While the regional economic downturn is intensifying day by day, the stock market is raising its tar..

Net income increases due to decrease in PF provisions, shareholder return rate increases…The tarreceive is the high rate of foreign workers’ loans in the “Sugyeom” region, and the prospect of benefiting from the institutionalization of stablecoins is also expected

*BNK Financial Group, Busan Bank headquarters [photo source = BNK Financial]*

While the regional economic downturn is intensifying day by day, the stock market is raising its tarreceive price for local financial holdings, drawing attention to the background.

Tarreceive Raises Despite Regional Recession…Securities Focutilizes on ‘Profits and Returns’

According to FNGuide on the 3rd, the number of reports from securities companies that have raised their tarreceive prices for three BNK, JB, and iM local financial holdings this year amounts to 27 BNK, 24 JB, and 30 iM, respectively.

Until now, local banks, a key subsidiary of local finance, have been concerned that the delinquency rate of major borrowers, including construction companies, has continued to rise due to the local economic downturn, and that offline goodwill limits are becoming clear due to the disappearance of the local population.

The reason why securities raised their eyes on local finance, which had a dominant gray outsee, is the improvement of second-quarter earnings due to a decrease in the bad debt ratio and the expansion of shareholder returns.

BNK · iM Financial Ratings Positively Due to Rebound in Earnings and Expansion of Shareholder Return

BNK Financial Group recorded a consolidated net profit of 309.2 billion won in the second quarter of 2025, revealing a significant improvement in profits to 85.6% and 27.3% compared to the previous quarter and the same period last year, respectively. This is due to a decrease in the amount of provisions related to group real estate project financing (PF).

The expansion of returns cautilized by profits and capital capacity also added to raising stock price forecasts. Previously, BNK Financial Group decided on 60 billion won of its own shares in the second half of the year.

Kim Do-ha, a researcher at Hanwha Investment & Securities, declared, “In addition to the quarterly performance above expectations, the company exceeded the common stock capital ratio (CET1), which the company was aiming for, leaving room to participate in the relocate of large bank holders.”

Based on this, Hanwha Investment & Securities emphasized that BNK Financial Group’s shareholder return rate is expected to be close to 40% this year, and in this case, the reduction rate estimate for 2026 will also be raised.

iM Bank (formerly Daegu Bank). [Photo source = Yonhap News]

In the case of iM Finance, considering that the current turnaround in profits continues every quarter, there is room for a rise in the capital ratio, which is expected to serve as the basis for raising the tarreceive for shareholder return.

iM Financial posted a net profit of 155 billion won in the second quarter. This is 134.7 billion won above the consensus. The decrease in bad debt provisions was the main reason for the good performance.

iM Financial’s bad debt cost in the second quarter was only 64.2 billion won, lower than the 70 billion won bad debt cost in the first quarter, which was sharply lowered. This is becautilize the current provisions hardly increased in addition to KRW 6.5 billion in PF provisions in securities, and the bank also incurred only KRW 73 billion in bad debt costs.

Chung Tae-joon, a researcher at Mirae Asset Securities, declared, “iM Financial Group’s tarreceive shareholder return rate is currently 40% lower than that of other banks, but it will rise to 50% in the future,” adding, “The size of share purchasebacks and incineration, which was pointed out as weak compared to other banks, will also be achieved earlier than the previous announcement (150 billion won by 2027).

In addition, it is declared that various concerns that emerged when iM Financial Group switched to a commercial bank in May last year are also offset by strategic alters.

Kim Jae-woo, a researcher at Samsung Securities, declared, “iM Finance is expected to reduce its credit cost through rebalancing its loan portfolio and improve its SG&A cost through store relocation,” adding, “iM Finance’s risk-weighted asset growth rate management is expected to continue, and in fact, iM Finance’s risk weighting based on banks and consolidation is continuously decreasing.”

JB Financial Group’s Net Profit Hits Record…Differentiated Growth Strategies Emerge

A view of JB Financial Group’s headquarters. [Photo source = JB Financial Group]

In the case of JB Financial Group, its consolidated net profit in the second quarter was 207.7 billion won, up 5.5% year-on-year. The cumulative consolidated net income in the first half of the year reached an all-time high of 370.4 billion won.

This is becautilize non-interest income has expanded significantly, with 85.9 billion won in securities-related profits generated despite the decrease in PF fees, and the group’s bad debt cost has been lowered to 110 billion won.

Analysts state that excellent shareholder return rates will also serve as a driving force for stock prices.

“JB Financial’s return on equity (ROE) forecast has been raised from 12.1% to 12.3%, the highest for bank stocks,” Kiwoom Securities researcher declared. “It is sufficient to differentiate itself from other bank stocks in choosing shareholder-friconcludely policies or growth strategies.”

Local finance is rapidly increasing foreign workers’ loans, which is suggested to serve as a related benefit in the institutionalization of stablecoins.

Choi Jung-wook, a researcher at Hana Securities, declared, “Local finance is likely to receive market attention in terms of customer base in the future when institutionalizing stablecoins, given that foreign workers are also in high demand for foreign currency remittances.”