Kakao Bank, Kakao Games report mixed Q2 earnings

Kakao Bank Corp.’s office building. [Courtesy of Kakao Bank]

South Korea’s internet-only Kakao Bank Corp. and game publisher Kakao Games Corp., both under the tech giant Kakao Corp., announced mixed earnings on Wednesday.

Kakao Bank announced Wednesday that it posted a net profit of 183.8 billion won ($142.4 million) in the first half of this year, up 48.5 percent from the same period last year.

Operating profit amounted to 248.2 billion won during the cited period, up 52.5 percent.

Both net income and operating profit were record highs for the semi-half period.

For the second quarter, Kakao Bank posted a net profit of 82 billion won, up 43.8 percent from the same period a year ago. Operating profit also jumped 50.3 percent to 111.8 billion won.

Deposits increased to 43.6 trillion won as of the end of June, up from 40.2 trillion won at the end of March. Its loan balance reached 33.9 trillion won, up 4.6 trillion won from 29.3 trillion won.

The online bank said it saw an increase in all loan balances, including credits and mortgages, compared with the previous year.

Mortgage balance in the second quarter increased by around 3 trillion won to 5.5 trillion won.

New loans stood at 3.5 trillion won, of which 60 percent was generated from loan repayment.

Loan balances for low- to medium-credit borrowers showed an increase of 400 billion won on quarter to 3.9 trillion won.

The net interest margin (NIM) was 2.26 percent, down 0.03 percentage point from the previous year‘s 2.29 percent and 0.36 percentage point from 2.62 percent in the first quarter.

The bank experienced an improvement in financial stability despite the increased loans.

The delinquency rate at the end of the second quarter declined by 0.06 percentage point, reaching 0.52 percent compared to the first quarter.

The bank reported provisions of 59.1 billion won in the second quarter, following 52.6 billion won in the first quarter.

“Kakao Bank proved its potential for further growth with its strategic services aimed at attracting a broader group of customers, and advanced credit evaluation models, despite the decline in NIM and rising provisions,” the company said.

Kosdaq-listed Kakao Games, on the other hand, announced its operating profit in the second quarter fell by 67.3 percent on year to 26.5 billion won.

The figure also was 22.4 percent lower than the market consensus of 34.1 billion won.

Sales in the second quarter reached 271.1 billion won, down 19.98 percent from last year. Net profit plunged 86.45 percent to 8.7 billion won.