Loan Growth Praised... KakaoBank Receives 'AA+' Rating from NICE Credit Rating

Home Mortgage and Mid-to-Low Credit Borrower Loan Growth Praised
Capital Soundness Also Recognized

[Asia Economy Reporter Minwoo Lee] KakaoBank has received an 'AA+/Stable' credit rating from NICE Credit Rating.

KakaoBank announced on the 11th that it had obtained this credit rating from NICE Credit Rating. The AA+ rating acquired this time is the second highest, following the highest rating of AAA.

NICE Credit Rating highly evaluated KakaoBank's growth potential and performance outlook. It cited the growth of its main household credit loan market share to around 6% and the increase in interest income due to the improvement in net interest margin (NIM), which raised the return on assets (ROA) from 0.46% in 2020 to 0.71% in the first quarter of this year.

It also paid attention to the growth of non-face-to-face mortgage loans and credit loans for low- to mid-credit borrowers launched last February. It forecasted an improved market position in the mid to long term and expected the scale of profits to increase in the medium term due to NIM improvement.

It was explained that capital adequacy achieved through the initial public offering (IPO) and securing operating profit also contributed to the credit rating assessment. As of the end of March, KakaoBank's total capital ratio based on the Basel Committee on Banking Supervision (BIS) was 36.9%, more than twice the average of 15.52% for all banks. The BIS total capital ratio is calculated by dividing total capital by risk-weighted assets, and a higher ratio is considered to indicate a healthier financial condition.

NICE Credit Rating stated, "With the new share IPO worth 2.5 trillion won last year, KakaoBank's equity capital increased from about 2.9 trillion won in June last year to about 5.6 trillion won as of March," adding, "It is expected to maintain a very excellent level of capital adequacy."

A KakaoBank official said, "We will do our best to steadily maintain operating profit and capital soundness to improve our credit rating."

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