Kakao Bank users top 2 mil. in 2 weeks

By Lee Min-hyung

Kakao Bank has attracted more than two million subscribers in two weeks after opening the nation’s second internet-only bank.

The banking service arm of Kakao is creating a nationwide sensation, accumulating 1 trillion won ($880 million) in savings after launching the online bank late last month. The company has so far lent a total 770 billion won in loans for the millions of users here.

Kakao is a mobile messenger app titan servicing more than 100 million users across the globe, enjoying an unmatched dominance in Korea.

“To deal with the better-than-expected market responses, we are running a special task force for 24 hours,” a Kakao Bank official said. “We are also mulling over opening a second customer service center, allocating 500 employees focusing on counseling and complaints for the growing numbers of subscribers.”

In line with the popularity of the banking platform, the company also said it has issued more than 1.4 million Kakao Friends debit cards.

Last month, Kakao launched the mobile bank after receiving approval for its listing on the benchmark KOSPI. This came months after the nation’s first internet-only bank, K Bank, which is run by a dominant fixed-line operator KT, made its debut in April.

K Bank did not expect the exploding popularity of Kakao Bank, which surpassed the number of K Bank subscribers in less than three days after its launch.

Amid the toughening rivalry, K Bank raised the annual interest rate this week for its savings account users to 2.1 percent from 2.0 for the first time after its debut. As of the end of last month, K Bank has 400,000 subscribers, falling far behind latecomer Kakao.

Market experts attribute the sensation to Kakao’s user-friendly mobile interface.

“In terms of initial market response, Kakao Bank is outperforming K Bank, which is suffering from tepid growth since reaching 300,000 subscribers in mid-May,” eBest Investment & Securities analyst Jun Bae-seung said.

This is because of Kakao Bank’s platform power and series of user-oriented designs and conveniences, the analyst said.

Backed by this popularity, Kakao shares surged to a record 124,500 won at one time on Aug. 1, up more than 25 percent from 99,000 won on July 14.

Amid the rosy outlook, Samsung Securities revised up a target price for the company to 130,000 won earlier this month.

“Despite the sensation, Kakao is unlikely to chalk up massive profits from the online bank on a short-term basis, but the company has enough room for growth in other platform businesses such as Kakao Games and Kakao Taxi,” Samsung Securities analyst Oh Dong-hwan said.