[Click e-Stock] "Record-High Quarterly Net Profit... IBK Industrial Bank on Track This Year"

Increase in Non-Interest Income and Conservative Provisioning Prove Effective
Interest Income Declines... Dividend Rises

IBK Industrial Bank achieved its highest-ever quarterly net profit in the first quarter of this year. Despite a decline in interest income, the bank managed to recover its performance thanks to an increase in non-interest income and a reduction in provision expenses. Analysts note that the bank's historically conservative approach to provisioning will allow it to maintain stable results going forward.

On the 28th, Kiwoom Securities maintained its 'Buy' investment rating and a target price of 20,000 won for IBK Industrial Bank, citing these factors. The previous trading day's closing price was 14,970 won.

In the first quarter of this year, IBK Industrial Bank reported consolidated net profit of 814.2 billion won, an increase of 3.8% compared to the same period last year. During this period, interest income decreased by 2.9%, but provision expenses fell by 7.7% and non-interest income surged by 91%, driving improved performance. The significant turnaround in non-interest income was largely due to a shift from a 49.4 billion won foreign exchange translation loss in the first quarter of last year to a 3.3 billion won profit this year. The bank is projected to achieve a full-year consolidated net profit of approximately 2.81 trillion won, a 5.5% increase from the previous year.

On a standalone basis, the bank's net profit was 760.4 billion won, up 6.9% year-on-year. However, IBK Investment & Securities and IBK Pension Insurance posted net profits of only 12 billion won and 5.2 billion won, respectively, each shrinking to about half of last year's level. In contrast, IBK Capital's net profit increased by 4.6% year-on-year to 52.4 billion won.

The net interest margin (NIM) was 1.63%, down 4 basis points (bp; 1bp=0.01%) from the previous quarter. This decrease occurred even though interest-earning assets grew slightly, as interest income fell by 2.4%. The non-performing loan (NPL) ratio remained steady at 1.34% compared to the previous quarter, while the delinquency rate rose by 12bp to 0.92%. Kim Eungap, a researcher at Kiwoom Securities, explained, "The delinquency rate typically fluctuates by about 10bp per quarter, so this is not a cause for major concern," adding, "Given the low level of asset disposals and write-offs in the first quarter, asset quality remains stable."

Dividend expectations were also highlighted. The dividend per share for the 2024 fiscal year is set at 1,065 won, up 8.4% from the previous year and marking an all-time high. The dividend yield was calculated at 6.9%. Based on the bank's standalone financial statements, the payout ratio rose by 2.5 percentage points year-on-year to 35%.