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.
KakaoBank posts all-time-high profits for H1
KakaoBank logo / Courtesy of KakaoBank
By Anna J. Park
Record-high earnings ascribed to stable risk management and increase in customers
By Anna J. Park
KakaoBank has logged a record-high operating profit and net profit for the first half of this year, fueled by solid customer growth and sophisticated risk management to control delinquency rates.
According to the internet-only bank's earnings call on Wednesday, KakaoBank posted an operating profit of 248 billion won ($191 million) during the first half, a 52 percent increase from the same period last year. The bank recorded a net profit of 183.8 billion won, a 48.5 percent rise year-on-year.
“Despite the fall in earnings from net interest margin (NIM) and conservative reserve requirement, KakaoBank has posted its all-time-high earnings ever for the first half of this year,” the bank announced, Wednesday. “The growth is attributed to an expansion in providing medium and low credit loans as well as offering competitive interest rates for customers,” the digital bank said.
As to the latest quarterly performance, the bank posted an operating profit of 111.8 billion won for the second quarter of this year, up 50.3 percent year-on-year, and a net profit of 82 billion won, rising by 43.9 percent over the same period.
Specifically, the bank's aggregated balance of loans, deposit amounts, credit loans offered for lower credit brackets and mortgage loans all logged double-digit growth year-on-year. Earnings from NIM, meanwhile, posted 2.26 percent in the second quarter, which is a fall of 0.36 percentage points from the first quarter this year.
During the earnings call, the digital bank also stressed that the delinquency rate for the second quarter fell to 0.52 percent, from the first quarter's 0.58 percent.
“In the face of the rise in the amount of all credit balances, ranging from overdraft and mortgage loans to credit loans, the bank's delinquency rate has declined, owing to its successful risk management through sophisticating credit assessment models,” Kim Seok, COO of the bank, said during a conference call.
“While the overall delinquency rates of credit loans in the country stand at 0.75 percent, KakaoBank logged 0.71 percent. The result shows the bank's stable management of financial soundness, especially considering that the amount of low- and medium-credit loans during the four months of the year rose by 25.5 percent year-on-year,” Kim explained.
The bank's mortgage loan products, in particular, are expected to see a 30 percent increase by the end of this year.
Meanwhile, the bank's customer base rose to a whopping 21.7 million, as of the second quarter, an over 2 percent rise from 21.18 million logged at the end of the first quarter. The average monthly active users (MAU) during the second quarter also increased to 17.3 million, a hike of more than 1 million people from the first quarter's 16.3 million. The bank attributed the rise largely to the increased presence of middle-aged customers. As of the second quarter, 64 percent of people in their 40s are using KakaoBank, which is a sharp rise from 55 percent in the second quarter of last year.
The bank vows to continue expanding credit during the latter half of the year while managing credit assessments and risk management. It also plans to launch new investment services in bonds and public offering stocks.