Internet-only K-Bank reaps record profits

K-Bank, a South Korean internet-only bank, posted record-high profits last year, extending gains after it swung to black for the first time in 2021.

The bank recorded a net profit of 83.6 billion won ($63.7 million) in 2022, marking a 272 percent increase from the previous year's net profit of 22.5 billion won, according to K-Bank on Thursday.

K-Bank’s net profit in 2021 was a turnaround from a loss of 105.4 billion won in 2020. It was the first annual net profit that the internet-only bank posted since the lender launched in 2017.

Similar to top commercial banks here, K-Bank's expanded profits last year was largely due to high interest rates.

A total of 385.2 billion won in profit came from interest income, while around 3 billion won was noninterest profits.

The number of K-Bank customers also grew to 8.49 million as of end-December last year, up about 1.32 million from the previous year, the lender said.

Deposits at the bank totaled 14.63 trillion won at the end of last year, up 29.2 percent from a year earlier. Outstanding loans also jumped 51.9 percent to 10.77 trillion won over this period.

Despite seeing profits during the last two years, K-Bank recently decided to shelve plans for an initial public offering this year. It cited a fall in corporate value as investor sentiment worsened amid the global economic downturn.

"We plan to continue preparing for the IPO while taking into account both domestic and foreign market conditions," K-Bank said in a statement when announcing its IPO withdrawal last month.

The lender passed the preliminary evaluation for the IPO launch at the Korea Exchange, the country's bourse operator, in September last year. If it opts for another listing in the future, it will have to go through the screening process again as the Korea Exchange mandates firms to submit the listing application within six months after passing the review.

Separately, K-Bank last week also laid out plans to focus on bolstering its mobile service and said it would ditch the web-based service.

Banking services through K-Bank’s website will only be available until March 28.

The decision was largely due to the poor performance of its web-based service. According to website traffic analyzer Similarweb, the total number of internet users who visited K-Bank’s website in January was only 340,000, much lower than those at top commercial banks like KB Kookmin (6 million) and Shinhan Bank (3.76 million).