KakaoBank hopes to advance into Southeast Asia this year: CEO

Yoon Ho-young, chief executive officer of KakaoBank Corp., explains “Favorite Savings” at a press conference in Seoul on April 18. [Photo provided by KakaoBank]

South Korean digital bank KakaoBank Corp. on Tuesday shared plans to expand its presence overseas.

“We are in talks with two countries in Southeast Asia (for overseas entry),” said Yoon Ho-young, chief executive officer of KakaoBank. “We expect to make tangible progress with one of them by the end of this year.”

Industry sources note that Indonesia is one of the strong candidates for KakaoBank’s entry.

The CEO also played down the concerns surrounding the capital soundness of the company, saying that “the delinquency rate of a bank is bound to rise with a growing number of borrowers with lower credit.”

“We will set aside enough reserves as an allowance for bad debts to deal with potential loan growth for such low-credit borrowers,” Yoon said.

Yoon’s remarks were made as KakaoBank announced the release of a new type of fandom-based installment savings product called “Favorite Savings,” which allows K-pop fans to make deposits while recording meaningful moments of their favorite stars and artists.

A Favorite Savings account targets fans to save deposits whenever they see their favorite groups do specific actions like going on a broadcast stage or posting on social media. The account also allows depositors to add pictures of their favorite stars to the bank covers, just as they change their profile photos on the messaging platform KakaoTalk.

“We are thinking of forging ties with entertainment companies to allow depositors to add new album covers of their favorites to the bank covers,” said Kim Young-rim, an official from KakaoBank.