K-Bank reported disappointing results for the first half of the year. Despite an increase in personal business loans and interest income, a decline in non-interest income due to reduced bond sale profits hindered performance.
On July 30, K-Bank announced a net profit of 600 billion won for the first half of the year, a 28.6% decrease from 842 billion won during the same period last year. In the second quarter alone, profits plummeted 60.7% to 268 billion won.
The primary reason for the decline was the reduction in non-interest income. For the first half, non-interest income totaled 233 billion won, down 68% from 733 billion won in the same period last year. K-Bank attributed this drop to the decreased profits from bond sales.
Additionally, the cost burden from expanded lending increased. The provision for credit losses for the first half rose to 513 billion won, a 24.2% increase from 413 billion won the previous year. Although the credit loss ratio improved to 1.08% from 1.13% in the second quarter of last year, the overall increase in lending volume led to higher costs.
In contrast, the core operating segment, interest income, showed improvement. K-Bank's interest income for the first half reached 2.53 trillion won, a nearly 20% increase from 2.11 trillion won in the same period last year. The net interest margin (NIM) also rose to 1.59%, up 0.21 percentage points from 1.38% in the first half of last year.
As of the end of the second quarter, the outstanding loan balance increased by 13.8% year-on-year to 19.8 trillion won. Despite ongoing management of household loans, the growth in personal business loans drove this increase, with the balance of personal business loans more than doubling to 3.3 trillion won over the past year.
Key financial indicators remained stable. The delinquency rate at the end of the second quarter was 0.60%, similar to 0.59% in the same period last year, while the ratio of non-performing loans was managed at 0.59%. Notably, the delinquency rate for personal business loans decreased to 0.51%, down from 0.93% a year earlier. The Bank for International Settlements (BIS) ratio also maintained a high level of capital adequacy at 20.02%.
K-Bank plans to strengthen its growth drivers in the second half by focusing on expanding personal business loans and enhancing capabilities in digital asset-related businesses. The bank aims to broaden the types of properties and purposes for real estate-backed loans for business owners and is laying the groundwork for a non-face-to-face loan service for small and medium-sized enterprises, targeting a launch next year.
A K-Bank official stated, "We have strengthened our revenue base by expanding our customer base and achieving qualitative and quantitative growth in personal business loans. In the future, we will secure a leading position in the expanding personal business market and in future financial areas such as digital assets and stablecoins to solidify our foundation for sustainable growth."
* This article has been translated by AI.
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