Korean virtual banks succumb to net losses for two straight years

K Bank and Kakao Bank saw a combined net loss of $78m in 2018.

Two years since they kicked off, the two incumbent internet-only banks in Korea have yet to win over deficits, reports The Korea Times.

According to data from the Korea Federation of Banks (KFB), K Bank posted a net loss of $70.5m (KRW80b) whilst Kakao Bank’s net loss reached $18.48m (KRW20.95b) in 2018. In 2017, K Bank and Kakao Bank posted net losses of $74m (KRW84b) and $92m (KRW104.49b), respectively.

Also read: Can South Korea's web-only banks break out of beginner's rut to ensure sustainability?

"It took internet banks in Japan five years to switch to a surplus. K bank is growing and figures are improving," a spokesperson of K bank said.

Incumbents may be bound for an even tighter competition, with the upcoming launch of more virtual banks this year, including that of the consortium between Shinhan Financial Group and fintech player Viva Republica, as well as that of Kiwoon Securities, which have both applied for licences to operate new virtual banks in the country.