Anna Jiwon Park has been covering the politics at The Korea Times since the summer of 2024, when she joined the press pool for the Office of the President in Korea. Prior to that, she spent about five years reporting extensively on financial markets, regulatory authorities and the financial industry. She joined The Korea Times in 2019 after spending eight years as a broadcast journalist at Arirang TV, Korea’s leading global broadcaster, covering politics, defense and culture.
Kakao Bank posts first annual surplus in 2019
By Anna J. Park
By Anna J. Park
Kakao Bank, one of the nation's two internet-only banks, recorded its first annual surplus in 2019, since its launch in July 2017, on the back of solid growth in earnings from its loan business.
The bank said that it posted a net profit of 13.7 billion won ($11.3 million) last year, a major turnaround from net losses of 21 billion won in 2018 and 104.5 billion won in 2017.?
The lender's total assets reached 22.7 trillion won at the end of last year, up 86 percent from the previous year. The number of customers also increased to 11.28 million, over a fifth of South Korea's population.
Kakao Bank, led by CEO Yun Ho-young, explained that part of the reason behind the bank's turnaround lies in the rise in its interest earnings from new loans. The mobile-based bank's credit balance stood at 14.8 trillion won at the end of last December, up 63 percent from the previous year.
Non-interest profits, such as fees and charges, also contributed to the bank's surplus. The bank has allowed users to open a securities account on its mobile platform, after it partnered with Korea Investment & Securities and NH Investment & Securities.
“Kakao Bank is becoming popular with customers, as the number surpassed the 10 million mark last year. Based on our various products and services, the bank achieved a surplus in less than three years since its founding,” a Kakao Bank official told The Korea Times. He added that the bank aims to achieve further growth this year through innovative financial products and services.
In contrast, K bank, which was launched in April 2017 as the nation's first internet only bank just three months before Kakao Bank, has suffered from ballooning losses and has virtually suspended the extension of new loans due to a lack of capital.
The plan to expand its capital base fell through after the National Assembly recently voted down a revised bill on internet-only banks, which would have paved the way for telecommunications giant KT to become K bank's majority shareholder by injecting 500 billion won in new capital.
The bank is trying to find a breakthrough to normalize its business by appointing new CEO Lee Mun-hwan last week for his expertise in digital finance. He previously served as CEO of BC Card.
The new chief's two-year term will start, if his appointment is approved at a general shareholders meeting at the end of the month.