K Bank Reports Net Profit of 12.9 Billion KRW Last Year... 85% Decrease YoY

"Impact of 292.7 Billion KRW Provision Accumulation"

K Bank announced on the 29th that it recorded a net profit of 12.8 billion KRW last year. This represents an approximately 85% decrease compared to the previous year (83.569 billion KRW). K Bank explained that this performance was due to setting aside a record-high provision of 292.7 billion KRW. However, key indicators such as customer and loan/deposit balances, as well as profit before provisions, continued to grow.

To proactively prepare for economic fluctuations in 2023, K Bank set aside a record-high provision of 292.7 billion KRW, an increase of 156.6 billion KRW from 136.1 billion KRW in 2022. Despite increases in both interest income and non-interest income, net profit last year decreased by 70.8 billion KRW compared to 2022. Nevertheless, profit excluding provisions (profit before provisions) was 313.4 billion KRW, up 81.6 billion KRW (35.2%) from 231.8 billion KRW in 2022.

Due to active provisioning, the NPL coverage ratio, an indicator of the ability to respond to economic downturns, rose significantly from 185.0% at the end of 2022 to 250.1% at the end of last year. This is the highest among internet banks and even higher than the average of the four major banks (245.7%). The cost-to-income ratio (CIR), an indicator of cost efficiency, improved further to 30.9% from 37.5% in 2022.

The net interest margin (NIM) was 2.35%, and the delinquency rate was 0.96%. The Bank for International Settlements (BIS) total capital ratio stood at 13.2%.

Deposit balances reached 19.07 trillion KRW, and loan balances were 13.84 trillion KRW, increasing by 4.46 trillion KRW (30.6%) and 3.06 trillion KRW (28.4%) respectively compared to the previous year. Deposits continued to grow through the launch of new products with competitive interest rates and enhanced benefits. Loans accelerated portfolio transformation by introducing various collateral and guarantee products.

Last year, interest income recorded 450.4 billion KRW, an increase of 65.2 billion KRW from 385.2 billion KRW the previous year. Non-interest income was 33.8 billion KRW, more than five times the 6.5 billion KRW recorded in 2022.

K Bank also actively engaged in win-win finance. Over three occasions last year, it lowered interest rates on mid-to-low credit loans, supplying 1.32 trillion KRW in mid-to-low credit loans annually. The proportion of mid-to-low credit loans increased by 4 percentage points to 29.1% compared to 25.1% at the end of 2022.

K Bank stated, “Since the beginning of this year, the daily average of new customers has increased more than threefold compared to 2022, and the asset portfolio has strengthened its profit resilience with a higher proportion of safe assets. As of February this year, net profit has already significantly exceeded last year’s annual net profit.”

External growth continued steadily. At the end of last year, the number of subscribers reached 9.53 million, an increase of 1.33 million compared to the end of 2022.

K Bank plans to continue its growth this year by focusing on key goals such as becoming a part of daily life, an innovative investment hub, and a tech-leading bank.

Choi Woo-hyung, President of K Bank, said, “With various customer benefits and interest rate advantages, the daily average increase in new customers this year has already reached 50% of the total customer growth in 2022. Based on this foundation, K Bank will grow even faster this year to become a part of daily life and the No.1 internet bank.”