KakaoBank (323410) Q4 2024 earnings summary

Executive summary

• Customer base reached 24.88 million by end-2024, up 2.04 million year-over-year, driving deposit and revenue growth across all age groups.

• Operating profit grew 27% year-over-year to KRW 606.9 billion, with platform revenue up 31% to KRW 94.2 billion, driven by loan comparison and advertising.

• Total operating revenue for FY2023 was 2,945.6 billion KRW, with continued growth into 1Q24 at 746.3 billion KRW.

• Net profit for FY2023 was 440.1 billion KRW, a significant increase from 147.9 billion KRW in FY2022.

• High growth in platform and fee businesses, with platform revenue up 65.6% and loan comparison execution value up 521% year-over-year.

Financial highlights

• Q4 operating revenue was flat quarter-on-quarter, as loan comparison and ad revenue offset a decline in fee revenue.

• Deposit balance reached KRW 55 trillion in 1Q24, up 17% year-over-year and 1% quarter-on-quarter; low-cost deposits now 60.6% of total.

• Loan balance reached KRW 43.2 trillion in 1Q24, up 12% year-over-year and 1% quarter-on-quarter, led by SOHO and unsecured loans.

• Loan comparison service revenue grew 37% quarter-on-quarter, exceeding KRW 10 billion; ad revenue rose nearly 40% quarter-on-quarter.

• Net profit for 4Q24 was W84.5bn, up 11.6% year-over-year but down 32% sequentially.

Outlook and guidance

• Loan growth for 2025 to be maintained at a similar pace to 2024, focusing on less regulated segments like SOHO loans.

• Non-interest income target to grow from 30% to 40% of total income.

• NIM expected to decline in 2025 due to lower lending rates and higher low-cost deposit growth, but targeted to defend around 2%.

• Platform revenue expected to see double-digit growth, led by loan comparison and advertising.

• New service pipeline includes mortgage loan comparison, investment box, SOHO secured loan, VAT box, mobile identification, PLCC credit card, and AI financial calculator, with launches planned throughout 2025.