K Bank Q1 Net Profit 10.4 Billion KRW... 57.5% Decrease YoY

"Impact of Allowance Accrual"

K Bank announced on the 12th that it achieved a net profit of 10.4 billion KRW in the first quarter of this year. Although it recorded a profit for eight consecutive quarters, this figure represents a 57.5% decrease compared to the previous year.

K Bank explained that the net profit decreased compared to the first quarter of last year due to the provision for reserves. In the first quarter of this year, K Bank set aside 60.2 billion KRW in provisions, more than three times the 19.6 billion KRW set aside during the same period last year.

K Bank’s interest income was 102.9 billion KRW, an increase of 24.9% compared to the same period last year. Non-interest income was 8.1 billion KRW, more than four times the 1.9 billion KRW from the same period last year. The bank explained that the increase in profit size was due to achievements in various partnership areas such as gold investment services and the expansion of operating income.

As of the first quarter, deposits stood at 16.64 trillion KRW and loans at 11.94 trillion KRW, increasing by 44.2% and 52.9% respectively compared to last year. According to K Bank, it proactively launched a short-term savings product called the ‘Mobile Piggy Bank’ to increase deposit balances. Additionally, it strengthened product competitiveness by adding the ‘Receive Interest Immediately’ service to the Parking Account Plus Box. Regarding loans, K Bank increased loans in the first quarter of this year by launching fixed-rate jeonse loans and actively lowering interest rates. During this period, K Bank cut loan interest rates six times in total and, in March, became the first internet-only bank to launch fixed-rate jeonse loans at the lowest interest rates in the banking sector.

At the end of the first quarter, K Bank’s delinquency rate was 0.82%, slightly improved from 0.85% at the end of last year. Despite the growth in loans, the Bank for International Settlements (BIS) capital adequacy ratio at the end of the first quarter remained similar to the end of last year at 13.55%.

As of the first quarter, K Bank had 8.71 million customers, an increase of 1.21 million from 7.5 million last year. From the second quarter, K Bank plans to diversify its portfolio by expanding the proportion of secured loans in the loan sector and launching cost-competitive products such as group accounts in the deposit sector. Seo Hoseong, CEO of K Bank, said, “In the first quarter of this year, we focused on proactive soundness management. Now that our profit resilience has been strengthened, we plan to continue stable growth based on this and introduce more attractive products in the market.”