KakaoBank posts record cumulative earnings on robust fee-based services, platform business

KakaoBank logo / Courtesy of KakaoBank

KakaoBank, the nation’s largest internet-only lender, recorded its highest-ever cumulative earnings, with net profit surpassing 370 billion won ($256 million) in the first three quarters of this year, the company said Wednesday.

Despite a decline in interest income caused by the government’s tighter controls on household lending, the bank offset the impact through growth in fee-based and platform revenues.

For the July-September period, the bank reported a net profit of 111.4 billion won, down 10.3 percent from 124.2 billion won a year earlier. Still, cumulative net profit for the first three quarters rose 5.5 percent year-on-year to 375.1 billion won, marking a new record for the company.

“We broadened both our lending and deposit portfolios, along with noninterest income streams, driven by continued customer growth and increasing platform traffic,” a KakaoBank official said.

In the first three quarters, the bank’s operating revenue totaled 2.33 trillion won, with interest income reaching 1.49 trillion won, a 3.1 percent decrease from 1.54 trillion won a year earlier.

Although loan balances expanded, the decline reflected a narrowing net interest margin amid falling market rates.

By contrast, cumulative noninterest income for the first three quarters jumped 26.7 percent to 835.2 billion won from 659.1 billion won a year earlier.

The bank attributed the growth to efforts to diversify its portfolio, including fee-based services, platform businesses and treasury operations, supported by rising customer traffic and deposit inflows.

Fee and platform income increased 4.7 percent from a year earlier to 231.2 billion won, driven by the expansion of its loan comparison, advertising and investment platform services.

Noninterest income accounted for about 36 percent of total operating revenue.

The bank also continued to expand its customer base, with the number of users rising to 26.24 million by the end of the third quarter and monthly active users totaling 19.97 million.

“We will strengthen our future competitiveness and drive innovation in the financial industry through global expansion and the evolution of our artificial intelligence-powered app,” the official added.