Inbaeng, Record High Cumulative Net Profit in Q3... K-Bank Turns to Profit (Comprehensive)

KakaoBank Posts 167.9 Billion KRW Net Profit in Q3 Accumulated
K Bank Turns Cumulative Profit After Over 4 Years Since Launch

[Asia Economy Reporter Kiho Sung] Internet-only banks recorded their highest cumulative performance ever in the third quarter. In particular, K-Bank is attracting industry attention as it is expected to turn a profit this year.

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

KakaoBank's customers increased 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.

In particular, the number of customers for KakaoBank Mini, a financial service targeting teenagers, has notably increased. By age group, KakaoBank Mini, which targets 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. Customers aged 40 and above are also rapidly increasing. About 60% of new customers from January to September this year were aged 40 or older.

The deposit balance increased by 5.5252 trillion KRW from the end of last year to 29.0645 trillion KRW, with low-cost deposits accounting for 57%. The loan balance increased 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 deposit loans led the loan growth.

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

K-Bank Expected to Achieve First Annual Profit Since 2017

K-Bank succeeded in achieving its first quarterly profit in the second quarter and further increased its profit in the third quarter, successfully turning to an annual cumulative profit for the first time. Accordingly, expectations are rising for the first annual profit since its launch in April 2017.

K-Bank posted a provisional net profit of about 16.8 billion KRW in the third quarter. Considering the losses and profits of the first quarter (-12.3 billion KRW) and the second quarter (3.9 billion KRW), the cumulative profit up to the third quarter was 8.4 billion KRW, marking the first annual cumulative profit turnaround in over four years since its launch.

The reason for the expanded profit margin is that the revenue base has been solidified due to increased deposits and loans and expanded net interest margin. K-Bank's customers, who numbered 2.19 million at the end of last year, increased by 4.41 million to 6.6 million as of the end of the third quarter. The increase in customers led to an expansion of deposits and loans. As of the end of September, deposits and loans were 12.31 trillion KRW and 6.18 trillion KRW, respectively, increasing by 8.51 trillion KRW and 3.19 trillion KRW compared to the end of last year.

K-Bank's net interest margin has been rising every month since the beginning of the year. The net interest margin in the third quarter increased by 0.24% compared to the first quarter. Accordingly, the net interest income in the third quarter was 50.2 billion KRW, about five times that of the same period last year (10.3 billion KRW), and increased by 23% compared to the previous quarter.

Non-interest income also recorded 8.5 billion KRW in the third quarter due to the expansion of partnerships including Upbit. This figure increased by 11.1 billion KRW from a loss of 2.6 billion KRW in the same period last year, showing stability despite fluctuations in virtual asset prices during this period.

Seohosung, CEO of K-Bank, said, "We will enhance the net interest margin structure by diversifying deposit and loan products and expand the 'fee business' to actively transition into a digital financial platform business. In addition, we will actively expand loans to mid- to low-credit borrowers and fulfill our responsibilities and roles as Korea's first internet bank."

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