JB Financial Group: Four Key Investment Merits

Align Partners Goes Activist on Seven Banking Group Companies in Korea

Align Partners' Corporate Activism on Korean Banks: A Media Presentation and Q&A Session

South Korean Banks: Continuing Systemic Improvement Though It Pays to Be Selective

KB Financial : Diversifying into Higher Margin Areas

South Korean Banks: Remain Cheap, if Not Unspectacular

Hana Financial: Scores Well, Is Cheap, but Some Doubts Linger

Global Bank Equity Specialist, Creative Portfolios

Paul Hollingworth

Global Bank Equity Specialist

Creative Portfolios

Equity Bottom-Up

This year, we have written about KB Financial and Hana Financial in South Korea. Today is the turn of a smaller lender, the underrated JB Financial Group.<a href="https://www.smartkarma.com/entities/jb-financial-group-co-ltd" target="_blank" data-smartkarma-citation="entities:16104:1" rel="noopener">Jb Financial Group (175330 KS</a> is primarily a SME lender (44% of portfolio). Mortgages make up 23% of loans and other retail (including personal credit and auto financing, especially used cars) account for 27%. JB Financial Group incorporates Jeonbuk Bank (JB), Kwangju Bank (KB), JB Woori Capital (JBWC), Phnom Penh Commercial Bank, and JB Asset Management.JB Financial Group results at Q320 were generally highly constructive. Our PH Score™ shows that the bank is making headway on Profitability, on Efficiency, on Liquidity (LDR) and on headline Asset Quality. Capital Adequacy, as with Provisioning, reveals a mixed picture with Equity/Assets showing some erosion while CET1, Tier1, and TCR all moving higher. While the top-line shows a flat Net Interest Income, supported by much lower Interest Costs, non-interest Income (fees &amp; commissions, securities, leases, cards) was vibrant. Expansion of Comprehensive Income and Net Profit was solid, if not unspectacular, though given the context was not at all discouraging. In general, we have a broadly positive picture though we are mindful of some Balance Sheet risks relating to a still high Debt/Equity and a relatively shallow Liquid Asset ratio.<div class="content-highlight">A FV of 3%, a PBV of 0.32x, an Earnings Yield of 29.5%, and a Dividend Yield of 5.4% are certainly not unappealing. The bank comfortably passes our theoretical threshold of a FV of 10% and a PBV of &lt;1x. A PH Score™ of 9.1 is in the top decile globally. According to our VFM system (Valuation, Fundamentals, Momentum), JB Financial resides in the top decile of our global universe along with one of our favoured lenders, KB Financial.</div>

This year, we have written about KB Financial and Hana Financial in South Korea. Today is the turn of a smaller lender, the underrated JB Financial Group.Jb Financial Group (175330 KS is primarily a SME lender (44% of portfolio). Mortgages make up 23% of loans and other retail (including personal credit and auto financing, especially used cars) account for 27%. JB Financial Group incorporates Jeonbuk Bank (JB), Kwangju Bank (KB), JB Woori Capital (JBWC), Phnom Penh Commercial Bank, and JB Asset Management.JB Financial Group results at Q320 were generally highly constructive. Our PH Score™ shows that the bank is making headway on Profitability, on Efficiency, on Liquidity (LDR) and on headline Asset Quality. Capital Adequacy, as with Provisioning, reveals a mixed picture with Equity/Assets showing some erosion while CET1, Tier1, and TCR all moving higher. While the top-line shows a flat Net Interest Income, supported by much lower Interest Costs, non-interest Income (fees &amp; commissions, securities, leases, cards) was vibrant. Expansion of Comprehensive Income and Net Profit was solid, if not unspectacular, though given the context was not at all discouraging. In general, we have a broadly positive picture though we are mindful of some Balance Sheet risks relating to a still high Debt/Equity and a relatively shallow Liquid Asset ratio.A FV of 3%, a PBV of 0.32x, an Earnings Yield of 29.5%, and a Dividend Yield of 5.4% are certainly not unappealing. The bank comfortably passes our theoretical threshold of a FV of 10% and a PBV of &lt;1x. A PH Score™ of 9.1 is in the top decile globally. According to our VFM system (Valuation, Fundamentals, Momentum), JB Financial resides in the top decile of our global universe along with one of our favoured lenders, KB Financial.

Jb Financial Group

JB Financial: Underrated