iM Financial Group posted nine-month net profit of 416.3 billion won for the third quarter of this year, down 3.6 percent from the same period last year. Interest income increased on the back of expanding loan assets, but cumulative net profit and operating profit both fell from a year earlier. The group said asset growth continued, led by corporate loans, and soundness indicators improved, laying the groundwork for a recovery in profitability.

iM Financial said on Oct. 27 its nine-month net profit attributable to controlling shareholders totalled 416.3 billion won, down 3.6 percent from 431.7 billion won a year earlier. Third-quarter net profit was 120.7 billion won, down 1.4 percent from 122.4 billion won in the same period last year.

Nine-month operating profit was 540.2 billion won, down 4.1 percent from 563.4 billion won a year earlier. Third-quarter operating profit, however, rose 4.9 percent to 163.5 billion won.

The group’s loan assets increased 7.6 percent from the end of last year. Interest income also rose 5.6 percent from a year earlier as it expanded lending linked to productive finance, led by iM Bank and iM Capital.

◆ Nine-month net profit down 1.4 percent... capital unit up 20 percent

iM Bank, the group’s main unit, posted nine-month net profit of 361.5 billion won, down 1.4 percent from a year earlier. Third-quarter net profit rose 5.1 percent from a year earlier to 115.8 billion won.

iM Bank’s won-denominated loans stood at 62.0425 trillion won at end-September, up 6.8 percent from a year earlier. Won-denominated deposits rose 7.3 percent to 59.6792 trillion won. Corporate loans increased 10.8 percent, or 3.8 trillion won, from the end of last year, leading growth in loan assets and interest income.

Provisioning expenses also fell as a result of soundness management. iM Bank’s loan-loss provision charges declined 11.8 percent from a year earlier. Its substandard-or-below loan ratio fell 0.07 percentage points to 0.77 percent from 0.84 percent a year earlier, and the credit cost ratio improved 0.10 percentage points to 0.40 percent from 0.50 percent.

The bank’s nine-month operating profit was 438.6 billion won, down 5.1 percent from a year earlier. Return on assets was 0.59 percent and return on equity was 9.01 percent, down 0.04 percentage points and 0.40 percentage points, respectively, from the same period last year.

Among non-bank units, iM Capital posted nine-month net profit of 56.5 billion won, up 20 percent from a year earlier. It said its net profit through the third quarter exceeded last year’s full-year net profit, supported by a 14.9 percent expansion in operating assets, asset growth centred on auto finance and a drop in loan-loss provision charges. Provision charges fell 19.1 percent from a year earlier.

iM Securities recorded nine-month net profit of 72.2 billion won on an increase in net operating revenue driven by an activated capital market. On a separate financial statement basis, it was up 10.4 percent from a year earlier. iM Life’s nine-month net profit was tallied at 11.2 billion won.

The group’s substandard-or-below loan ratio and credit cost ratio improved to 1.18 percent and 0.48 percent, respectively. Its common equity Tier 1 ratio rose 0.12 percentage points from the previous quarter to a record 12.39 percent, while return on equity was tallied at 8.82 percent, down 0.68 percentage points from a year earlier.

iM Financial said it is continuing shareholder returns based on improved capital ratios. It completed an additional treasury share buyback worth 30.0 billion won announced in July, and plans to cancel all the acquired shares within one month. The purchase represents about 1.1 percent of total shares outstanding.

Byung-gyu Chun (천병규), iM Financial Holding’s group chief financial officer and executive vice president, said, "There is a part where uncertainty surrounding non-interest income has grown due to rising market volatility and higher interest rates, but it is positive that interest income is improving."