'IPO Third-Time Challenger' K Bank Posts Cumulative Net Profit of 103.4 Billion Won in Q3

Slight Decline Year-on-Year,
But Cumulative Net Profit Surpasses 100 Billion Won for Two Consecutive Years
Corporate Loan Growth Accelerates

Exterior view of K Bank headquarters. Provided by K Bank

K Bank announced on November 13 that its cumulative net profit for the first three quarters reached 103.4 billion won.

This figure represents a 15.5% decrease compared to the previous year (122.4 billion won). The decline appears to be due to factors such as the recent government regulations on household loans, which have had a slight impact on performance. In this regard, K Bank stated, "We have continued to grow, focusing on corporate loans, and have recorded cumulative net profits in the 100 billion won range for two consecutive years, demonstrating our ability to generate profits."

Net Profit Declines, but Corporate Loans Grow

Net profit for the third quarter came in at 19.2 billion won, down 48.1% from the same period last year. This was attributed to an increase in general administrative expenses, driven by continued IT investment and higher marketing costs aimed at business growth.

As of the third quarter, K Bank's deposit balance stood at 30.4 trillion won and its loan balance at 17.9 trillion won, up 38.5% and 10.3% year-on-year, respectively.

The expansion in deposit balances was led by an increase in demand deposits. K Bank's parking account, "Plus Box," offers an industry-leading interest rate of up to 2.2%. The balance grew by more than 5 trillion won, rising from 7 trillion won last year to 12 trillion won. Demand deposits account for 65.6% of personal deposits.

The loan balance continued to grow, centered on corporate loans. In September, K Bank surpassed a cumulative supply of 3 trillion won in loans to individual business owners. As of the third quarter, the corporate loan balance surged 84.1% year-on-year to 1.93 trillion won. The bank explained that half of this year's loan balance growth came from corporate loans, reducing its reliance on household loans.

Interest income for the third quarter rose 3.7% year-on-year to 111.5 billion won. Non-interest income increased 90.8% to 22.9 billion won compared to the same period last year. This was due to increased returns from money market funds (MMFs) and higher fund banking fees as virtual asset trading became more active. Revenue from loan comparison services and platform advertising also expanded.

The delinquency rate for the third quarter was 0.56%, marking a decline for three consecutive quarters. The ratio of substandard and below loans was 0.54%, and the Bank for International Settlements (BIS) capital adequacy ratio stood at 15.01%. The net interest margin (NIM) was 1.38%.

In the third quarter, the average share of mid- to low-credit loans in K Bank's outstanding loans was 33.1%, and the share of new loans was 33.9%, both exceeding the target ratio of 30%.

K Bank plans to accelerate its growth by expanding corporate loans, transitioning to artificial intelligence (AI), and strengthening its leadership in digital assets. Last month, the bank extended its partnership with Upbit for real-name deposit and withdrawal accounts for another year, and in July, it applied for a trademark for a stablecoin. A K Bank representative stated, "We will further accelerate our growth through productive finance initiatives, digital asset innovation, and AI transformation."

Third Attempt at IPO

On November 10, K Bank submitted a preliminary review application to the Korea Exchange for listing on the KOSPI market. The goal is to be listed on the KOSPI in the first half of next year. This marks K Bank's third attempt at an initial public offering (IPO).

In September 2022, the bank aimed to go public with a hoped-for valuation of around 7 trillion won, but did not proceed with the public offering process as investor sentiment in the IPO market cooled during the interest rate hike cycle. In October last year, K Bank made another attempt at a demand forecast, but withdrew due to a poor market response. The target valuation at that time was up to 5.3 trillion won.

Due to an agreement with its financial investors (FIs), K Bank is required to complete the listing by the first half of next year, making it imperative for the bank to succeed in its IPO this time.

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