[Edaily Reporter Kwon Oh Seok ] Meritz Securities announced on the 29th that it is maintaining its “Buy” rating on BNK Financial Group Inc.(138930)but lowering its target price from 26,000 won to 24,000 won.

Jo Ah-hae, an analyst at Meritz Securities, explained, “Second-quarter earnings were weak,” but added, “The CET-1 (Common Equity Tier 1) ratio, which forms the foundation of the shareholder return policy, is being maintained stably within the target range of 12.0–12.5% despite asset growth.”
She added, “Based on this, expectations for an aggressive shareholder return policy remain valid,” noting, “We expect the bank to meet the criteria for high-dividend companies eligible for separate taxation of dividend income this year, as it did last year, and anticipate a 50 billion won share buyback during the second half of the year.”
Previously, second-quarter net income attributable to controlling shareholders came in at 200.4 billion won (down 35.2% year-over-year), falling 20% short of the consensus estimate. Analyst Cho pointed out, “This was due to a larger-than-expected decline in the NIM (net interest margin) and one-time interest expenses of 44.0 billion won incurred from the acquisition of external stakes in real estate funds.”
Specifically, interest income rose by only 2.2% year-over-year due to the one-time interest expense. A settlement loss of 44 billion won resulting from the acquisition of shares in the BNK Yeouido Core Office Fund was recorded as an interest expense. Non-interest income increased by 59.8% year-over-year. This was driven not only by higher gains on the sale of loan receivables but also by expanded commission income, primarily from the subsidiary securities firm, amid a favorable stock market environment.
Researcher Cho added, “The CET-1 ratio stood at 12.14%. It showed a downward trend due to an increase in RWA (risk-weighted assets) resulting from the growth in loan assets.”