Mirae Asset Securities logo

Poised to deliver differentiated growth

2Q23 preview

For 2Q23, we estimate KakaoBank’s net profit at W78.7bn--2% above the consensus. Despite a continued decline in net interest margin (NIM), we believe net interest income was solid thanks to loan growth across all segments, especially mortgage loans. Though efforts to diversify are ongoing, non-interest income remains insignificant compared to interest income. We look for credit costs of W56.6bn in 2Q23, assuming additional provisioning similar to the 1Q23 level.

Growth momentum remains intact

KakaoBank is poised to deliver differentiated growth in an industry that lacks positive catalysts; we forecast net profit to grow 26% in 2023 and 17% in 2024. In contrast, large financial holding companies are struggling to deliver meaningful profit growth. Expectations on KakaoBank’s new services (advertising, payments, investment products, etc.), acquisition of a credit card business license, and overseas expansion remain intact. While it will take some time to see progress in non-interest income, we believe interest-generating businesses will sustain the company’s growth momentum in the meantime.