[Click eStock] "IBK's Challenge for Record-Breaking Performance Again, Dividend Appeal"

Non-Bank Subsidiaries Expected to Improve Performance
Dividend Payouts Also Forecast to Increase Slightly

IBK Industrial Bank of Korea is expected to achieve record-high performance this year. This analysis is based on improvements in the bank and its subsidiaries' earnings, along with a potential increase in dividend payouts.

On the 11th, Kiwoom Securities raised IBK's target stock price by 11.1% to 20,000 KRW, citing these factors. The closing price the previous day was 15,260 KRW. The investment rating of 'Buy' was also maintained.

Last year, IBK's consolidated net profit was 2.6738 trillion KRW, a slight decrease of 0.1% compared to the previous record high. It is interpreted that the decrease in interest and non-interest income was offset by a reduction in provision expenses, maintaining the net profit scale. A similar level of net profit has been maintained over the past three years.

The net interest margin (NIM) remained at 1.67%, consistent with the third quarter of last year. The non-performing loan (NPL) ratio was 1.32%, similar to 1.31% in the third quarter. The delinquency rate fell by 8 basis points (1bp=0.01%) to 0.80% compared to the third quarter of last year. The provision expense ratio improved to 0.47% from 0.68% the previous year. This reflects the effect of conservatively setting aside additional provisions in the past, enhancing loss absorption capacity. It is analyzed that this will also contribute to stabilizing future performance.

Last year, the bank's standalone net profit increased by 1.4%. Among non-bank subsidiaries, larger entities such as capital, securities, and pension insurance showed improved performance, but savings banks continued to incur losses. Other special purpose companies (SPCs) also showed poor results, causing the overall non-bank net profit to decrease by 11.6%. With increased profits in the banking sector and improved performance of non-bank subsidiaries, consolidated net profit is expected to increase by 3.6% this year.

Kim Eun-gap, a researcher at Kiwoom Securities, explained, "Considering the increase in bank profits and the strengthened shareholder return atmosphere, the dividend per share is expected to increase by 5-6% from last year's 984 KRW." He added, "The introduction of a quarterly dividend system is also planned, aiming for a charter amendment in the first half of this year."