Toss Bank Surpasses 10 Trillion KRW in Loan Balance for the First Half of the Year... Profit Expected in 3Q

2Q Net Loss of 10.4 Billion Won... One-Third of Previous Quarter
Monthly Surplus in July... Quarterly Surplus Expected in 3Q
Delinquency Rate a Concern... Highest Among Internet Banks at 1.56%
"Capital Soundness Already Secured... Will Improve with More Loan Products"

Toss Bank surpassed a loan balance of 10 trillion won as of the end of the first half of this year. The net loss in the second quarter also decreased to about one-third compared to the previous quarter. The loan-to-deposit ratio is rising, and last month, the bank recorded a monthly profit for the first time. There is a forecast that the bank could achieve its first quarterly profit in the third quarter.

Toss Bank announced on the 31st that it recorded a net loss of 10.4 billion won in the second quarter of this year. Compared to the net loss of 28 billion won in the previous quarter, this is about one-third of that amount. The net loss for the first half of the year was 38.4 billion won, reducing the deficit by about 70% compared to the same period last year.

The loan balance exceeded 10 trillion won, reaching 10.0458 trillion won, surpassing 10 trillion won in just 1 year and 9 months since its launch. This represents a 134% increase compared to the same period last year. Thanks to loan growth, the cumulative net interest income as of the end of the second quarter was 243.8 billion won, more than nine times the 26 billion won recorded in the first half of last year. However, the deposit balance decreased by 24.4% compared to the same period last year, standing at 21.5332 trillion won.

The loan-to-deposit ratio exceeded 50% for the first time since its launch, reaching 50.43% as of the second quarter. Toss Bank explained that with the launch of monthly rent loans next month and plans to introduce joint loans with regional banks in the second half of the year, the loan product lineup will be strengthened, further improving the loan balance and loan-to-deposit ratio.

The number of customers is steadily increasing. As of the end of the first half, there were 6.9 million customers, an increase of about 830,000 compared to 6.07 million in the first quarter. Last month, the number already surpassed 7 million, reaching 7.55 million as of this month. Despite being in its third year since launch, the growth rate is steep.

Non-interest income also increased through Toss Bank's check cards and asset management service "Mokdong Gulligi." As of the end of the first half, it reached 27.7 billion won, four times the 7 billion won recorded in the same period last year.

Meanwhile, the allowance for loan losses was 288.2 billion won, and the coverage ratio of allowance for loan losses to non-performing loans was 228%. The coverage ratio against total loans (the ratio of allowance for loan losses to total loan balance) was 2.86%, more than five times higher than the average of 0.49% for the four major commercial banks?Shinhan, KB Kookmin, Hana, and Woori. The liquidity coverage ratio (LCR) was also 705.15%, more than 3.5 times higher than the banking sector average of around 200%.

The Bank for International Settlements (BIS) capital adequacy ratio was 11.69%. It exceeded the Basel I supervisory standard of 8%, and even when applying the Basel III standards to be implemented next year, it is considered stable at around 14.25%. Toss Bank stated that if the planned capital increase in the second half of the year is successfully completed, capital adequacy will be further strengthened.

However, the delinquency rate was somewhat high at 1.56%, up 1.04 percentage points compared to the same period last year. This is significantly higher than the average delinquency rate of 0.24% for the four major commercial banks in the second quarter. The increase in delinquency rates also exceeded those of other internet banks during the same period, such as Kakao Bank (0.33% → 0.52%) and K Bank (0.52% → 0.86%).

Toss Bank explained, "The relatively high delinquency rate occurred partly because we began full-scale write-offs of non-performing loans in the second quarter to ensure the integrity of delinquency data as a bank." They added, "The delinquency rate is at a manageable level predicted by the bank according to the proportion of low- to medium-credit customers, and we maintain the highest level of allowance for loan losses in the banking sector, fully prepared for all situations." Furthermore, they said, "Since loan products with relatively low default rates, such as monthly rent loans, will be launched soon, the delinquency rate is expected to gradually stabilize and decline starting from this quarter."