IBK Industrial Bank of Korea Posts First-Half Net Profit of 1.44 Trillion Won, Down 4.4% Year-on-Year

SME Loans Reach 270 Trillion Won
Market Share Hits Record High of 24.6%
Net Profit Down 4.4%

IBK Industrial Bank of Korea has expanded its SME loans to 270 trillion won, achieving the highest market share in SME finance in its history. However, due to the expansion of foreign currency translation losses resulting from a sharp rise in exchange rates, as well as an increase in loan loss provisions, net profit for the first half of the year decreased compared to the same period last year.

IBK Industrial Bank of Korea announced on July 27 that its consolidated net profit for the first half of this year was 1.4429 trillion won, down 4.4% from the same period last year. The bank’s standalone net profit was 1.2078 trillion won, a decrease of 9.0% over the same period. Although net interest income improved due to the growth in interest-earning assets and efforts to reduce funding costs, and gains from securities also increased, the rapid rise in exchange rates—which caused a surge in foreign currency translation losses—and increased loan loss provisions negatively impacted results.

The outstanding balance of SME loans increased by 8.1 trillion won, or 3.1%, from the end of last year to reach 270 trillion won. As a result, the bank's market share in SME finance rose to a record high of 24.6%. Industrial Bank of Korea explained that this achievement was the result of actively expanding funding for SMEs and innovative enterprises in line with its policy of expanding productive finance.

Key asset quality indicators remained largely stable. The bank’s loan loss cost ratio for the first half was 0.46%, up 0.05 percentage points from the same period last year. In contrast, the ratio of substandard and below loans was 1.27%, down 0.01 percentage points compared with year-end last year. Substandard and below loans refer to non-performing loans that are delinquent for three months or more, or for which the likelihood of repayment is low. Industrial Bank of Korea assessed that its asset quality management remains sound, given that the ratio of substandard and below loans declined despite the increase in SME loans and loan loss costs.

For the first time since its establishment, Industrial Bank of Korea will pay quarterly dividends as part of efforts to enhance shareholder returns. The record date for the dividend is July 31, and the dividend per share has been set at 210 won. A bank representative stated, "Through our organizational restructuring in the second half of the year, we have secured further momentum for productive finance support and a major transformation toward artificial intelligence (AI)," adding, "We also plan to further enhance shareholder returns through this first-ever quarterly dividend."

This content was produced with the assistance of AI translation services.