K-Bank's Rapid Growth... Full-Scale Competition Begins in the Mid-Interest Rate Battle Among Internet Banks

K Bank Achieves Record Growth Amid Cryptocurrency Boom
Kakao Bank Remains Strong No.1... Awaiting IPO

[Asia Economy Reporter Kiho Sung] The competition among internet-only banks is heating up. Unlike KakaoBank, which has achieved rapid growth by surpassing 16 million subscribers, K Bank, the first internet-only bank, continued its "soft opening" last year. However, this year, K Bank surpassed KakaoBank in new subscribers for the first time in January and gained momentum by attracting the highest number of new subscribers in the second quarter. With K Bank's rapid growth, the mid-interest rate battle among internet banks is expected to intensify in the second half of the year.

According to the financial sector on the 4th, K Bank's new subscribers in the second quarter of this year increased by 2.28 million compared to the previous quarter, marking the largest growth ever. The cumulative number of users as of the end of June reached 6.19 million. During the same period, the loan balance exceeded 5 trillion won, reaching 5.09 trillion won. This is a quarterly record increase of 1.26 trillion won. Deposits increased by 2.57 trillion won, totaling 11.29 trillion won.

During this period, KakaoBank's cumulative number of users increased by 560,000 from the previous quarter to 16.71 million. Although the number of new subscribers per quarter is lower than K Bank's, the cumulative number is 2.5 times that of K Bank. KakaoBank's deposits and loans stood at 26.6259 trillion won and 23.1265 trillion won, respectively.

K Bank's rapid growth was largely influenced by cryptocurrency. In June last year, K Bank began issuing deposit and withdrawal accounts through a partnership with the cryptocurrency exchange Upbit. As cryptocurrency prices surged, the number of users grew exponentially. In December last year, K Bank started to catch up with KakaoBank with 210,000 new monthly subscribers compared to KakaoBank's 220,000. In January this year, K Bank attracted 280,000 new users, surpassing KakaoBank's 210,000 for the first time. In the second quarter, the number increased by 2.28 million, exceeding the total number of subscribers of 1.57 million accumulated over the past three years in just one quarter.

Additionally, the popularity of flagship products such as the 100% non-face-to-face ‘Apartment Mortgage Loan’ and the ‘CodeK Time Deposit’ offering the highest interest rate without conditions also contributed. Despite subscription restrictions for stable operation, the apartment mortgage loan recorded 500 billion won in the first quarter and 700 billion won by the end of June. The CodeK Time Deposit, which offers a special interest rate of 1.5% per annum (for one year) to all subscribers without complicated conditions, reached 200 billion won within a week of the event's launch.

As K Bank continues to make strides, competition among internet-only banks is expected to become fiercer. Especially, depending on government policies, internet banks are putting their lives on the line, and their performance in the mid-interest rate market could determine their results in the second half of the year. To this end, K Bank recently expanded its capital through a large-scale paid-in capital increase amounting to 1.25 trillion won. KakaoBank is preparing for an initial public offering (IPO) soon.

In the market, the prevailing view is that K Bank is unlikely to overtake KakaoBank immediately. As of the end of June, KakaoBank's cumulative subscribers stood at 16.71 million, more than twice K Bank's 6.19 million. The loan scale also shows a nearly fivefold gap, with K Bank and KakaoBank at 5.09 trillion won and 23.1265 trillion won, respectively. Particularly in terms of brand recognition, K Bank is considerably behind KakaoBank.

A financial industry insider said, "Although K Bank has recently shown rapid growth, it is clear that the gap with KakaoBank is too wide to catch up immediately. However, leveraging its frightening growth speed, it is expected to hold its ground in the mid-interest rate battle that will unfold in the second half of the year."

This content was produced with the assistance of AI translation services.