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| A movie poster of Parasite |
Woori Bank and the Industrial Bank of Korea (IBK) are expecting hefty returns from their investment in the Korean film "Parasite," this year's Palme d'Or winner at the Cannes Film Festival.
Their non-traditional investment method in local movie productions is emerging as a great way for banks to generate profit amid growing pressure to reduce their heavy dependence on net interest margins (NIM).
Woori and the state-run IBK made an indirect investment of 300 million won ($254,000) and 120 million won, respectively, in the movie, through investment vehicles.
Given the break-even point is estimated at 4 million viewers, the two lenders are set to enjoy high returns given the film has drawn over 10 million viewers as of July 21.
The IBK is well known for having the Midas touch in the film industry, as it has enjoyed a series of successes with its investments in domestic films.
Its successful investment portfolio includes "Extreme Job" a mega-hit that attracted over 13 million people to theaters, a resounding success given the break-even point of the movie was 2.4 million.
This brought about over a 400 percent return from its 800 million investment.
At the time, the IBK put up a combined 790 million won: 700 million won in direct and 90 million won in indirect investment.
The amount was the second-largest following CJ E&M, the main investor and distributor of the movie.
This was the result of a strategic approach by the "creative content financing department," under the bank's investment strategy group.
The team picks movies with "huge potential" to win popularity with audiences, based on thorough reviews, including reading screenplays, consulting with outside experts and assessing the capabilities of the director, cast and crew.
"Investment in cultural content can be highly profitable in Korea, a country with limited natural resources but great human capital," an IBK official said.
