Deposits Already Surpass K-Bank
Improving Business Performance Through Loan Expansion Is the Challenge
[Asia Economy Reporter Minwoo Lee] Toss Bank surpassed 17 trillion won in deposits just five months after its launch. This overtook K Bank, the first internet-only bank that has been operating for five years. However, since the loan scale is still insufficient and a deficit of around 80 billion won was recorded, further solid growth is identified as a challenge.
According to the financial industry and Toss Bank's disclosure on the 3rd, Toss Bank recorded a net interest loss of 11.2 billion won last year. It achieved a deposit balance of 13.79 trillion won over two months, spending 42.4 billion won on interest expenses. Interest income from loans was recorded at 31.2 billion won. The accumulated net loss reached 80.6 billion won. It appears that initial investment costs, mainly salaries paid to employees and ATM fees amounting to 54 billion won over the past year, influenced this result.
Considering that other internet banks also recorded losses in their first year, the reaction is that this is not a major problem. K Bank, which launched in April 2017, recorded a net loss of about 83.7 billion won that year. Kakao Bank, which opened in July of the same year, also showed a net loss of 104.5 billion won. Subsequently, they turned profitable after four and two years, respectively.
In particular, it is noteworthy that the deposit attraction scale has already surpassed that of K Bank, the first internet bank. As surplus funds from securities firms’ entrusted accounts and salary accounts previously held at commercial banks were transferred, Toss Bank’s deposits reached 17 trillion won. Although it still falls short of Kakao Bank (32.5 trillion won), it exceeded K Bank (11.69 trillion won) by more than 5 trillion won.
However, the loan scale is still insufficient. At 2.5 trillion won, it is far behind Kakao Bank (25.9 trillion won) and K Bank (7.49 trillion won). This is believed to be due to the total household loan volume regulation by financial authorities, which caused loans to be suspended immediately after launch and only resumed this year.
In fact, since resuming loans this year, it has shown rapid growth. As of the 18th of last month, the loan balance was about 2.5 trillion won, nearly five times higher than at the end of the previous year. Especially, by entering loans for low- to mid-credit borrowers and individual business owners, the net interest margin (NIM) is rapidly increasing.
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