The amount of debts owed by households and businesses in Korea was more than twice Korea’s gross domestic product (GDP). About half of the nation’s companies were unable to pay even interest on their debts with money they earned from sales, revealing their vulnerability.The ratio of private credit t
The overseas non-performing loan portfolios of the four major banks in South Korea surged to nearly 300 billion won in just one year. The rapid increase raised concerns as delinquency amounts spiked due to the impact of high-interest rate shocks, prompting warnings about the management of overseas f
Debt, or credit, for both households and businesses surged to a historic peak, surpassing twice the gross domestic product (GDP) during the third quarter of this year. With an increasing number of businesses relying on non-banking institutions after the COVID-19 pandemic, coupled with a rising house
It has been revealed that the outstanding corporate loans of the five major commercial banks in South Korea have surged by over 65 trillion won since the beginning of this year. With the government and financial authorities seeking to restrain household loans, there is increasingly intense competiti
Moody’s, the international credit rating agency, issued a forecast today stating that the exposure and risk levels of domestic banks to real estate are significant. The agency warned that the materialization of “tail risk” depends on the conditions of the real estate market. Tail risk refers to a ty
LG Energy Solution has withdrawn its plans to build a joint venture battery plant in Turkiye with U.S.-based Ford and Turkiye-based Koc Group. Instead, the company will produce battery cells at an existing idle facility and supply them to Ford.LG Energy Solution announced on Nov. 11 that it is withd
According to data obtained from the Financial Supervisory Service by Rep. Seo Beom-soo, a member of the National Assembly’s Land, Infrastructure, and Transport Committee, on Nov. 1, the outstanding balance of housing mortgage loans for foreigners, offered by the four major commercial banks -- KB Koo
As corporate loan delinquencies rise, the increasing volume of non-performing loans in banks has eroded their capacity to absorb losses, leading to a deterioration in their financial health.According to Kookmin Bank, Shinhan, Hana, and Woori banks on Oct. 30, the balance of non-performing loans (NPL
In the era of high interest rates and low growth, the rapidly increasing corporate debt has become another critical concern for the South Korean economy. Particularly worrisome is the growing prevalence of zombie companies that are keeping themselves afloat through debt, primarily among small and me
In the span of a year, bad loans in corporate lending from the five major banks have surged by over 400 billion won (US$300.98 million), heading towards the 3 trillion won mark. With the corporate sector facing economic challenges, there are concerns that the fierce competition in corporate lending
Last year, South Korea’s private debt growth rate relative to its gross domestic product (GDP) was reported to be the highest in the world. While households and businesses are reducing their debt in most countries in the aftermath of COVID-19, South Korea is drawing attention for moving in the oppos
The author is an analyst for Shinhan Securities. He can be reached at kw.eun@shinhan.com -- Ed.1Q23 earnings reviewKakaoBank posted net profit of controlling interest of KRW101.9bn (+52.5% YoY) for 1Q23, beating our estimate by 15.4% and the market consensus by 23.3%. Interest rate declines led to v
The author is an analyst of NH Investment & Securities. He can be reached at junsup@nhqv.com -- Ed.IBK’s 1Q23 NP (excluding minority interest) missed consensus on large-scale provisioning and a drop in NIM. While NIM should rebound from 2Q23, provisioning burden is to linger for now.Lower TP to W13,
The author is an analyst of NH Investment & Securities. He can be reached at junsup@nhqv.com -- Ed.While internal and external environments may be unfavorable, WFG shares are trading at a historic low. We note that: 1) the firm’s DY is above 10%; and 2) share buyback is expected.Conditions may be di
The author is an analyst of NH Investment & Securities. He can be reached at junsup@nhqv.com -- Ed.While the current interest rate, exchange rate, and regulation environment appears unfavorable, HFG’s share price is excessively undervalued.External environment uncertain, but share price excessively
The author is an analyst of NH Investment & Securities. He can be reached at junsup@nhqv.com -- Ed.SFG is facing the double whammy of a shrinking market and weak 1Q23E earnings. We believe that it is time to expand shareholder return via a share buyback/retirement program.Lower TP, but maintain as t
The author is an analyst of KB Securities. He can be reached at cygun101@kbfg.com. -- Ed. Opportunity exists in 2023 but needs verification via earnings to be reflected in valuations— KakaoBank reported 2022 standalone NP of KRW263.1bn (+28.9% YoY). — NIM rose 50bps, driving up net interest income a
The author is an analyst of NH Investment & Securities. He can be reached at sw.kang@nhqv.com. -- Ed. While the Fed looks to be aiming for a soft landing with a hawkish slant, the TB market is pricing in a hard landing coupled with a dovish stance. Despite a likely upward revision in the Fed’s termi
The author is an analyst of NH Investment & Securities. He can be reached at junsup@nhqv.com. -- Ed. Sector share prices are being weighed on as of late by recession and regulation risk fears. But, we point out that banking players’ fundamentals remain sound. Moreover, we see 2022E DY reaching its h
The author is an analyst of NH Investment & Securities. He can be reached at junsup@nhqv.com. -- Ed. Major financial groups are forecast to deliver robust earnings in 2H22, building on 1H22. And, backed by base rate hikes and higher market interest rates, NIM at banking players is highly likely to j