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Kakao Bank hits record high quarterly profit in Q1

By Choi Ji-won

Published : May 8, 2024 - 15:14

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(Kakao Bank) (Kakao Bank)

South Korean online-only lender Kakao Bank announced Wednesday that its net profit hit a record high of 111.2 billion won ($81.44 million) in the first quarter, a 9 percent increase from the previous year.

Operating profit for the same period was 148.4 billion won, up 8.8 percent from last year.

The bank said it achieved balanced growth across various business sectors, driven by a steady increase in customer numbers and the successful launch of products and services.

Total customer numbers grew to 23.56 million in the first quarter, a gain of around 700,000 from the previous quarter. Monthly active users set a new record at 18 million, while weekly active users climbed to 13.22 million.

The company reported it is broadening its customer base, with approximately 80 percent of South Koreans in their 20s and 30s using the online bank, along with about half of those in their 40s and 50s.

This surge in customer numbers fueled a rise in deposits, bringing the total deposit balance to 53 trillion won by the end of the first quarter, a 5.8 trillion won increase from the previous term.

Demand deposits, which offer immediate withdrawals, marked the company's largest-ever quarterly growth of 4 trillion won, partly due to the successful expansion of the bank's shareable "meeting accounts," which grew by 1 trillion won during this period, the firm explained.

Thanks to its low interest rates, the online lender saw its credit balance increase by 2.6 trillion won to 41.3 trillion won in the first quarter.

This was mainly due to a surge in housing-related loans, boosted by a mortgage refinancing service launched earlier this year. The total balance for home purchase mortgages jumped 30 percent from the end of last year to 11.8 trillion won, while mortgages for rental deposits reached 12.2 trillion won, up 200 billion won in three months.

Kakao Bank's position as a platform for housing mortgage refinancing has strengthened, with industry estimates showing that it holds about 31 percent of the country's housing mortgage refinancing market and 46 percent of the market for rental deposit refinancing.

The bank also noted that the proportion of its new mortgage loans for refinancing rose from 50 percent last year to 62 percent in the first quarter.

Kakao Bank's revenue from interest and platform services increased by 12.8 percent to 71.3 billion won in the latest quarter.

The bank's financial soundness also improved. Despite mid-to-low credit loans rising to 31.6 percent of the total credit balance, the delinquency rate decreased to 0.47 percent, down by 0.02 percent from the previous quarter and 0.11 percent from a year earlier. The net interest margin, a key indicator of profitability, improved to 2.18 percent, while the cost-to-income ratio dropped to 35.2 percent.

A company official added, "We aim to create a competitive deposit portfolio by expanding our customer base and fostering continued growth through stable loan management and efficient capital utilization."