K-Bank Achieves Record High Performance, 3Q Net Profit 25.6 Billion KRW... 52% Increase YoY

5 Consecutive Quarters of Surplus
"Swift Interest Rate Response and Cost Efficiency Prove Effective"

[Asia Economy Reporter Minwoo Lee] K Bank recorded a net profit of 25.6 billion KRW in the third quarter of this year, marking the highest quarterly performance in its history. This is attributed to its rapid adjustment of product interest rates in response to market conditions, along with cost-efficiency strategies through efforts to improve its business structure.

K Bank announced on the 7th that it posted a preliminary net profit of 25.6 billion KRW in the third quarter of this year. This represents an increase of 52.4% compared to the same period last year and 20.2% compared to the previous quarter. It is the highest quarterly performance ever, continuing a profit streak for five consecutive quarters since the third quarter of last year. As a result, the cumulative net profit up to the third quarter reached 71.4 billion KRW, more than eight times the 8.4 billion KRW recorded during the same period last year.

The scale also expanded. In the third quarter of this year, K Bank's customer base reached 8.01 million, an increase of 180,000 from the previous quarter. Deposits stood at 13.49 trillion KRW, and loans at 9.78 trillion KRW, increasing by 1.31 trillion KRW and 1.05 trillion KRW respectively compared to the previous quarter.

K Bank explained that the background of this performance was its agile response to the interest rate hike period, continuing growth in deposits and loans, and successful cost-efficiency efforts.

For deposits, the rapid interest rate hikes and the launch of short-term deposit products were effective. Earlier, K Bank raised the interest rate of the ‘Main Transaction Preferential Installment Savings’ by up to 0.6 percentage points annually in early July, followed by an increase of up to 0.8 percentage points for the ‘CodeK Installment Savings’ at the end of August. Additionally, before the Bank of Korea's Monetary Policy Committee decided to raise the base rate, the interest rate for ‘CodeK Time Deposit’ was also increased by up to 0.7 percentage points.

The parking account ‘Plus Box’ also raised its interest rate twice in July and September, increasing from 1.3% annually to 2.3%. Subsequently, it raised rates twice more last month, reaching an industry-leading 2.7% annually.

Other initiatives included the ‘100-Day Deposit,’ which offers a 3% annual interest rate benefit limited to a 100-day subscription period for ‘CodeK Time Deposit,’ and the ‘Early! New Year Preparation Deposit Event,’ which offers a 3.1% interest rate for deposits maturing on January 1 next year.

On the loan side, in the third quarter, K Bank continuously lowered interest rates on credit loans, apartment mortgage loans, and jeonse (key money) loans. For apartment mortgage loans, fixed-rate products saw three rate cuts in mid-July, early August, and late September. During this period, jeonse loans also had their rates lowered four times, offering some of the lowest rates in the industry.

Credit loan rates were aggressively reduced as well, recording the lowest levels among the three internet-only banks across all credit rating categories for new, lump-sum repayment credit loans as of July, according to the Bank Federation's public disclosures.

Cost efficiency also improved. 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 37.9% at the end of the third quarter this year. This is a 1.1 percentage point reduction compared to the previous quarter.

Meanwhile, the net interest margin (NIM) at the end of the third quarter was 2.44%, and the delinquency rate was 0.67%. The Bank for International Settlements (BIS) total capital ratio stood at 14.51%.

Seo Hoseong, CEO of K Bank, said, "Despite difficult conditions such as a loan market slump due to the base rate hikes, our efforts to expand customer benefits led to this record performance. We will continue to discover differentiated digital financial products and turn the rapidly changing financial environment into an opportunity for K Bank to leap forward."

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