Internet-only lender KakaoBank said it posted another record year on the back of rising noninterest income such as fees, even as interest income fell. The company said it will focus this year on overseas business and mergers and acquisitions to secure longer-term growth drivers.
KakaoBank said in a regulatory filing on Tuesday that its net profit for last year totaled 480.3 billion won, up 9.1% from 440.1 billion won a year earlier, marking its highest annual result. Interest income declined amid factors including falling market rates, but gains in noninterest income kept overall growth intact.
Of last year’s operating revenue of 3.0836 trillion won, interest income was 1.9977 trillion won, down 2.9% from 2.0565 trillion won the previous year. Noninterest income rose 22.4% to 1.0886 trillion won, topping 1 trillion won for the first time and accounting for more than 35% of operating revenue. Annual fee and platform revenue came to 310.5 billion won, helped by growth in its loan and investment platform and advertising business.
KakaoBank said it plans to roll out new services this year to diversify revenue. It said it will launch a foreign-currency account in the second quarter and services for foreign customers in the fourth quarter to strengthen its deposit business with new customer segments.
The bank also said it will expand overseas operations. It said Indonesia’s Superbank, in which KakaoBank has invested, went public, prompting a change in accounting treatment for its stake and resulting in a first-quarter valuation gain of 99.3 billion won. KakaoBank also said it is speeding up the establishment of a Thailand “virtual bank” in cooperation with Thai financial holding company SCBX.
To bolster existing businesses and enter new ones, KakaoBank said it is reviewing acquisitions focused on nonbank financial areas such as payments and capital companies.
Kwon Tae Hoon, KakaoBank’s chief financial officer, said a capital company is a positive M&A target because it would allow entry into new markets that internet banks have not been able to reach. He said profitability has weakened after a period of rising rates, but the financial contribution could be significant when considering return on equity levels during boom periods.
* This article has been translated by AI.
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