K bank turns a profit in second quarter, its first ever

K Bank headquarters in Jongno District, central Seoul, in February 2020. [NEWS1]

K bank is finally making money.

In the second quarter, the internet-only bank’s net profit was 3.9 billion won ($3.5 million), according to a preliminary report, compared to a 44.9-billion-won net loss in the same period a year earlier.

K bank, 34 percent owned by BC Card, has lost money every year since it was founded in 2017, with the losses growing steadily.

It reported a 118.1-billion-won net loss last year, a 101.6-billion-won net loss in 2019 and a 79.6-billion-won net loss in 2018.

K bank said 4 million new users have been added to its service in the first half as investors flocked to the internet-only bank to invest in the cryptocurrency market through Upbit.

K bank provides accounts for Upbit in an exclusive arrangement, and investors must use the bank to invest via the exchange.

They signed the partnership in June last year.

K bank had a total of 6.28 million users as of late July, with most of its users in their 20s and 30s, according to a report from Samsung Securities.

Loans outstanding totaled 5.51 trillion won while deposits were 10.62 trillion won as of late July.

Underperformance in the cryptocurrency market may have slowed K bank’s growth, with the increase in user numbers falling in recent months. The number of users in July was up 1.5 percent from June. It added more than 10 percent on-month to 6.05 million users in May.

K bank is projected to generate 15.9 billion won in net profit this year, according to analyst Kim Jae-woo from Samsung Securities.

Kim added that low interest rates and surging housing prices, and the major initial public offerings in the second half, will drive demand for loans.

Suh Ho-sung, K bank CEO, said the bank will make more loans to people with relatively weak credit ratings and focus on growth driven by digital innovation.

K bank aims to go public by 2023, according to local media reports.

BY JIN MIN-JI [jin.minji@joongang.co.kr]