Seoul, South Korea – IBK Industrial Bank has made significant strides in the South Korean financial market, surpassing the market capitalization of one of the country's top five financial groups, according to financial industry sources on Thursday.
The bank's market capitalization reached 11.75 trillion won on Thursday, surpassing that of Woori Financial Group by approximately 229.1 billion won. This marks a significant turnaround from February 2022 when Woori Financial Group's market cap exceeded IBK Industrial Bank's by as much as 3.35 trillion won.
IBK Industrial Bank's strong performance can be attributed to its robust financial results. The bank reported a record high net profit of 2.19 trillion won for the first nine months of 2023. This is comparable to the earnings of NH Nonghyup Financial Group and Woori Financial Group. Market analysts anticipate that IBK Industrial Bank will continue to set new records in 2024.
The bank's rising stock price is also due to its reputation as a dividend-paying stock. As of the end of 2023, IBK Industrial Bank's dividend payout ratio stood at 29.4%, higher than the average of 28.4% for the country's four largest financial groups. In December last year, the bank announced a plan to increase its dividend payout ratio to 40% by 2026.
Despite recent challenges such as a labor dispute and a financial loss, investor confidence in the bank remains strong.
"The company's consistent dividend payments of around 7% per annum have solidified its reputation as a dividend-paying stock, and the reduced risk associated with its small and medium-sized enterprise lending has contributed to the rise in its stock price," said Kim In, a researcher at BNK Investment Securities.
However, some analysts argue that the bank needs to adopt more aggressive shareholder return policies to maintain its strong market position. The target dividend payout ratio of 40% by 2026 is lower than the 50% target set by other financial groups.
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