Bank of America analyst Jeehoon Park has made a bold move, upgrading Korean banks Shinhan Financial Group (NYSE:SHG) and Woori Financial Group (NYSE:WF) shares to Buy from Neutral. His move is fueled by the expectations that large banks will benefit from enhanced investor interest in Korea as a recovery in export growth looms on the horizon.

The upgrade is backed by the conviction that stronger exports lead to a manufacturing recovery and eventually stronger economic growth momentum, thereby benefiting the banking sector through an expansion of the loan book, margins, and lower credit costs, as noted by Park in a recent communication.

Despite the fact that earnings are under pressure in the near term, Park firmly believes that investors would rally to Korean banks if they detect signs of stronger economic activity. He is calling for an earnings recovery in 2025.

It’s worth noting that SA’s Quant system and the average sell-side analyst both rate SHG and WF as a Hold.