Kbank sees record income Q3 like other Korean banks amid rising interest margin

Seo Jeong-won and Jenny Lee 2022. 11. 8. 14:06
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[Provided by Maekyung Media Group]

South Korea’s first app-based lender Kbank has kept up record earnings streak in the third quarter as it joins other lenders in margin boon from faster rises in lending rates than deposit rates during tightening environment.

According to the bank on Monday, it recorded 25.6 billion won ($18.45 million) in preliminary net income for the third quarter. The figure was up 52.4 percent from a year ago and 20.2 percent from the previous quarter. The cumulative net income for the first nine months of the year amounted to 71.4 billion won, more than eight times larger than last year’s annual income of 8.4 billion won.

It added 180,000 customers in the July-September period to 8.01 million.

The outstanding deposit balance surged 1.31 trillion won to 13.49 trillion won, while the loan balance increased 1.05 trillion won to 8.73 billion won.

The bank responded fast to offer faster rises in saving rates in line with the increase in the base rate and increased loans to lower-credit borrowers.

Its share of loans extended to borrowers with low-to-mid credit ratings accounted for 24.7 percent, up 8.1 percent from a year ago.

At the same time, it has enhanced efficiency with the cost-to-income ratio easing 1.1 percentage points to 37.9 percent from the previous quarter. The ratio, reflecting the cost of running operations as to the bank’s operation income, is watched to determine the profitability of banks. Its net interest margin in the third quarter was 2.44 percent and delinquency rate at 0.67 percent. Its BIS capital ratio came to 14.51 percent.

Kbank with 34 percent ownership of BC Card under KT has decided to push back initial public offering to January next year, in fear of the impact from poor stock performance of its online rival KakaoBank.

By Seo Jeong-won and Jenny Lee

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