[Edaily Reporter KIM YOON-JEONG ] KB Securities expects KakaoBank Corp.(323410)’s second-quarter net profit to meet market expectations and has maintained its “Buy” investment rating and target price of 33,000 won.

On the 3rd, Kang Seung-geon, an analyst at KB Securities, stated, “We maintain our ‘Buy’ investment rating and target price of 33,000 won for KakaoBank Corp.,” adding, “Following the first quarter, we expect a significant improvement in the net interest margin (NIM) in the second quarter, accompanied by an improvement in the loan-to-deposit ratio.”
The target price was calculated by applying a price-to-book ratio (PBR) of 2.2x to the 12-month forward book value per share (BVPS) of 14,959 won. It reflects a sustainable return on equity (ROE) of 15.2% and a cost of equity (COE) of 9.0%.
KB Securities projected KakaoBank Corp.’s second-quarter standalone net income at 136.1 billion won. This represents a 7.8% year-over-year increase and is in line with market consensus. ROE is expected to be 8.1%.
Analyst Kang explained, “We expect won-denominated loans to increase by 1.2% quarter-over-quarter, and the net interest margin (NIM) to improve by 6 basis points quarter-over-quarter,” adding, “This is because the impact of rising loan rates will be accompanied by the positive effect of an improved loan-to-deposit ratio.”
Accordingly, net interest income is projected to rise 21.7% year-over-year and 3.8% quarter-over-quarter.
Non-interest income is expected to decline significantly year-over-year. Analyst Kang analyzed, “While fee income is expected to increase year-over-year due to higher fees related to advertising and the ‘Bogeumjari’ housing loan program, poor performance in net investment income resulting from rising market interest rates is expected to persist in the second quarter, following the first quarter.”
The credit cost ratio (CCR) is projected to be managed at 52 basis points, a level similar to last year’s. The growth strategy was also evaluated positively. Analyst Kang noted, “This is because, amid ongoing household loan regulations, the bank is securing additional growth opportunities by entering the real estate-secured loan market for self-employed individuals,” adding “Although the enactment of the Framework Act on Digital Assets has been delayed, the company possesses competitiveness in digital wallets and has implemented the financial infrastructure for stablecoins. Considering the potential for use as a payment method through partnerships with banks in Thailand and Indonesia, we believe this will serve as an opportunity for technology-driven fintech companies,” he stated.
He continued, “While there are some shortcomings in terms of growth and investment income, we view positively the company’s ongoing efforts to drive growth, such as expanding into promising loan segments, pursuing additional growth areas through the acquisition of Capital, and making proactive investments to prepare for the adoption of blockchain financial infrastructure.”