KakaoBank's First-Nine-Month Net Profit Hits an "All-Time High" at KRW 469.8 Billion

Up 25.2% From the First Nine Months of Last Year
Balanced Growth in Loan Interest and Non-Interest Income

KakaoBank posted its highest-ever net profit for the first nine months of the year. The results were driven by balanced growth in loan interest income and non-interest income, underpinned by an expanding customer base. Building on its improved performance this year, the bank also plans to raise its shareholder return ratio to 50%.

KakaoBank said on November 4 that its net profit for the first nine months of this year rose 25.2% from KRW 375.1 billion a year earlier to KRW 469.8 billion. This represents 97.8% of last year's net profit of KRW 480.3 billion, the highest annual figure on record. Net profit for the third quarter also increased 27.2% from the same period last year to KRW 141.7 billion.

Both loan interest income and non-interest income increased. For the first nine months of the year, loan interest income totaled KRW 1.6409 trillion and non-interest income KRW 888.3 billion, up 10.0% and 6.4%, respectively, from a year earlier. In the third quarter, loan interest income rose 18.2% from KRW 492.2 billion in the same period last year to KRW 582 billion, while non-interest income grew 9.7% to KRW 298.8 billion.

In the interest income segment, loan growth was limited by tighter management of household lending, but growth in loans to individual business owners and an increase in the net interest margin (NIM) drove results. At the end of the third quarter, the loan balance stood at KRW 48.595 trillion, up KRW 3.36 trillion, or 7.4%, from a year earlier. While loans to individual business owners declined across the banking sector, KakaoBank expanded its lending, bringing its balance of such loans to KRW 4.036 trillion at the end of the third quarter, an increase of KRW 349 billion from the previous quarter. Loans to individual business owners accounted for 58% of the net increase in the total loan balance. The bank also newly extended about KRW 510 billion in loans to medium- and low-credit borrowers in the third quarter, bringing the cumulative amount through the third quarter to about KRW 1.5 trillion.

At the end of the third quarter, deposits totaled KRW 71.805 trillion, up KRW 4.7 trillion from the previous quarter and exceeding KRW 70 trillion for the first time. Both demand deposits and savings deposits increased. The number of users of group accounts and their balance stood at 13.3 million and KRW 12.1 trillion, respectively. KakaoBank plans to expand its deposit portfolio, including by launching a "Stealth Account" this month, based on the concept of a "secret account only I know about."

Growth in non-interest income was supported by services such as loan comparison, investment and payments. Cumulative fee and platform revenue for the first nine months of the year reached KRW 256.3 billion, up 10.9% from a year earlier. In particular, the balance of funds sold surpassed KRW 1 trillion in September last year and rose 90% to KRW 1.9 trillion in the year since. In the third quarter, loans from partner financial institutions originated through KakaoBank's loan comparison service totaled KRW 1.4 trillion, up 14% from the same period last year. Check-card payments totaled KRW 6.3 trillion. Non-interest income accounted for about 35% of operating revenue in the first nine months of the year.

For the third quarter, NIM was 2.15%, up 0.02 percentage points from the previous quarter and 0.34 percentage points from a year earlier. Low-cost deposits accounted for 55% of deposits, above the banking sector average of 40%, which also appears to have eased funding cost pressures. The delinquency rate in the third quarter was 0.49%, down 0.02 percentage points from the previous quarter and 0.04 percentage points from a year earlier. The non-performing loan (NPL) ratio also fell to 0.53%, down 0.01 percentage points and 0.02 percentage points, respectively, over the same periods.

KakaoBank's customer base is also growing. At the end of the third quarter, it had 27.94 million customers, up 1.7 million from the same period last year. Monthly active users (MAU) reached a record 20.57 million in the third quarter. An analysis found that three out of every four customers (75%) who joined KakaoBank over the past year were minors or people aged 50 and older. The cost-to-income ratio (CIR) improved from 36.9% at the end of last year to 35.8% on a cumulative basis through the third quarter. Return on equity (ROE) stood at 9.40%.

KakaoBank plans to expand its business into non-bank lending and artificial intelligence (AI) services. In June, it signed a stock purchase agreement to acquire a 100% stake in Mastern Capital, and plans to extend its digital finance capabilities into the capital market. From the end of this year, it will accelerate efforts to enhance its AI customer services and evolve them into an AI financial assistant.

In line with its "growth-focused value-up strategy" announced in 2024, KakaoBank plans to pursue sustainable growth, targeting KRW 100 trillion in assets by 2027 and an ROE of 15% by 2030. It also plans to raise its shareholder return ratio on earnings for the current fiscal year to 50%, pursuing sustainable growth alongside enhanced shareholder value.

This content was produced with the assistance of AI translation services.