KakaoBank, a banking subsidiary of IT giant Kakao, announced on May 8 that its net profit for the first quarter rose by 9.1% year-on-year to $81.52 million (111.2 billion won), marking its largest quarterly profit to date.
The bank’s operating income for the first quarter reached $108.7 million (148.4 billion won), up 8.8% from 136.4 billion won a year earlier. Interest income for the period was $426.6 million (582.3 billion won), an increase of 29.0% from 451.5 billion won. Non-interest income also grew, reaching $99.34 million (135.6 billion won), up 24.4% from 109.9 billion won.
The significant increase in net profit is attributed to KakaoBank’s strategy of offering lower interest rates than other banks, leading to a notable rise in loan assets, including mortgages. As of the first quarter, the bank’s loan balance stood at $30.3 billion (41.3 trillion won), an increase of 2.6 trillion from last year’s end. In particular, the balance of residential mortgage loans was $8.6 billion (11.8 trillion won) in the first quarter, up 29.7% from the end of last year. Additionally, the balance of monthly rent loans increased by about 200 billion won, rising to $9.08 billion (12.4 trillion won) over the same period.
According to KakaoBank, 50% of its residential mortgage loan originations last year were for refinancing purposes, which rose to 62% in the first quarter of this year. The refinancing share of rent deposit loans reached 45%.
“We also achieved a high market share in the main mortgage and all-rental loan switching services, which we launched in January last year, proving the platform’s competitiveness in the loan-to-rent market,” said a KakaoBank official.
