Digital lender eyes M&A in payments and capital markets
Kakao Bank posted a record profit in 2025 as fee income and platform-based businesses lifted noninterest income above the 1 trillion won ($690 million) mark for the first time. With earnings on a firmer footing, the lender said it plans to pursue acquisitions to drive growth beyond traditional banking.
South Korea’s largest online lender said Wednesday net profit rose 9.1 percent on-year to 480.3 billion won in 2025, while operating profit increased 7 percent to 649.4 billion won.
Growth was fueled by a sharp expansion in noninterest income, generated from fee-based services, platform businesses and investment assets. Kakao Bank said non-interest income jumped more than 22 percent from a year earlier to 1.09 trillion won, marking its first breach of the trillion-won threshold.
The gain lifted total operating revenue to 3.09 trillion won, up about 5 percent on-year. Interest income edged down slightly to 2.95 trillion won as loan growth slowed amid tighter policy measures, pushing noninterest income to 35 percent of the total share.
Cementing its market lead, Kakao Bank added 1.8 million users, taking its customer base to 26.7 million, while monthly active users climbed to about 20 million.
Chief Financial Officer Kwon Tae-hoon said noninterest revenue will remain the main growth driver this year.
“We will pursue growth built on our core deposit competitiveness, leveraging strong user engagement to strengthen our platform influence and monetization base,” he said.
The digital lender plans to roll out new services, including an investment tab in the second quarter that will allow users to search and compare products ranging from virtual assets to equities. A foreign exchange account service is also set to launch in the same period, followed by offerings tailored to foreign customers and other new user segments later in the year.
Kwon said Kakao Bank is stepping up “inorganic growth” efforts, with payments and capital companies emerging as priority M&A targets. Acquiring a capital company would allow the lender to enter markets previously out of reach for internet-only banks, he added.
Overseas expansion is another pillar. On Tuesday, Kakao Bank reported a 99.3 billion won valuation gain from its equity stake in Indonesia’s SuperBank, which turned profitable within a year of launch and was recently listed. “Building on this success, we plan to further expand overseas financial performance,” Kwon said.
Kakao Bank is currently setting up a digital bank in Thailand with Thai financial group SCBX, targeting a launch in the second half of the year.
jwc@heraldcorp.com
