SEOUL, February 04 (AJP) - South Korean internet-only lender KakaoBank reported record annual earnings on Wednesday with pledges to pursue overseas expansion and mergers and acquisitions to secure future growth.
In a regulatory filing, KakaoBank said net profit last year rose 9.1 percent to a record 480.3 billion won ($360 million), compared with 440.1 billion won a year earlier. The bank said declining market interest rates weighed on interest income, but noninterest income posted strong growth.
Operating revenue reached 3.08 trillion won. Interest income fell 2.9 percent to 2 trillion won from 2.06 trillion won the previous year, while noninterest income jumped 22.4 percent to 1.1 trillion won, surpassing 1 trillion won for the first time and accounting for more than 35 percent of total operating revenue.
Annual fee and platform revenue rose to 310.5 billion won, supported by growth in lending and investment platform services as well as advertising operations, the bank said.
To diversify revenue sources, KakaoBank plans to introduce new services this year, including foreign-currency accounts in the second quarter and financial services for foreign customers in the fourth quarter to strengthen its deposit base.
The bank is also expanding overseas operations. Superbank in Indonesia, in which KakaoBank holds a stake, completed an initial public offering, prompting a change in accounting treatment and generating a first-quarter valuation gain of 99.3 billion won, the bank said.
KakaoBank is also moving ahead with plans to establish a virtual bank in Thailand in partnership with Thai financial holding company SCBX.
To reinforce existing businesses and expand into new areas, KakaoBank said it is reviewing acquisition opportunities focused on nonbank financial sectors, including payments and capital companies.
Chief Financial Officer Kwon Tae-hun said acquiring a capital firm could help the bank enter market segments not easily accessible to internet-only lenders.
While profitability has softened following the recent interest rate cycle, such a deal could deliver strong returns during future rate upturns, he said.
* This article, published by Aju Business Daily, was translated by AI and edited by AJP.
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