[Click e-Stock] "Defensive Stocks in Volatile Times... KB Financial Group's Shareholder Returns in Focus"

Uncertainty over Shareholder Returns Resolved

Controlling Net Income This Year Up 17.8% Year-on-Year

According to recent analyses from the securities industry as of July 30, 2026, KB Financial Group is expected to become the most stable investment destination amid current domestic and international uncertainties, thanks to its well-balanced portfolio of banking and non-banking businesses and industry-leading capital strength.

On July 29, according to iM Securities, researcher Seol Yongjin stated, “KB Financial Group possesses top-tier competitiveness in both its banking and non-banking sectors, allowing for stable profits regardless of macroeconomic conditions.” He maintained a “Buy” investment rating and a target price of 205,000 won.

Uncertainty regarding shareholder returns resolved through capital surplus reduction

Positive performance improvement is expected to continue in the second half of the year. Researcher Seol said, “Solid profit trends will be sustained, driven by the reversal of provisions for equity-linked securities (ELS) and improved deposit-loan margins due to the implementation of management compensation at the non-life insurance subsidiary.”

Concerns about reduced dividends from subsidiaries due to the issue of surrender value reserve provisions are also expected to ease. He explained, “Starting with this year’s year-end dividend, the ambiguity over distributable profit will be resolved by utilizing a tax-exempt dividend source secured through the reduction of 7.5 trillion won in capital surplus. The remaining amount designated for shareholder return, 180 billion won, will be used for year-end dividends.”

He added, “Going forward, cash dividends will utilize the reduced capital surplus, while distributable profits secured from subsidiary dividends will be used for share buybacks and cancellations. Therefore, the issue surrounding distributable profit is not a cause for particular concern.”

Controlling net income forecast at 6.869 trillion won... Expected to exceed consensus

KB Financial Group’s controlling net income this year is expected to reach 6.869 trillion won (a 17.8% increase year-on-year), slightly exceeding the market consensus. The group net interest margin (NIM) is also forecast to improve by about 2 basis points (1bp = 0.01 percentage point) thanks to higher benchmark interest rates, which is viewed positively.

Although brokerage commissions and related fees may decline from the first half of the year due to increased stock market volatility, non-interest income is expected to be supported mainly by trust fees and credit card merchant fees. Seol projected, “The credit cost ratio will be managed at a stable level of 0.48% (down 0.02 percentage points year-on-year), as property-related burdens are alleviated.”

The total shareholder return rate for KB Financial Group is projected to reach 53.9% this year (with dividends at 26.2% and share buybacks at 27.7%). The shareholder return yield stands at about 6% (with a dividend yield at 3.1%).

Researcher Seol emphasized, “While a significant increase in share price may be difficult to expect, the group demonstrates stability based on active shareholder returns and a balanced portfolio. Given the expansion of volatility in the equity markets, it is advantageous to view KB Financial Group as a defensive stock.”

Regarding investment risks, he added, “It is important to monitor both the sustainability of profits at the securities subsidiary and the potential for increased credit costs due to rising interest rates and tighter regulations.”

This content was produced with the assistance of AI translation services.