iM Financial Group reported Q2 net profit of 141.1 billion won, a 9% decline from 155 billion won in the same period last year, the company announced on the 27th. The earnings missed the market consensus of 159.1 billion won by approximately 11%, attributed to increased provisions related to Jungang Media Group, cost increases including education tax rate changes effective this year, and weaker securities-related income due to sluggish KOSDAQ market performance. iM Financial is a major Korean financial holding company with subsidiaries including iM Bank, iM Securities, iM Capital, and iM Life.
iM Financial Group Misses Q2 Consensus by 11% on Provision Increases
For the first half of the year on a cumulative basis, iM Financial's net profit reached 295.6 billion won, down approximately 4.4% from 309.3 billion won in the same period last year. According to Yonhap Infomax consensus data (screen number 8031), the market had expected iM Financial's Q2 net profit to reach 159.1 billion won. Market observers attributed the underperformance to additional provisions related to Jungang Media Group and reduced securities-related income stemming from weak KOSDAQ market conditions. An iM Financial official stated, "Net profit declined slightly year-over-year due to non-recurring cost increases such as education tax rate changes that took effect this year, and increased provision amounts following asset growth."
Despite the decline in net profit, iM Financial's total operating profit and total assets increased. The company's Q2 total operating profit reached 559.4 billion won, up approximately 3.3% from 541.3 billion won in the same period last year. Total assets including trust assets stood at 116.9224 trillion won as of the end of Q2, an increase of about 8.8% year-over-year.
iM Financial's capital ratios improved while profitability metrics weakened. The company's return on assets (ROA) and return on equity (ROE) as of the end of Q2 were 0.57% and 9.43% respectively, down 0.07 percentage points and 0.87 percentage points from the same period last year. During the same period, the Common Equity Tier 1 (CET1) ratio was recorded at 12.27%, up 0.13 percentage points year-over-year.
iM Bank Q2 Net Profit Declines 4.7% While iM Capital Surges 33%
iM Bank, the group's major subsidiary and commercial bank, reported a decline in net profit. iM Bank's Q2 net profit was 124.1 billion won, down 4.7% from 131.3 billion won in the same period last year. On a first-half cumulative basis, the figure was recorded at 245.7 billion won, down 4.2%.
iM Bank's corporate loans in the first half grew 5.9%. During this period, the delinquency rate and substandard-or-below loan ratio, indicators of asset quality, were recorded at 0.87% and 0.94% respectively. The delinquency rate decreased by 9 basis points, while the substandard-or-below loan ratio increased by 11 basis points.
By subsidiary, iM Capital's operating assets in the first half grew 13.9%, generating net profit of 39.5 billion won. Net profit increased approximately 33% from 29.7 billion won in the same period last year.
iM Securities showed net profit of 44.9 billion won in the first half (on a standalone basis) as commission income increased due to capital market revitalization. iM Life recorded net profit of 18.2 billion won in the first half, an increase of 31.9% compared to the same period last year.
iM Financial Board Approves 30 Billion Won Share Buyback Plan
On the 27th, the iM Financial Group board of directors resolved to purchase and cancel an additional 30 billion won worth of treasury shares. This represents a 50% (10 billion won) increase compared to the 20 billion won share buyback and cancellation scale in the second half of last year.
Cheon Byeong-gyu, Chief Financial Officer (CFO) of iM Financial, stated, "Despite solid asset growth, the CET1 ratio improved to a record high of 12.27% in the first half through efficient capital allocation considering risk-weighted assets (RW). We will actively utilize tax-free dividend opportunities."
FAQ
What was iM Financial Group's Q2 net profit and how did it compare to last year?
iM Financial Group's Q2 net profit was 141.1 billion won, representing a 9% decline from 155 billion won in the same period last year. The company attributed the decline to increased provisions, cost increases including education tax rate changes, and weaker securities-related income.
Why did iM Financial miss the market consensus for Q2 earnings?
iM Financial's Q2 net profit of 141.1 billion won missed the market consensus of 159.1 billion won by approximately 11%. Market observers attributed this to additional provisions related to Jungang Media Group and reduced securities-related income due to sluggish KOSDAQ market performance.
