Will bank shares soar as semiconductor-driven KOSPI rally takes breather?

An electronic board shows the KOSPI down 3,584.55 points, 0.72 percent lower than the previous session on the trading floor of Hana Bank in Seoul, Monday. Yonhap

By Lee Kyung-min

• Published Oct 14, 2025 7:00 AM KST

Bank shares are emerging as a viable investment choice, buoyed by the benchmark KOSPI taking a breather from months of an artificial intelligence (AI) boom and a semiconductor-driven rally, market watchers said Monday.

The underperforming shares, long dragged down by government moves to curb household lending, have ample room for higher valuations compared to chipmakers, which surged nearly 50 percent over the past month, they said.

According to the Korea Exchange (KRX), the KOSPI surged 9 percent from Sept. 10 to Oct. 10, breaking records to surpass the 3,600 mark for the first time. However, the KRX Bank Index dipped 1.57 percent over the same period.

The bank shares' underperformance is explained by the government’s aggressive moves to rein in household debt growth.

Still, analysts remain optimistic.

NH Investment & Securities raised its target price for KB Financial to 155,000 won ($108), citing robust fundamentals.

Lending still exceeded expectations, aided by declining credit costs. This bodes well for the banks’ earnings in the third quarter, the brokerage said.

Similarly, Hana Securities published a report emphasizing that the recent underperformance of bank shares makes them attractive, especially since the benchmark index is undergoing a correction period.

“While banks have lagged behind the KOSPI growth on a year-to-date basis, the relatively low valuation makes them increasingly attractive,” the report said.

Over the past two weeks, including the weeklong Chuseok holiday, bank stocks remained flat, while Samsung Electronics and SK hynix stocks extended their weeks of rally led by foreign investors’ net buying, the report said.

The two semiconductor powerhouses saw their shares surge after the announcement that they both signed strategic partnerships with OpenAI CEO Sam Altman during his visit to Seoul, Oct. 1. This was part of the U.S. company's global AI infrastructure initiative known as the Stargate Project.

“Over the past two weeks, foreign investors net bought 5.5 trillion won in the KOSPI, but sold about 14 billion won in bank stocks. The corrections in semiconductor stocks will strengthen the appeal of bank stocks, given their decline over the past two weeks,” it said.

Shinhan Financial shares closed at 70,400 won, down 2.22 percent from the previous session. KB Financial, Hana Financial and Woori Financial shares ended at 111,600 won, 85,300 won and 25,150 won, respectively. They were down 1.06 percent, 0.81 percent and 0.79 percent respectively from the previous session.