NH Investment & Securities said on the 9th that Industrial Bank of Korea (IBK) needs a more active shareholder-return policy than before to meet the strengthened requirements for separate taxation of dividend income. It maintained its investment opinion of Buy and raised the target price to 26,500 won. The previous trading day's closing price of Industrial Bank of Korea (IBK) was 20,900 won.
Industrial Bank of Korea (IBK) is a representative high-dividend bank stock and implements a shareholder-return policy solely through dividends. It is therefore favored by individual shareholders who prioritize cash dividends. In 2025, the expected return declined from the previous year due to a rise in the share price, but it still remains in the 5% range.
However, under the current capital policy, the application of separate taxation to this year's dividends was projected to be difficult. According to recent National Assembly discussions, corporations with a payout ratio of 25%–40% need dividend payments to increase by more than 10% from the previous year to meet the separate taxation requirements.
NH Investment & Securities expects that, applying the upper end of the payout ratio under the current capital policy to Industrial Bank of Korea (IBK)'s standalone net income for this year, the estimated total amount of dividends would be only 858 billion won, up 1% from the same period a year earlier, falling short of the separate taxation requirements.
Jeong Jun-seop, an analyst at NH Investment & Securities, said that for Industrial Bank of Korea (IBK) to meet the requirements for separate taxation of dividend income, "it needs an increase in profit of more than 10% year over year, or to achieve a common equity Tier 1 (CET1) ratio of 12% to secure room to raise the payout ratio, and to expand dividends by adjusting the existing capital policy."
However, the achievement of profit growth or a CET1 ratio of 12% is uncertain, the analysis noted, adding that active efforts to revise capital policy are needed to provide dividend tax benefits to individual shareholders.