[비즈한국] One year has passed since iM Financial Group transitioned from a regional bank to a nationwide commercial bank. During this period, the group rebranded from DGB Daegu Bank to iM Bank and from DGB Financial Group to iM Financial Group, while strengthening its digital transformation strategy. iM Financial emphasizes that being the only bank headquartered in a regional area is its key differentiator from other commercial banks; however, critics point out that the rapid closure of branches in the Daegu and Gyeongbuk regions has actually reduced accessibility for local residents.
On May 16, iM Financial held a joint ceremony for the 1st anniversary of its commercial bank conversion and the 14th anniversary of its founding at its headquarters in Suseong-gu, Daegu. The intent behind combining the ceremonies was to save costs, as the approval date for the commercial bank conversion (May 16) and the company's founding date (May 17) are only one day apart. At the ceremony, iM Financial reviewed its performance over the first year since the conversion and awarded high-achieving employees.
Hwang Byung-woo, Chairman of iM Financial, is the only head of a financial holding company among commercial banks to concurrently serve as a bank president. Having successfully secured a reappointment as bank president in December 2024, his term has been extended until this December. As the company is in a transitional phase of becoming a commercial bank, Chairman Hwang—an 'experienced hand'—has retained the steering wheel to ensure a smooth market entry. At the ceremony on the 16th, Chairman Hwang stated, "Based on the strategic decision to transition into a commercial bank, we will turn crises into opportunities and, through digital technology, create a virtuous cycle that benefits all stakeholders, including our employees, shareholders, and the local community."
Along with its transition to a commercial bank, iM Financial changed its name from Daegu Bank to iM Bank in June 2024 and established the vision of a 'New Hybrid Bank.' A New Hybrid Bank is a business model that combines the strengths of internet-only banks and traditional banks; the plan is to strengthen non-face-to-face channels in retail banking and operate corporate banking around the 'PRM (Professional Relationship Manager)' system, where one-person branch managers handle accounts. It also has a goal to increase the share of digital loans (non-face-to-face household credit) from 4.2% in 2024 to 25% by 2030. The company also drafted a blueprint to utilize the PRM system to reduce costs such as branch rental fees while more than tripling loan volumes over three years.
iM Financial explained, "To improve our digital constitution, we focused on improving organizational culture and practical efficiency through the development of digital-only financial products and the recruitment of external experts. iM Bank has also been engaged in linking with external platforms and designating innovative financial services through digital channels."
Following the name change of the group last March, the company received a solid report card in its first earnings announcement. Net profit increased thanks to a significant reduction in credit loss expenses. Loan loss provisions, which financial companies set aside to prepare for asset impairment, are recorded as expenses on the income statement, reducing net profit. However, both the group and the bank saw a decrease in interest income and non-interest income compared to last year.
iM Financial's net profit for the first quarter of this year was 154.3 billion won, a 38.1% increase from the same period last year (111.7 billion won). During the same period, however, interest income fell by -5.1% (from 424.9 billion won to 403.1 billion won) and non-interest income fell by -6.6% (from 126.6 billion won to 118.3 billion won). Instead, loan loss provisions dropped to 70.1 billion won, a -56.1% decrease compared to the same period last year (159.5 billion won).
The situation is similar for the bank. iM Bank's net profit in the first quarter increased by 4.7% compared to the same period last year (from 119.5 billion won to 125.1 billion won), while loan loss provisions decreased by 40.7% from 103.5 billion won to 61.4 billion won during the same period. In the case of interest income, it has declined for four consecutive quarters. iM Bank's interest income fell from 387.6 billion won in the first quarter of 2024 to 365.3 billion won in the first quarter of this year, and non-interest income decreased from 23.6 billion won to 17.9 billion won over the same period.
Even after its conversion to a commercial bank, iM Financial has highlighted its continued 'region-centered finance' as a differentiator from large banks. Emphasizing that it is the only commercial bank with its headquarters in a regional area, iM Financial stated, "We have become a model for sustainable finance and local co-prosperity by returning more than 11% of our net profit to society." iM Financial has its primary headquarters in Suseong-gu, Daegu, and a second headquarters in Buk-gu.
However, accessibility for consumers in the Daegu and Gyeongbuk regions has dropped significantly over the past year. According to disclosures from the Korea Federation of Banks, 11 iM Bank branches disappeared in the Daegu and Gyeongbuk regions in the first quarter of 2025 (7 branches and 1 sub-branch in Daegu; 3 branches in Gyeongbuk). Compared to the 8 branches (6 branches, 2 sub-branches) that disappeared in Daegu alone during the year 2024, the pace of branch closures has accelerated. No branches were closed in Gyeongbuk.
Instead of closing 10 branches in the first quarter of this year, iM Bank opened 7 sub-branches (4 in Daegu, 3 in Gyeongbuk). Sub-branches are smaller than regular branches and operate with a minimum number of personnel, offering fewer services. While the strategy of increasing sub-branches instead of full branches allows the bank to reduce costs, it is criticized for reducing customer convenience.
An official from iM Financial stated, "We are increasing iM Bank's hub branches centered in the metropolitan area, such as Wonju in Gangwon, Magok and Gasan in Seoul, and Dongtan in Gyeonggi. After the conversion to a commercial bank, we plan to expand branches centered on the metropolitan area and regions where we did not previously have a presence, while also operating customized branches that reflect the characteristics and demands of each region."
Meanwhile, there is high anticipation for iM Financial in the stock market. The stock price of iM Financial Group139130 was 10,510 won on May 16, an increase of 22.8% compared to the closing price of 8,560 won a year ago when it received approval as a commercial bank. Kim Eun-gap, an analyst at Kiwoom Securities, predicted, "iM Financial improved its earnings 1-2 quarters faster than expected. While there is room for earnings to fluctuate depending on changes in asset soundness, there will be no change in the direction of significantly improving this year's earnings because the provision costs in 2024 were so high."