IBK achieves 2 trillion won milestone in bottom line, Kakao Pay reports wider loss

[Photo provided by Industrial Bank of Korea]

Industrial Bank of Korea (IBK) achieved a milestone net profit of 2 trillion won ($1.7 billion) last year on increased Covid-19 relief loans for small businesses at the state-invested bank, while Kakao Pay Corp. delivered widened loss in the first year it went public, disappointing investors on top of stock options scandal.

IBK announced on Tuesday that its operating profit on a consolidated basis slipped 0.3 percent on quarter but surged 52 percent on year to 813.2 billion won in the fourth quarter. Net income fell 2.1 percent on quarter and gained 56.7 percent on year to 599.5 billion won during the same period.

For the full year, IBK posted an operating profit of 3.2 trillion won, up 52 percent from the previous year. Net profit rose 56.7 percent on year to 2.4 trillion won.

[Photo provided by Kakao Pay]

Loans to small and medium-sized enterprises increased due to Covid-19. The outstanding balance of SME loans rose 1.2 percent on quarter and 9.2 percent on year to 203.9 trillion won, the first time that SME loan balance topped 200 trillion won in the Korean financial industry.

Interest income gained 8 percent on year to 5.6 trillion won on the back of increased interest-earning assets and improved net interest margin (NIM) in the fourth quarter. IBK’s NIM was 1.55 percent, up 0.06 percent on quarter and 0.09 percent on year.

On the same day, Kakao Pay, the fintech unit under Kakao family, reported operating loss of 27.2 billion won last year, widened from a loss of 17.9 billion won in the previous year. According to Kakao Pay, its income balance exacerbated due to increased spending to cover its initial public offering and loss of customer trust due to the subsequent massive selloffs by senior executives. Revenue surged 61 percent on year to 458.6 billion won.

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