SOUTH KOREA FIRST TO MARKET

研报英文原文证据摘录

SOUTH KOREA FIRST TO MARKET

Asia Pacific Equity Research

South Korea First to Market 24 July 2026

Top Stories

KB Financial Group (Jihyun Cho) (105560 KS, OW)

Robust 2Q earnings with fee expansion and credit cost reduction; ROE hikes to extend re-rating

rally; OW

KB delivered record-high net profit of W2.0tn, ~5% above heightened Street expectations. While NII softened on a sharper NIM

contraction (~3bps by pre-emptive funding efforts) alongside one-off accounting impacts, the top line proved resilient; (1) a

positive surprise in non-interest income (strong fee growth and higher trading gains) and (2) well-contained credit costs after

conservative provisioning. Strong earnings lifted CET1 to 13.74% (+10bps q/q) in 2Q26, enabling incremental shareholder

returns. On top of the W405bn quarterly cash dividend, management confirmed excess capital of W880bn to be used for 2H26

shareholder return budgets via (1) a W700bn buyback/cancellation over the next six months and (2) the remaining W180bn via

either an additional 2026 buyback or a higher year-end dividend. Including the W2.82tn shareholder return package announced

in Feb-26, we expect ~W3.7tn total shareholder returns in 2026E (c. 55% TSR). Given strong earnings and progressive

shareholder returns, we expect KB to achieve 11%+ ROE in 2026 and 12% ROE by 2028E, implying upside potential on fee

income and credit cost management (vs. 13% company mid-term target). We expect to see a continued re-rating rally

towards over 1.2x fair P/B. We reiterate OW .

Pearl Abyss (Stanley Yang) (263750 KS, UW)

Post-Crimson Desert cooldown: Await DokeV clarity; PT cut to W27K

Despite a 52% pullback from the April peak (vs. KOSPI +29%), which we view as a reset from overly bullish expectations for