Heungkuk Securities said on the 19th that iM Financial Holdings is showing a clear improvement in earnings while also pushing an efficient branch network expansion strategy as it converts into a commercial bank. It initiated coverage with an investment opinion of Buy and a target price of 18,500 won. iM Financial Holdings' previous day's closing price was 14,490 won.
Heungkuk Securities forecast that the improvement in iM Financial Holdings' earnings will continue next year. For 2026 results, it projected operating profit of 706.4 billion won and net profit attributable to controlling shareholders of 515.1 billion won. Those figures are up 14.7% and 11.1%, respectively, from a year earlier.
Yoo Jun-seok, a researcher at Heungkuk Securities, said, "Won-denominated loans are expected to grow 4.3% year over year, and we expect interest income to increase 5.7% year over year as the net interest margin (NIM) improves," adding, "Loan growth in the Seoul metropolitan area based on the PRM system is also expected to support iM Financial Holdings' increase in interest income."
Because iM Financial Holdings pays only year-end settlement of account dividends, a decline in the common equity Tier 1 (CET1) ratio in the fourth quarter is inevitable. In addition, Heungkuk Securities analyzed that a large increase in dividends from a year earlier is needed to meet the requirement for separate taxation of dividend income.
However, Yoo projected that, given selective loan growth and improving results, the CET1 ratio at the end of next year will exceed 12.0%. The total shareholder return ratio in 2025 is expected to be 38.0%, and the dividend yield is expected to be 5.2%.
Yoo said, "Competitors are quickly raising their shareholder return ratios, and considering that it is not easy to surpass a 12.3% CET1 ratio in the short term, a more flexible and swift shareholder return plan is needed to narrow the valuation gap," adding, "Also, since dividend cuts are possible, we judge that a more strategic approach can maximize the effect of enhancing corporate value."