[비즈한국] iM Financial Group reported weaker performance in the first half of this year compared to the previous year. This is attributed to the declining performance of its core subsidiary, iM Bank. Although iM Bank transitioned from a regional bank to a nationwide commercial bank in 2024, the effect has yet to translate into actual results. Amid this situation, the term of iM Financial Group Chairman Hwang Byung-woo expires in March next year. The consensus in the financial sector is that Chairman Hwang will likely seek a consecutive term. The main reason cited is the need for management continuity, as iM Bank is currently in a transitional phase following its conversion to a commercial bank. On the other hand, some analysts argue that new management 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 could also serve as a variable.
Aiming for a nationwide leap, but profitability takes a step back
iM Bank transitioned from a regional bank to a commercial bank in May 2024. The move was intended to resolve the "regional bank discount" and expand its nationwide sales network. The government's policy to break the oligopoly of existing commercial banks and promote competition in the banking sector also aligned with these interests.
The person who led iM Bank’s conversion to a commercial bank was Chairman Hwang Byung-woo. In 2023, while serving as the President of iM Bank, he not only announced the bank's position on the conversion but also organized an internal task force (TF) to manage practical implementation. Chairman Hwang took office as the Chairman of iM Financial Group in March 2024. As it was the first case of a regional bank converting to a commercial bank, the financial sector naturally paid close attention.
However, iM Bank's performance is not significantly different from before. According to business reports, net profit was 363.9 billion KRW in 2023, 365.1 billion KRW in 2024, and 389.5 billion KRW in 2025. Net profit for the first half of this year was 151.5 billion KRW, which is actually a decrease from the 163.3 billion KRW recorded in the first half of last year.
Although iM Bank has opened many branches nationwide following its conversion to a commercial bank, the effect has not translated into performance. Evaluations suggest that its primary business base is still in the Daegu-Gyeongbuk region, and it remains too small to compete effectively with established commercial banks in the Seoul metropolitan area. The impact of investment costs outside the Daegu-Gyeongbuk region on net profit cannot be ignored.
Kwak Soo-yeon, a senior researcher at Korea Ratings, analyzed iM Bank: "Its business base outside the Daegu-Gyeongbuk region is insufficient, 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. It is judged that the burden of selling, general, and administrative expenses resulting from the expansion of the business area after the transition to a commercial bank will act as downward pressure on profitability."
iM Bank's sluggish performance inevitably affects the results of its parent company, iM Financial Group. iM Financial Group's net profit decreased by 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 official from iM Financial Group explained, "Net profit decreased compared to the same period last year due to an increase in non-recurring expenses, such as changes in education tax rates applied starting this year, and an increase in provisions following asset growth."
Amid talks of a consecutive term, the ‘Financial Holding Company Governance Improvement Plan’ remains a variable
Chairman Hwang Byung-woo's term ends in March next year. Opinions in the financial sector regarding his chances for a consecutive term are divided. While some suggest that his term will be extended for the sake of management continuity given iM Bank's transition period, others argue that a bold management reshuffle is now needed to stabilize performance and pursue aggressive growth in the capital region.
On August 20, iM Financial Group disclosed the ‘Qualification Requirements for the CEO of iM Financial Group.’ As active qualification requirements, they presented: those with work experience and expertise equivalent to the CEO of a financial company; those who fully understand the company’s founding philosophy and purpose, share its management ideology and vision, and possess the capabilities to continuously drive results; those who enjoy deep trust internally and externally through rational and fair work; and those with high moral integrity and ethical awareness as financial professionals.
Following the disclosure of these requirements, the financial sector expects iM Financial Group to begin the formal procedure for selecting a chairman soon. Although Chairman Hwang Byung-woo has not officially announced his intention to seek a consecutive term, the atmosphere in the financial sector suggests he will likely do so. There are few other candidates mentioned for the next chairman. Since Chairman Hwang took office, iM Financial Group's stock price has shown an upward trend, and shareholders have also reacted positively.
The variable is the attitude of financial authorities. The ruling Democratic Party of Korea and financial authorities are preparing a ‘Financial Holding Company Governance Improvement Plan.’ Although the details have not been officially released, there is speculation that the plan may include provisions to restrict consecutive terms for financial holding company chairmen or strengthen requirements for them. In this regard, the Financial Services Commission stated last July, "Specific details and the announcement schedule for the governance improvement plan have not yet been decided."
If the requirements for a consecutive term are tightened, it could pose a hurdle for Chairman Hwang Byung-woo. However, as the announcement of the financial authorities’ improvement plan is delayed, it is possible that iM Financial Group may complete its chairman selection process first. In that case, the burden on iM Financial Group could be eased. Some in political circles suggest that the plan will focus on strengthening requirements for a third consecutive term, while not placing significant restrictions on a first consecutive term.
iM Financial Group plans to launch a Chairman Recommendation Committee (CRC) soon to select the next chairman. Although no official schedule has been announced, the financial sector expects the committee to begin its work in earnest starting late September or early October. The final chairman candidate selected by the committee will officially take office following approval at the regular shareholders' meeting next March.