[비즈한국] iM Financial Group reported a weaker performance in the first half of this year compared to the same period last year. This is largely attributed to the deteriorating results of its core subsidiary, iM Bank. Although iM Bank transitioned from a regional bank to a commercial bank in 2024, the benefits of this shift have yet to materialize in its earnings. Meanwhile, the term of iM Financial Group Chairman Hwang Byung-woo is set to expire in March of next year. Within the financial sector, the prevailing sentiment is that Chairman Hwang will likely seek a second term. The primary argument for his retention is the need for management continuity during the transitional period of iM Bank's conversion to a commercial bank. Conversely, some analysts suggest that a new leadership team is necessary to drive aggressive expansion in the Seoul metropolitan area. Additionally, the government’s skeptical stance toward the consecutive terms of financial holding company chairmen remains a potential variable.
Aiming for Nationwide Growth, but Profitability Lags
iM Bank transitioned from a regional bank to a commercial bank in May 2024, a move intended to eliminate the "regional bank discount" and expand its nationwide sales network. This aligned with the government's policy goals of breaking the oligopoly in the commercial banking sector and fostering greater competition.
Chairman Hwang Byung-woo was the driving force behind this transition. Serving as CEO of iM Bank in 2023, he actively championed the shift, articulated the bank's position, and organized an internal task force (TF) to handle practical implementation. Chairman Hwang assumed the role of Chairman of iM Financial Group in March 2024. As this was the first instance of a regional bank converting to a commercial bank, the move naturally drew significant attention from the financial industry.
However, iM Bank's performance remains largely unchanged from the past. According to its business reports, net income was 363.9 billion KRW in 2023, 365.1 billion KRW in 2024, and 389.5 billion KRW in 2025. Net income for the first half of this year stood at 151.5 billion KRW, actually lower than the 163.3 billion KRW recorded in the first half of last year.
In essence, although iM Bank has opened numerous branches nationwide following its conversion to a commercial bank, the impact has not yet translated into better financial results. Critics note that its business base remains heavily concentrated in the Daegu and Gyeongbuk regions, making it difficult to compete with established commercial banks in the Seoul metropolitan area. Furthermore, the investment costs associated with non-Daegu/Gyeongbuk regions are exerting pressure on net income.
Kwak Soo-yeon, a senior analyst at Korea Ratings, analyzed iM Bank, stating, "Its sales base outside the Daegu and Gyeongbuk regions is weak, and its high proportion of loans to small and medium-sized enterprises means it lags behind other commercial banks in terms of diversification by region and borrower." She added, "We believe that the burden of selling, general, and administrative expenses resulting from the expansion of the business area following the transition to a commercial bank will act as downward pressure on profitability."
The poor performance of iM Bank inevitably affects the results of its parent company, iM Financial Group. The group's net income fell 4.69% from 317.9 billion KRW in the first half of last year to 303.0 billion KRW in the first half of this year. An iM Financial Group official explained, "Net income decreased compared to the same period last year due to an increase in non-recurring expenses, such as the change in education tax rates applied starting this year, and an increase in loan loss provisions following asset growth."
Debate Over Reappointment Amid "Financial Holding Governance Improvement"
Chairman Hwang Byung-woo's term ends in March next year. Financial circles are divided on the likelihood of his reappointment. Some argue that his term should be extended for the sake of management continuity, given that iM Bank is still in the transition phase. Others argue that a bold leadership change is now necessary to stabilize earnings and pursue more aggressive expansion in the capital region.
On August 20, iM Financial Group unveiled its "Qualification Requirements for the CEO of iM Financial Group." The requirements emphasize candidates who possess experience and expertise equivalent to a CEO of a financial firm, fully understand the company’s founding philosophy and vision, have a strong track record of achieving goals, hold internal and external trust through rational and fair conduct, and maintain high moral and ethical standards as financial professionals.
Following the announcement, the financial industry expects iM Financial Group to soon begin the formal selection process for the next chairman. While Chairman Hwang has not officially stated his intent to seek a second term, the consensus is that he will do so. There are few other candidates being discussed as successors. Additionally, iM Financial Group's stock price has shown an upward trend since Chairman Hwang took office, garnering a positive response from shareholders.
The key variable is the attitude of financial authorities. The ruling Democratic Party of Korea and financial regulators are drafting a "Financial Holding Governance Improvement Plan." Although the details have not been officially released, there is speculation that it may include measures to restrict the consecutive terms of chairmen or tighten reappointment requirements. Regarding this, the Financial Services Commission stated last July that "the specific details and announcement schedule for the governance improvement plan have not yet been decided."
If reappointment requirements are strengthened, it could act as a hurdle for Chairman Hwang. However, with the release of the authorities' improvement plan being delayed, there is a possibility that iM Financial Group could complete its selection process first, which would ease the burden on the group. Within political circles, some analysts suggest that the plan will focus on tightening requirements for a third consecutive term, without placing significant restrictions on a first reappointment.
iM Financial Group is expected to launch its Chairman Recommendation Committee soon. While no official schedule has been released, the industry anticipates that the committee will begin its work in late September or early October. The final candidate selected by the committee will be officially appointed after approval at the regular shareholders' meeting in March next year.