Q3 profits dips on thinning interest margins
Kakao Bank, South Korea's largest internet-only lender, reported record cumulative profit for the year through the third quarter, as a diversified revenue base offset narrowing margins in interest income.
Cumulative net profit through the January-September period rose 5.5 percent from a year ago to 375.1 billion won ($259.1 million), marking an all-time high for the period, according to the bank's earnings disclosure Wednesday.
Operating profit increased 2.6 percent to 504.3 billion won.
Net profit for the third quarter alone slipped by more than 10 percent on-year to 111.4 billion won, weighed down by tighter household lending regulations.
"Despite the falling interest revenue from loans, non-interest revenue has grown to support overall growth in operating revenue," an official from Kakao Bank said, adding the performance reflects efforts to diversify the lender's revenue pipeline and bolster customer engagement.
Total operating revenue for the three quarters rose by 5.9 percent to 2.33 trillion won. Interest income accounted for the majority at 1.49 trillion won, down 3.1 percent from a year earlier.
Non-interest income, derived from fee-based services, platform businesses and asset management, surged 26.7 percent to 835.2 billion won, lifting its share of total revenue by 6 percentage points to 36 percent.
Monthly active users reached an all-time high of 19.97 million as of September, the largest among all domestic lenders, both traditional and internet-only. The total number of customers also climbed to 26.24 million.
Kakao Bank's overseas ventures are also progressing steadily. Indonesia's Superbank, in which the lender invested alongside Grab, has attracted 5 million users, while a joint virtual bank with SCBX in Thailand is slated for launch next year.
The bank said it plans to further expand its portfolio by rolling out services for foreign nationals next year and introducing new products tailored for minors and senior users.
jwc@heraldcorp.com
