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Time to deliver

Maintain Buy and raise TP to W21,000

We raise our target price for iM Financial Group (iMFG) to W21,000 (from W19,000), which we derived by applying a target P/B of 0.5x (unchanged) to our 2026F BPS. We kept our target multiple unchanged because, while the group’s CET1 ratio is likely to see significant improvement from 2025 onward (allowing its existing shareholder return policy to remain on track), it should take time to reach the capital thresholds needed to expand shareholder returns further. With our target price implying 58.7% upside, we maintain our Buy rating.

3Q25 results meet expectations

For 3Q25, iMFG posted net profit attributable to owners of the parent of W122.4bn, in line with our estimate (W125.2bn) and the consensus (W125.3bn). While non-interest income was stronger than expected, this was offset by higher-than-expected credit costs. The credit cost ratio came in at 64bps, up 12bps QoQ but down 8bps YoY (continuing YoY improvement). Meanwhile, the CET1 ratio narrowed 5bps QoQ to 12.09%, suggesting that the group is unlikely to introduce additional shareholder return plans in the near term.

Shareholder return yield likely to reach 9.1% in 2026

In 2026, we forecast net profit attributable to owners of the parent to rise 8.8% YoY, with net interest income increasing 4.5% YoY, non-interest income declining 2.9% and the credit cost ratio narrowing 4bps. While the group’s CET1 ratio is likely to improve gradually, we do not expect it to reach 12.5% next year. As a result, we expect the shareholder return ratio (dividends + buybacks) to remain largely changed at 37.5%. That said, the shareholder return yield should still reach 9.1%.