Up 96.3% Year-on-Year
Individual Business Owner Loans Drive Growth
K Bank announced on August 13 that it recorded a net profit of 84.2 billion KRW in the first half of this year. The net profit for the second quarter was 68.2 billion KRW, representing a 96.3% increase compared to the same period last year (34.7 billion KRW).
A notable aspect of these results is the increase in non-interest income. In the second quarter, K Bank's net interest income was 103.3 billion KRW, a 19.7% decrease compared to the same period last year (128.6 billion KRW). K Bank explained that this was due to an increase in interest expenses resulting from a base rate cut and a higher fee rate for virtual asset deposits, despite growth in loan assets. In contrast, non-interest income rose to 19.7 billion KRW, a 16.2% increase from the same period last year (16.9 billion KRW), driven by higher bond investment returns and expanded platform advertising revenue.
The bank also strengthened its asset quality management. Second-quarter credit loss expenses fell by 26.5% year-on-year to 41.3 billion KRW. This was attributed to an improved portfolio with a higher proportion of secured loans and enhanced credit screening through the advancement of credit evaluation models. The delinquency rate improved to 0.59%, down from 0.66% at the end of the first quarter. The ratio of substandard and below loans also decreased for the fifth consecutive quarter, reaching 0.51%. The BIS capital adequacy ratio stood at 15%, and the net interest margin (NIM) was 1.36%.
The number of customers reached 14.13 million as of the first half of the year and has now surpassed 14.5 million. In the first half alone, 1.4 million new customers joined K Bank. Notably, the launch of the youth-exclusive financial service 'Alpaca Card' in May led to an increase in new teenage customers. Deposit balances rose by 22.5% year-on-year to 26.8 trillion KRW, while loan balances increased by 10.8% to 17.4 trillion KRW compared to the same period last year. Despite a focus on managing household loans, loans to individual business owners grew by about 270 billion KRW in the second quarter alone, accounting for over 60% of the total loan balance increase and driving overall growth. In particular, the 'Business Owner Real Estate Secured Loan' launched last year had a balance of approximately 300 billion KRW as of the end of June this year.
In the second quarter, the proportion of new mid- to low-credit loans at K Bank was 38.2%, an increase of 11.9 percentage points from the previous quarter. The average balance ratio of mid- to low-credit loans was 34.4%, exceeding the regulatory threshold of 30%.
K Bank plans to expand loans to individual business owners and commercialize stablecoin-related businesses in the second half of the year. For real estate secured loans for individual business owners, the bank intends to diversify collateral types, and for guaranteed loans, it plans to expand coverage by cooperating with regional credit guarantee foundations. Since April, K Bank has been conducting a proof of concept (PoC) for Japan-Korea overseas remittance using stablecoins, and completed a related trademark application in July. Recently, the bank also established a dedicated in-house organization called the 'Digital Asset Task Force.'
A K Bank representative said, "We achieved record quarterly results thanks to customer growth, the expansion of individual business owner loans such as the 'Business Owner Real Estate Secured Loan,' and thorough asset quality management. We will continue to strengthen product competitiveness and refine credit management to ensure stable growth and enhanced profitability going forward."
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