K Bank's Net Profit in 1Q This Year Reaches 24.5 Billion KRW... Surpasses Last Year's Total Profit

Interest Income 82.4 Billion Won... 216% Increase YoY
Mid-to-Low Credit Proportion Also Rises from 16.6% to 20.2%

[Asia Economy Reporter Minwoo Lee] Internet-only bank K Bank recorded a net profit exceeding 24 billion KRW in the first quarter of this year, surpassing last year's annual profit scale ahead of schedule.

K Bank announced on the 16th that it posted a provisional net profit of 24.5 billion KRW in the first quarter of this year. This amount exceeds last year's annual net profit of 22.5 billion KRW. The increase is attributed to the steady growth in the number of customers and loan and deposit balances.

The number of K Bank customers increased from 7.17 million at the end of last year to 7.5 million at the end of the first quarter this year. During the same period, loan balances rose from 7.09 trillion KRW to 7.81 trillion KRW, and deposit balances increased from 11.32 trillion KRW to 11.54 trillion KRW.

This is interpreted as a result of business activities such as raising deposit interest rates and launching special promotions since the beginning of the year. In February, K Bank raised interest rates on deposit products such as savings and Challenge Box. In the same month, it lowered the fixed interest rate on apartment mortgage loans by 0.5 percentage points (p) and conducted a special promotion with a limit of 100 billion KRW. In March, the interest rates on credit loan products were lowered twice within a month by up to 0.3%p and up to 0.4%p, respectively.

Meanwhile, interest income in the first quarter reached a record high of 82.4 billion KRW. Compared to the same period last year, loans increased by about 4 trillion KRW and deposits by about 3 trillion KRW, resulting in a 216% increase in interest income year-on-year. Non-interest income, including linked loan fees and partner firm pump banking fees, which recorded a loss of 100 million KRW in the first quarter of last year, reached 1.9 billion KRW. The bank has maintained profits for four consecutive quarters since the second quarter of last year.

Improved profit strength also enhanced management efficiency. The Cost-to-Income Ratio (CIR), which represents selling and administrative expenses relative to operating profit, decreased from 61% at the end of last year to 40% in the first quarter of this year.

The proportion of mid-to-low credit loans also increased significantly from 16.6% at the end of last year to 20.2% in the first quarter of this year. As of last month, it reached 21.7%. This is attributed to the introduction in February of a specialized credit scoring model (CSS) for mid-to-low credit borrowers and thin-file borrowers, which combines financial information such as income level and loan history with telecommunications and shopping data. Since the introduction of this model, the approval rate and loan limits for mid-to-low credit borrowers and thin-file borrowers have increased, while the effective interest rates have decreased, attracting these customers.

Seo Hoseong, CEO of K Bank, said, "This year, we will pursue 'balanced growth' by enhancing the core competitiveness of banking while evolving into a platform through customer acquisition and activity reinforcement. At the same time, based on the recently completed CSS advancement, we plan to steadily expand the proportion of mid-to-low credit borrowers."

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