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| Industrial Bank of Korea CEO Kim Do-jin |
The Industrial Bank of Korea (IBK) is emerging as having the Midas touch in the film industry, as it has enjoyed a series of successes with its investments in domestic films.
The state-run lender is drawing attention after the latest movie "Extreme Job" became a mega-success attracting more than 13 million people to the cinema, which is estimated to bring the bank around a 200 percent gain from its 800 million won ($710,000) investment.
According to the Korea Film Council (KOFIC), 13.24 million people have seen the movie as of Feb. 13, less than a month after it hit the box office, Jan. 23.
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| A movie poster of Extreme Job |
IBK has put up a combined 790 million won, 700 million won in direct investment and 90 million won in indirect.
The amount is the second largest following CJ E&M, the main investor and distributor of the movie.
IBK's successful investment portfolio includes a 2 billion won investment in "Along With the Gods" series: "The Two Worlds" and "The Last 49 Days."
Both movies drew over 10 million viewers, netting the state lender a handsome profit. The bank declined to disclose the exact amount.
Of 17 movies the IBK invested between 300 million won and 2 billion won in, nine generated profits, raising the lender's success rate to 52.9 percent. This is considered very high given that only 30 percent of commercial movies surpass the break-even point.
This was the result of a strategic approach of the "creative content financing department," under the bank's investment strategy group.
The team's great eye for picking movies with "huge potential" to win popularity with audiences, chose seven movies that drew over at least 6 million moviegoers.
Their decisions were based on thorough reviews, including reading screenplays, consulting with outside experts and assessing capabilities of director, cast and the movie production crews. They also consider the release timing as an important factor.
Based on the team's assessment, the state lender made direct investments with small- and medium-sized production companies by creating funds for them to cover the production cost.
The bank has also made investments in shares or equity-linked securities, issued by cultural content creators.
"Investment in cultural content can be highly profitable in Korea, a country with limited natural resources but great human capital," an IBK official said.
The project is also a great way for the state lender to diversify its business portfolio by reducing heavy dependence on the net interest margin and seek a new growth engine for sustainability.
The IBK also signed a memorandum of understanding with KOFIC to operate a 10 billion won fund to support and invest in low-budget movies and cultural SMEs.
