EquitiesCommercial BanksKoreaJaewoongWon*Analyst, Korea Financials & FintechTheHonkong and Shanghai Banking Corporation Limited.Seoul Securities Branchjaewoong.won@kr.hsbc.com+82 237068770* Employed by a non-US affiliate of HSBC Securities (USA) Inc, and isnot registered/qualfied pursuant to FINRA regulations.Hesitant bulls of summerThe 20th edition of the EM Sentiment SurveyClick to viewIssuer of report:The Hongkong and ShanghaiBanking Corporation Limited,Seoul SecuritiesBranchView HSBC Global Research at:https:/www.research.hsbc.com
Source: Company data, HSBC estimatesExhibit 4. Expected loan growth (q-o-q) of Korean regional banks6%4%2%0%-2%1Q222Q223Q22Source: Company data, HSBC estimates
Source: Company data, HSBC estimatesExhibit15.EstimatedC/lratio*trendBNK FG60%55%50%45%40%35%30%2021202220232024 2025e 2026e 2027e*Cost income ratioSource: Company data, HSBC estimates,
Source: Company data, HSBC estimatesExhibit 14. NPL ratio trendsJB FG1.8%1.5%1.2%0.9%0.6%0.3%0.0%2018201920202021202220232024Source: Company data
For BNK FG, we introduce 2027 estimates and adjust 2025-26e EPS/BPS reflecting changes inour earnings estimates and shareholder return plans. We also adjust 2025-27e EPS and BPS foriM FG and JB FG reflecting changes in our estimates for both earnings and treasury sharecancellations.Exhibit 16. BNK FG - EPS/BPS changes(KRW)2025e2026e2027ePrevious2,7443.170n/aCurrent2,5112.9453,390Change (%)-8.5%-7.1%nlaPrevious35,75339,600n/aCurrent32,69036,32040.969Change (%)-8.6%-8.3%n/aSource: HSBC estimatesExhibit 17. iM FG - EPS/BPS changes(KRW)2025e2026e2027ePrevious2,8643.3003,658Current2,8303,2433,521Change (%)-1.2%-1.7%-3.7%Previous34,40238,73243,830Current34.00537,81242.093Change (%)-1.2%-2.4%-4.0%Source: HSBC estimatesExhibit 18. JB FGG- EPS/BPS changes(KRW)2025e2026e2027ePrevious3.8224,3995,081Current3,8274,4265,106Change (%)0.1%0.6%0.5%Previous28,50631,93237,254Current28,45231,81837.016Change (%)-0.2%-0.4%-0.6%Source: HSBC estimates
Valuation and risksCurrent price:BNK FGKRW14,400138930KSTarget price:KRW17,000BuyUpside:+18.1%iM FGCurrent price:KRW14,240139130KSTarget price:KRW17,000BuyUpside:+19.4%JB FGCurrent price:KRW23,850175330KSTarget price:KRW29,000BuyUpside:+21.6%Note: Priced as of 8 July 2025. *Employed by a non-US afiliate of HSBC Securities (USA) Inc, and is not registered/qualfed pursuant to FINRA regulations.Source: Bloomberg, HSBC estimates
Financials & valuation: BNK Financial GroupFinancialstatementsYear to12/2024a12/2025e12/2026e12/2027eP&L summary (KRWbn)Net interest income2,9772,9773,0553,077357488560596Net fees/commissionsTotal income3,3343,4653,6153,673Operating expense1,5671,5751,6071,639Bad debt charge891885806710Other1161021101109921,1061,3131,435HSBC PBTPBT9921,1061,3131,435Taxation-242-297-361-395-57Minorities and others-22-18-62728791895978Atributable profit728791895978HSBC attributable profitBalance sheet summary (KRWbn)Customer loans113,946118,751124,333130,176Total assets152,471159,277166,763174,601107.855112,222117,496123.018Customer deposits141,323147,257154,003161,055Total liabilities10,69911,12311,86312,649Ordinary equity10,69911,863HSBC ordinary equity11,12312,649Avg. interest earning assets82,50984,98487,53490,160Ratio, growth & per share analysisYearto12/2024a12/2025e12/2026e12/2027eY-on-y % changeTotal income824.31.63.9Operating expense0.52.02.0PBT13.311.518.79.3EPS13.811.117.315.1BPS-3.56.711.112.8Asset4.64.54.74.7Loan2.84.24.73.03.0IEA3.03.0Ratios (%)Cost/income ratio394.31.6Customer loans/deposits2.02.0Per share data (KRW)EPS reported (diluted)2,2612,5112,9453,390HSBC EPS (diluted)2,2612,5112,9453,390DPS640650820950BPS30,64032,69036,32040,969BPS (including goodwill)30,64032,69036,32040,969Source: Company data, HSBC estimates8
Financials & valuation:iM Financial GroupFinancial statementsYear to12/2024a12/2025e12/2026e12/2027eP&L summary (KRWbn)Net interest income1,6861,6111,6201,625396554674696Net fees/commissions2,320Total income2,0822,1652,294Operating expense1,0781,1121,1451,164Bad debt charge740375367336Other-11012253678790832HSBC PBTPBT253678790832Taxation-51-177-217-229Minorties and others13-39-57-60462516543Atributable profit215HSBC attributable profit215462516543Balance sheet summary (KRWbn)Customer loans65,70167,51870,63573,897Total assets94,149101,036105,785110,75759,80761,56364,45767,486Customer depositsTotal liabilties87,94394,45498,740103,2385,9916,3656,8287,302Ordinary equity5,9916.8287,302HSBC ordinary equity6,365Avg. interest earning assets52,61254,19155,81657,491Ratio, growth & per share analysisYear to12/2024a12/2025e12/2026e12/2027eY-on-y % changeTotal income-4.44.05.91.14.13.03.21.7Operating expensePBT-52.5168.216.65.2EPS-43.8119.714.68.6BPS-1.69.511.211.3Asset0.87.34.74.7Loan5.32.84.64.61.5IEA3.03.03.0Ratios (%)51.851.449.950.2Cost/income ratioCustomer loans/deposits109.9109.7109.6109.5Per share data (KRW)EPS reported (diluted)1,2882,8303.2433,521HSBC EPS (diluted)1,2882,8303,2433,521DPS500680810950BPS31
