IBK Industrial Bank reported a consolidated net profit of 689.5 billion won for Q2, down 0.7% from 694.4 billion won in the same period last year, the bank announced on July 27. The decline was attributed to expanded foreign exchange valuation losses due to sharp currency fluctuations and increased loan loss provisions. For the first half, consolidated net profit fell 4.4% year-on-year to 1.44 trillion won, while standalone net profit decreased 9% to 1.21 trillion won from 1.33 trillion won a year earlier. Despite the profit decline, the bank minimized the impact through improved interest income from asset growth and reduced funding costs, along with gains from securities-related operations. The results come as the bank aggressively expanded SME lending in alignment with the government's productive finance policy, pushing its SME loan market share to a record 24.6%.
IBK Reports Q2 Net Profit Decline of 0.7%
On a standalone basis, IBK's Q2 net profit totaled 541.5 billion won, down 4.4% from 566.7 billion won a year earlier. According to Yonhap Infomax Consensus (screen number 8031), analysts had forecast Q2 net profit to decline 6.61% year-on-year to 648.5 billion won.
For the first half, interest income increased 6.2% year-on-year to 3.77 trillion won from 3.55 trillion won in the same period last year. Non-interest income, however, plummeted 54.2% to 184.2 billion won from 402.3 billion won, cut nearly in half due to foreign exchange valuation losses of 126.6 billion won resulting from sharp currency appreciation during the first half.
The bank's net interest margin (NIM) stood at 1.59% in Q2, down 0.01 percentage point from 1.60% in the previous quarter. Fee income rose 2.5% year-on-year to 323 billion won, while securities-related gains increased 3.2% to 381.3 billion won.
SME Loan Balance Reaches Record 270 Trillion Won
IBK's SME loan balance grew 8.1 trillion won (3.1%) from year-end to reach 270 trillion won as of the first half. The portfolio consisted of 137.8 trillion won in operating capital and 132.2 trillion won in facility financing. The expansion reflects the bank's efforts to increase SME lending in line with the government's productive finance policy.
The bank's market share in SME lending climbed to a record high of 24.6%. By industry, manufacturing accounted for the largest share at 52.1%.
Bank President Jang Min-young had previously stated at a press conference in May marking his 100th day in office: "We will proactively take on areas that commercial banks do not cover," pledging to expand support for small and medium-sized enterprises.
Asset Quality Metrics Show Mixed Performance
As of June 30, IBK's substandard-and-below loan ratio improved 1 basis point to 1.27% from 1.28% at the end of March. However, the credit cost ratio increased 3 basis points to 0.46% from 0.43% in March, reflecting delayed improvement in SME business conditions due to high exchange rates and high interest rates.
The total delinquency ratio rose 0.03 percentage point year-on-year to 0.94%.
The bank's BIS capital ratio stood at 14.88% at the end of Q2, up 0.10 percentage point from year-end but down 0.05 percentage point from the previous quarter. The common equity tier 1 (CET1) ratio reached 11.56%, up 0.08 percentage point from year-end and 0.05 percentage point from the previous quarter.
Bank Declares Quarterly Dividend of 210 Won Per Share
IBK resolved to pay a quarterly dividend of 210 won per share on July 27. The dividend record date is July 31.
A bank official stated: "Through organizational restructuring in the second half, we have secured momentum to support productive finance and AI transformation. We plan to further strengthen shareholder returns through this first-ever quarterly dividend."
FAQ
What was IBK Industrial Bank's net profit for Q2?
IBK Industrial Bank reported a consolidated net profit of 689.5 billion won for Q2, down 0.7% from 694.4 billion won in the same period last year.
Why did IBK's net profit decline in Q2?
The decline was attributed to expanded foreign exchange valuation losses due to sharp currency fluctuations and increased loan loss provisions.
What is IBK's SME loan market share?
IBK's SME loan market share reached a record high of 24.6%, with total SME loan balance of 270 trillion won as of the first half.
