The Biggest Beneficiary of Interest Rate Hikes, Why You Must See It in July | Choi Jeong-wook, Head of Hana Securities Research Center

Summary

Choi Jeong-wook, Head of Hana Securities Research Center, presents a bullish call on Korean bank stocks for July, driven by interest rate hikes, ELS provision reversals, and strong 2Q earnings. He names KB Financial and Shinhan Financial as top picks and sees short-term catch-up potential in deeply undervalued regional banks IM Financial and BNK Financial.

• Korean bank stocks poised to rally on rising rates, sector rotation, and underperformance catch-up
• 2Q earnings for KB Financial and Shinhan Financial expected to beat consensus by a wide margin
• Hong Kong ELS provision reduction from 1.4T won to 600B won acts as a positive catalyst
• KB Financial may post near 2 trillion won net profit, Shinhan around 1.7 trillion won
• IM Financial and BNK Financial trade at steep PBR discounts and are near-term catch-up candidates
• Bank stocks have underperformed the KOSPI by about 50 percentage points year-to-date
• Net interest margins continue to improve despite minor policy headwinds on high-value mortgages