Kbank reports 16.8-billion-won net profit in the third quarter
Kbank posted 16.8 billion won ($14.3 million) in net profit in the third quarter, raising expectations the internet-only bank may turn to profit this year for the first time ever.
The country's first internet bank has been in the red every year since its formation in April 2017.
In the first three quarters of 2021, the bank logged 8.4 billion won on a net basis. It is the first time the company generated profit in any year through September.
The second quarter was the first quarter the bank turned a profit, reporting 3.9 billion won on a net basis. In the first quarter, it posted a 12.3-billion-won net loss.
The bank said increased loan-deposit margins led earnings growth. It has mostly been a profitable year for local banks as households and companies borrowed heavily under expansionary monetary policies introduced to keep the country's economy from stagnating.
The country's major banking groups — KB Financial Group, Shinhan Financial Group, Hana Financial Group and Woori Financial Group — announced last month that their profits through the third quarter have already surpassed profits posted full-year 2020.
According to Kbank, its net interest income increased by about five-fold on year in the third quarter from 10.3 billion won to 50.2 billion won.
A growing user base also boosted earnings. A partnership with Upbit, the country's largest cryptocurrency exchange by trade volume, led to a jump in Kbank’s client count. Traders at Upbit need accounts in their own names provided by Kbank for won-based trading.
With the cryptocurrency market growing rapidly this year, the number of bank account holders rose from 2.19 million at the end of last year to 6.6 million at the end of September, the bank said in a statement.
"As more people get to know about the services offered at Kbank through Upbit, it's true that users for a range of our services grew," a spokesperson from Kbank said.
The partnership led to growth of the bank's non-interest income.
Kbank's non-interest income in the third quarter was 8.5 billion won, an 11.1 billion won on-year increase compared to a 2.6-billion-won loss posted in the third quarter last year. The agreement with Upbit began in June last year.
"We plan to diversify our deposit and loan product offerings to further improve our loan-deposit margins and expand commission businesses," said Suh Ho-sung, CEO of Kbank in a statement. "We also hope to fulfill our responsibility as the country's first internet bank by expanding loans to customers with poor credit."
On Tuesday, KakaoBank announced 52 billion won in net profit in the third quarter, a 28-percent on-year increase, as its user base grew.
While the internet bank’s services are popular mostly with those in their 20s and 30s, 60 percent of the new clients in the year through the end of September were in their 40s, the bank said. The number of KakaoBank users increased by 13 percent from 15.4 million at the end of 2020 to 17.4 million at the end of the third quarter.
Through September, the company logged 167.9 billion won in net profit, a 95.6 percent jump on year.
The bank said it plans to introduce mortgage next year.
BY KIM JEE-HEE [firstname.lastname@example.org]