Regional Financial Groups Post Mixed Q3 Results: BNK Slumps, iM Slows, JB Hits Record High

Three regional financial groups report third-quarter results
BNK Financial Group down 28.5% year over year
iM Financial Group down 1.4% despite strong performance by iM Bank
JB Financial Group up 0.8% as it expands higher-yielding assets

The third-quarter results of the three regional financial holding companies based outside Seoul—BNK Financial Group, JB Financial Group and iM Financial Group—diverged this year. BNK Financial Group’s net income fell sharply due to the base effect of one-off gains last year and the burden of loan-loss provisions, while iM Financial Group also posted a slight decline. JB Financial Group, by contrast, posted its highest-ever quarterly earnings, supported by strong profitability.

According to the financial industry on October 27, the three regional financial groups posted combined net income attributable to owners of the parent of 541.2 billion won in the third quarter, down 13.4% from the same quarter last year. JB Financial Group’s net income rose 0.8% year over year to 210 billion won, while BNK Financial Group and iM Financial Group posted declines of 28.5% and 1.4%, respectively, to 210.5 billion won and 120.7 billion won. The three groups’ combined net income for the first three quarters of this year totaled 1.6343 trillion won, down 8.2% from 1.7804 trillion won in the same period last year. BNK Financial Group and iM Financial Group posted 622.3 billion won and 416.3 billion won, respectively, down 19.2% and 3.6% year over year. JB Financial Group, by contrast, posted 595.7 billion won, up 2.9% from the same period last year.

BNK Financial Group, which recorded the largest decline in net income among the three regional groups, saw its non-interest income fall due to the base effect of 100.9 billion won in one-off gains from the sale of the BNK Gangnam Core office property last year, a sharp rise in bond yields, and weak securities and derivatives trading performance following a decline in the KOSPI. BNK Financial Group’s interest income rose 8.0%, from 740.8 billion won in the third quarter last year to 800.4 billion won in the third quarter this year. In contrast, its non-interest income fell 50.1% over the same period, from 153.5 billion won to 76.6 billion won. On a cumulative basis for the first three quarters, interest income grew 4.7% year over year, while non-interest income declined 16.5%. The group also set aside 206.1 billion won in loan-loss provisions, 51.9% more than the 135.7 billion won recorded in the same period last year, amid worsening financial conditions among small and midsize businesses in Busan, Ulsan and South Gyeongsang Province and a rise in borrowers struggling to repay their loans. This was also cited as a reason for the decline in earnings. Busan Bank’s third-quarter net income fell 28.7% year over year to 120.6 billion won, while BNK Kyongnam Bank’s net income declined 11.5% to 80.5 billion won.

iM Financial Group’s third-quarter net income edged down despite improved results at its flagship subsidiary, iM Bank. The decline reflected greater uncertainty in non-interest income amid increased market volatility and rising interest rates. iM Financial Group’s non-interest income fell 11.5%, from 86.6 billion won in the third quarter last year to 76.6 billion won in the third quarter this year. iM Bank’s third-quarter net income rose 5.1% to 115.8 billion won from 110.2 billion won a year earlier, supported by growth in corporate loans and a decline in loan-loss provisions. However, a 21.8 billion won non-interest loss in the third quarter this year limited the increase. Losses in iM Life’s investment division also widened from 10.2 billion won in the third quarter last year to 25.7 billion won, resulting in a net loss of 7 billion won for the quarter and weighing on the group’s overall performance.

JB Financial Group, by contrast, posted its highest-ever earnings for the third quarter this year, supported by its profitability. The group is seen to have improved asset efficiency through a strategy of increasing the share of higher-yielding assets, even as non-interest income fell 27.9% year over year. Results among its banking subsidiaries were mixed: Jeonbuk Bank’s third-quarter net income rose 17.4% year over year to 72.5 billion won, while Kwangju Bank’s declined 3.3% to 82.4 billion won. Among its non-bank subsidiaries, JB Asset Management swung from a net loss of 940 million won in the third quarter last year to net income of 6.6 billion won this year. JB Invest’s net income for the third quarter rose 87.3% from a year earlier to 2.84 billion won; on a cumulative basis for the first three quarters, it increased 32.2% to 8.11 billion won. Phnom Penh Commercial Bank (PPCBank), an overseas subsidiary, posted net income of 14.3 billion won. A JB Financial Group representative said, “While won-denominated loans increased 10.0% cumulatively in the first three quarters of this year, we kept the growth rate of risk-weighted assets (RWA) to 5.1%.”

Among the three regional financial groups, JB Financial Group posted the highest growth in cumulative interest income for the first three quarters, at 9.5% year over year, followed by iM Financial Group at 5.6% and BNK Financial Group at 4.7%. JB Financial Group’s return on equity (ROE), a profitability indicator, was 13.3%, higher than BNK Financial Group’s 7.63% and iM Financial Group’s 8.82%. The common equity tier 1 (CET1) ratios, an indicator of financial soundness, were 12.39% at JB Financial Group and iM Financial Group, and 12.18% at BNK Financial Group.

BNK Financial Group’s non-performing loan (NPL) ratio, an asset quality indicator, stood at 1.45% in the third quarter, down 0.01 percentage points from the previous quarter. iM Financial Group’s NPL ratio was 1.18%, down 0.23 percentage points from the previous quarter. JB Financial Group’s NPL ratio, however, rose 0.14 percentage points from the previous quarter to 1.57% at the end of the third quarter.

A financial industry official said, “Fourth-quarter results will depend on how much companies can recover non-interest income, diversify their earnings models and manage delinquency rates.”

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