KakaoBank Q3 Net Profit 52 Billion KRW... 28% Increase YoY

KakaoBank Mini Customers Reach 1 Million
60% of New Customers This Year Are Middle-Aged 40s and Older

[Asia Economy Reporter Kiho Sung] KakaoBank recorded a net profit of 52 billion KRW in the third quarter of this year. The company stated that the increase in customers of KakaoBank Mini, a financial service for teenagers, and the expansion of middle-aged and older customers aged 40 and above were factors behind the strong performance.

On the 2nd, KakaoBank announced that it achieved an operating profit of 71.2 billion KRW and a net profit of 52 billion KRW in the third quarter of this year. These figures represent increases of 58.5% and 28%, respectively, compared to the same period last year. The cumulative operating profit for the third quarter reached 205 billion KRW, and net profit was 167.9 billion KRW, marking increases of 128.9% and 95.6% compared to the same period last year.

KakaoBank's customer base grew from 15.44 million at the end of last year to 17.4 million as of the end of September this year. This means that 60% of the economically active population is using KakaoBank.

By age group, KakaoBank Mini, a service targeting those aged 14 to 18, had nearly 1 million customers as of the end of September, growing into a service used by more than 40% of the target age population. The number of middle-aged and older customers aged 40 and above is also rapidly increasing. Approximately 60% of new customers acquired from January to September this year were aged 40 and above.

The number of users of the KakaoBank mobile application exceeded 14.7 million MAU, an increase of 670,000 from the previous quarter. This continuous expansion of the customer base led to an increase in operating profit, driven by growth in interest income from loan expansion and steady growth in platform and fee-based businesses. As of the end of the third quarter this year, the cumulative cost-to-income ratio (CIR) for four quarters was 43%. Despite an increase in selling and administrative expenses such as advertising costs for brand marketing, efficient cost structures resulted in a continuous decline.

Deposit balances increased by 5.5252 trillion KRW from the end of last year to 29.0645 trillion KRW, with low-cost deposits accounting for 57%. Loan balances rose from 20.3133 trillion KRW to 25.0385 trillion KRW during the same period. Despite a decrease in high-credit loans, mid- to low-credit loans and jeonse (key money deposit) loans led the loan growth.

In the platform sector, businesses such as securities account opening applications, credit card recruitment agency services, linked loans, advertising, and KakaoBank Mini continue to grow steadily. Platform revenue accounted for 10.5% of operating income, reaching double digits. The cumulative number of securities account openings reached 4.91 million, an increase of 1.91 million accounts compared to the end of last year. The cumulative handling amount of linked loan services, which surpassed 3 trillion KRW in the second quarter of this year, reached 3.665 trillion KRW as of the end of the third quarter.

As of the end of September, the Basel III-based capital adequacy ratio (BIS) was 34.57%. The delinquency rate was 0.21%, and the nominal net interest margin (NIM) was 1.92%.

A KakaoBank official said, "Next year, based on KakaoBank’s unique mobile completeness, we plan to enter the mortgage loan market and introduce new innovations," adding, "Along with the expansion of platform business, we will accelerate loans to mid- to low-credit customers and continue KakaoBank’s unique growth."

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