K Bank, South Korea’s first app-based bank, has reported its first profit since the four years of its inception. After reporting a net loss of 12.3 billion won in the previous quarter, the internet-only bank bounced right back, raising 3.9 billion won in net profit in the April-June quarter.
Customers help in creating milestone
The bank stated that it attributes its success to the steep increase in the number of customers and a concurrent rise in deposits. “This helped the bank borrow at a lower cost,” the company added.
The number of costumes touched 6.19 million during the January to June period and stood at 6.28 million as of July. With the increase in customers, the bank had a whopping 11.29 trillion won in deposit accounts, and its outstanding loans were at 5.09 trillion won, which is up by 2.1 trillion won last year. K bank’s partnership with the country’s largest cryptocurrency exchange, Upbit, was one of the contributors to the increase in the bank’s deposits.
Tough days initially
In the first six months of 2021, the bank recorded a cumulative loss of 8.4 billion won, as opposed to the 44.9 billion won for the same period last year. K bank made 70.9 billion won in net interest profit in the first six months, up from 18.7 billion won at the same time the previous year.
K Bank’s chief executive, Suh Ho-sung, reportedly said that the bank’s delinquency ratio fell to 0.37& as of the end of June due to the growth in loans and risk management. As per reports, Suh Ho-sung further added, “Based on its steep external growth, K bank achieved diversification of its profit portfolio that encompasses interest and noninterest sectors and showed significant improvements in fundamentals, finally achieving its first-quarter surplus since its launch.”
K Bank CEO Suh Ho-sung on future plans
Suh continued that the company’s future course of action would be a series of collaborations with KT Group and BC Card. Furthermore, he iterated that the bank will continue to expand loans for medium-sized credit holders through a renewed scoring system in the second half of the year.
On the other hand, K bank’s rival, Kakao Bank, is planning to go public about the most anticipated IPOs this year despite the controversy regarding its high valuation. Despite having over 16 million registered users as of June end with Kakao Bank, K bank has emerged victorious in beating its contemporaries.