q26 earnings season; extended re-rating in large FGs

J P M O R G A N Asia Pacific Equity Research

09 July 2026

Korea Banks

Share price momentum to strengthen ahead of eventful

2Q26 earnings season; extended re-rating in large FGs

Korea banks have outperformed the market since July, up 8% (vs. KOSPI -15%). Diversified Banks

ACGoing into the 2Q earnings season, we see a constructive set-up for Korean Jihyun Cho

financials. 2Q26 results should be broadly solid on (i) resilient NII with modest (82-2) 758-5480

NIM uplift and steady loan growth, (ii) stronger non-interest income on capital jihyun.cho@jpmorgan.com

markets-related fees, and (iii) contained credit costs with provisioning broadly in J.P.BranchMorgan Securities (Far East) Limited, Seoul

line with full-year guidance. Beyond earnings, we expect shareholder returns to be

Tae Wook Kim

the key catalyst: as prior buybacks conclude in July, another round of buyback/ (82-2) 758-5719

cancellation announcements looks likely—potentially larger at KB and Shinhan taewook.kim@jpmorgan.com

on stronger earnings prints—while Hana could also draw attention on a Value-Up J.P. Morgan Securities (Far East) Limited, Seoul

Branch

update (introducing a shareholder return formula and refreshed ROE targets,

broadly converging toward KB/Shinhan). With large FGs still trading at <1.0x P/B Katherine Lei

(852) 2800-8552

(vs. 11–12% mid-term ROE trajectory), we see ample upside from here and katherine.lei@jpmorgan.com

recommend investors accumulate KB, Shinhan and Hana (all OWs) to capture J.P. Morgan Securities (Asia Pacific) Limited/ J.P.

an extended re-rating rally on sustainable ROE trending higher lifting fair P/B. Morgan Broking (Hong Kong) Limited