Yoon Ho-young, CEO of Kakao Bank, "Positive Review of Partnership with Cryptocurrency Exchanges"

Entering the Corporate Loan Market in Q4 This Year
Focusing on Mortgage Loans

Kakao Bank Records Highest Ever Operating Profit in Q1

[Asia Economy Reporter Sim Nayoung] Yoon Ho-young, CEO of KakaoBank, stated that the company is positively considering partnerships with cryptocurrency exchanges.

On the 3rd, during a conference call following the announcement of the first-quarter earnings, Yoon responded to a question about the stance on partnerships with cryptocurrency exchanges by saying, "Customers are investing in and managing virtual assets as one of their financial products," and added, "Since virtual assets are regarded as significant assets by customers, we are positively reviewing how to offer virtual assets as a service or business model."

Yoon also said, "Starting from the fourth quarter of this year, we are preparing to enter the corporate loan market by launching deposit and loan products for individual business owners," and added, "We will create a user interface (UI) that small business owners, who find it difficult to separately manage personal and business funds, can use intuitively."

He revealed a strategy to reduce unsecured loans while focusing more on jeonse and monthly rent deposit loans, mortgage loans, and loans for individual business owners. Yoon stated, "The most important thing in the loan business this year is portfolio restructuring." KakaoBank plans to expand the regions eligible for non-face-to-face mortgage loans, which were introduced in February, beyond the existing apartment areas in Seoul, Gyeonggi, and Incheon to other regions within the first half of this year.

In the first quarter of this year, KakaoBank recorded the highest quarterly operating profit in its history. The increase in interest income, along with growth in platform and fee businesses, contributed to improved profitability. On the other hand, KakaoPay turned to a loss compared to the first quarter of last year due to increased labor costs from salary raises and stock compensation expenses.

KakaoBank announced preliminary results for the first quarter of this year, with sales of 338.4 billion KRW and operating profit of 88.4 billion KRW, representing increases of 50.5% and 63.8%, respectively, compared to the same period last year. The operating profit is the highest ever recorded in a quarter. Net profit was 66.8 billion KRW, up 43.2% from the second quarter of last year, marking the second-highest level following 69.3 billion KRW in the second quarter of last year.

Deposit balances were recorded at 33.0414 trillion KRW, and loan balances at 25.9651 trillion KRW, increasing by 3.0153 trillion KRW and 103.7 billion KRW, respectively, compared to the end of last year. Although high-credit loans decreased, growth continued due to increases in mid- to low-credit loans and jeonse and monthly rent deposit loans. In the first quarter of this year, the loan balance for mid- to low-credit borrowers increased by 226.9 billion KRW from the end of last year to 2.6912 trillion KRW.

By segment, revenues from platform and fee businesses both increased steadily. Platform revenue was 25.3 billion KRW, up 38.5% year-on-year. Fee revenue was 47.7 billion KRW, increasing 18.8% over the same period.

The number of customers is also steadily increasing. As of the first quarter, the customer base reached 18.61 million, an increase of 620,000 from the end of last year. Notably, 70% of new customers in the first quarter were aged 40 and above (40s 28%, 50s 27%, 60 and above 14%). As a result, the proportion of customers aged 40 and above reached 41% of the total customer base. The monthly active users (MAU) of the mobile application stood at 15.03 million, representing about 80% of the total customers.