K bank posts W60.1b net profit in H1, down 29% on year

Internet-only lender K bank posted a net profit of 60.1 billion won ($41.4 million) in the first half of this year.

According to a regulatory disclosure filed Friday, the bank's net profit for the January-to-June period fell 28.7 percent from 84.2 billion won in the same period last year.

Second-quarter net profit came in at 26.87 billion won, down 60.6 percent from 68.19 billion won a year earlier.

Interest income for the first half rose 20 percent year on year to 253 billion won, up from 211.6 billion won in the first half of last year. The bank attributed the improvement to growth in loans to self-employed borrowers.

The net interest margin also rose, climbing to 1.59 percent in the first half of this year from 1.38 percent in the same period last year.

Non-interest income, however, fell 68 percent to 23.3 billion won from 73.3 billion won a year earlier, reflecting a sharp decline in gains from bond sales.

"While the contraction in bond-sale gains was the primary factor, fee income edged up slightly from a year earlier, driven by improvements in debit card revenue, linked-loan income and affiliated credit card fees," the bank said.

The delinquency rate stood at 0.60 percent, up slightly from 0.59 percent in the second quarter of last year. The substandard-and-below loan ratio rose to 0.59 percent from 0.51 percent in the year-earlier quarter.

The delinquency rate for self-employed borrowers, however, fell to 0.51 percent at the end of the second quarter from 0.93 percent at the end of the second quarter of last year. K bank said its Bank for International Settlements (BIS) capital adequacy ratio stood at 20.02 percent at the end of the second quarter, maintaining a high level of capital soundness.

Total deposits at the end of the second quarter stood at 26.6 trillion won, while the loan balance reached 19.8 trillion won — up 13.8 percent from the second quarter of last year.

In the second half, K bank plans to focus on expanding its self-employed lending business and strengthening capabilities in digital assets to build further growth momentum.

On the lending side, the bank is preparing to broaden the scope of its real estate-backed loans for self-employed customers. It plans to expand eligible collateral beyond apartments to include row houses, multi-family homes, officetels and commercial properties, and to extend loan purposes to cover facility funding in addition to working capital.

Alongside this, the bank has launched a project to build a credit system for small and medium-sized corporations, with the goal of introducing a non-face-to-face loan service targeting that segment next year. The initiative is intended to lay the groundwork for expanding into the SME market.

K bank was also active in the stablecoin space during the second quarter, as discussions in the sector have been gaining pace. The bank signed an MOU with blockchain firm Ripple, joined the Pangea Project — a joint initiative by EU banks — launched a proof-of-concept for an off-ramp solution with Lambda256 and KSNET, and signed a further MOU with Hong Kong's HashKey Group.

Going forward, the bank plans to refine service application models based on the results of ongoing proof-of-concept work with each partner and gradually expand its footprint in global markets.