(Bloomberg) -- Bank stocks in South Korea are headed for their best quarter in more than six years as investors put faith in the government’s corporate reform pledges.

The Korea KRX Banks Index, a gauge of 10 financial stocks in the benchmark Kospi and small-cap Kosdaq indexes, has advanced 19% this quarter, the most since the three months through June 2017. The gain outstrips that of the Kospi, which has risen 3.4% in the same period. 

Investors have been lured back into bank shares on speculation the government’s “Corporate Value-up” program will boost shareholder returns. Details of the plan - designed to improve valuations through better management governance - will be finalized in May, Korea Exchange said this month.

“As the first-quarter earnings are expected to see some provisions and ELS-related losses, their outlook will depend on what follows up with the ‘Value-up’ program,” said Seol Yongjin, an analyst at SK Securities Co., referring to compensation for losses tied to equity-linked securities.

Still, there’s likely to be some profit taking in the short-term, with investors such as BNP Paribas having already sold some of their bank shares in block trades after the rally, Seol said.

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