IBK's Marvelous H1

The bank posts net profit up more than 36 pct in H1 thanks to shrunken loss provisions and non-performing assets

The Industrial Bank of Korea posted net profit of 104.65 billion won in the first half of this year, up 36.31 percent YoY with loss provisions falling by 348.9 billion won at 613.6 billion won in the period,, the bank said recently.
The return on assets(ROA) recorded 1.2 percent in H1, up from 0.86 percent in the same period last year and the return on equity (ROE) marked 16.67 percent, up from 14.34 percent in the same period last year, while net interest margin stood at 2.67 percent slightly down from 2.81 percent in the same period last year, the bank said.
Total credit and loans provided in H1 amounted to 1.36 trillion won, up 760.4 billion won YoY, with 1.094 trillion won provided to corporate borrowers, while 247.94 billion won went to household borrowers. Card loans amounted to 217.3 billion won, up 239.12 billion won compared to the same period last year.
Non-performing assets amounted to 240.22 billion won, up 0.05 percent YoY with 224.66 billion won occurring in corporate loans( 2 pct) and 126.9 billion won in household loans(0.5 pct) and 28.7 billion won in credit card loans(1.32 pct).
The default rate fell to 1.03 percent from 1.29 percent YoY with corporate default rate down to 0.9 percent from 1.04 percent in the same period last year while default rate in household loans stood at 0.48 percent, up from 0.34 percent YoY. The default rate in the credit card sector rose to 1.36 percent from 1.04 percent YoY.
In the meantime,the Industrial Bank of Korea, in a ceremony on Aug. 1 to mark its 50th anniversary, announced its new vision to expand total assets to 300 trillion won by 2015 securing 15 million individual and 1 million corporate customers.
At the ceremony held at its headquarters building in Euljiro, downtown Seoul, President Cho Joon-hee announced the vision as the initial step toward the bank's next half century of operation under the slogan of "100 Years of IBK, the Future of Finance."
The new vision also calls for securing 15 million individual customers in addition to 1 million corporate customers by building a banking network in East Asia a financial belt for IBK with the development of new financial products for SMEs and services.
Cho said in his congratulatory speech before some 400 officers and staff of the bank that IBK, which started as a small root at the beginning half a century ago, has now grown to be a giant tree with deep roots taking charge of a corner of the national economy. He said every one of the bank's 11,000 officers and staff's sweat and tears have made IBK a pronoun for hope and dreams, breaking down academic and status walls, providing opportunities and possibilities to any one.
He called on every employee of the bank to build a bridge to cross the river and build roads if faced with a mountain and with such efforts, overcome any problems ahead to continue to march and the future will be IBK's.
When IBK was launched in 1961, its capital amounted to only 200 million won and assets totaled 2.9 billion won and now they have expanded to 10.4 trillion won and 183 trillion won respectively. The number of branches expanded to 645 from 31 and the number of employees from 935 to 11,000 now.
The Bank's primary objective is to "promote independent economic activities of small and medium-sized enterprises (SMEs) and to enhance their economic position in the Korean economy." Due to this public policy role, the government retains full control over the Bank including the appointment of management, approval of budgetary and operation plans of the Bank.
On 11 December 2003, an amendment was made to the IBK Act, giving the Bank more autonomy in its operations. Among other activities, the Bank was allowed to invest in the equities and debt securities of the SMEs and to set up budgeting requirements for general and administrative expenses besides labor costs. An additional amendment was made to the Articles of Incorporation of the Act on 30 March 2005, granting the Bank to utilize more diverse sources of capital. nw

President Cho Joon-hee of the Industrial Bank of Korea

Photo on Courtesy of IBK