Korea Financials and Fintech Finding Value as Defensives

The report highlights Korean banks and insurers as attractive defensive investments due to solid dividend yields and government-driven 'Value Up' initiatives. While banks are in a valuation re-rating phase, insurers are gaining traction through improving underwriting quality and regulatory tailwinds.

Key Takeaways

• 1.Korean financials are viewed as strong defensive assets due to resilient earnings and 'Value Up' initiatives like higher payouts and dividend tax exemptions.
• 2.KR banks are in a late-stage valuation re-rating with Total Shareholder Return (TSR) levels expected to reach approximately 50% in 2025.
• 3.Interest in non-life insurers is rising as underwriting quality improves and regulatory measures like commission caps are expected to stabilize earnings.

Table of Contents

• We see KR financials as defensives given solid dividend yields
• KR Banks taking a pause but we see further upside
• KR insurers gaining traction with improving fundamentals and Value Up potential
• Limited interest in fintech until the next round of updates on stablecoin
• Exhibit 1: Summary valuation table for Korea Financials/Fintech coverage
• Disclosure Appendix

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