Kbank achieved earnings growth in the third quarter by expanding its loan assets, centered on loans to individual business owners. While interest income and the net interest margin (NIM) both improved, asset quality indicators such as the delinquency rate deteriorated slightly. The cumulative decline was limited to 1.3%, exceeding consensus estimates.
Kbank said Friday that its consolidated net profit for the third quarter reached 42.1 billion won, a 119.2% increase from the same period last year.
Interest income in the third quarter was 130.1 billion won, up 21% year-on-year. This was driven by an expansion of loan assets led by loans to individual business owners.
As of the end of the third quarter, the outstanding loan balance reached 20.58 trillion won, surpassing the 20th trillion won mark for the first time, while the share of corporate loans in total loans increased to 17.7%. More than half of the increase in the outstanding loan balance since the beginning of this year was attributable to corporate loans.
The net interest margin (NIM), a key profitability indicator, rose from 1.38% in the same period last year to 1.60%.
Non-interest income, which had shown weak performance in the second quarter, also improved. Non-interest income reached 26.9 billion won, a 28.3% increase from the same period last year, thanks to gains from the sale of loan receivables and increased revenue related to securities.
Cumulatively, net profit was 102.1 billion won, down 1.3% from the same period last year. Although non-interest income was hit by a decrease in profits related to bond sales compared to last year, strong third-quarter results helped defend overall performance. As a result, the figure exceeded the market consensus estimate of 92.1 billion won.
Asset quality indicators took a step back. The delinquency rate rose slightly from 0.60% in the previous quarter to 0.62%, and the non-performing loan (NPL) ratio increased marginally from 0.59% to 0.60%. The credit cost ratio for the third quarter was 1.12%, up 0.4 percentage points from the previous quarter.
Kbank plans to accelerate its individual business owner loans within the year. This month, Kbank expanded the collateral scope of its "Boss Real Estate Secured Loan" from existing apartments to include multi-unit housing and commercial real estate, and broadened the use of loan funds from working capital to facility capital.
Additionally, the company is scheduled to launch various partnership products within the year, including the "Naver Pay Boss Loan" through collaboration with Naver Pay, and the "Musinsa Money Kbank Account/Check Card" through collaboration with Musinsa.
A Kbank official said, "Despite a highly volatile external environment, we demonstrated strong growth of 119% year-on-year, based on the steady upward trend in loans to individual business owners." The official added, "Going forward, we will continue to secure new growth drivers by expanding our customer base through the expansion of the corporate finance market and collaborations with external platforms."
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