[비즈한국] Kakao Group's financial subsidiaries, KakaoBank and KakaoPay, both reported strong performances in the first quarter of this year. KakaoBank achieved record results thanks to investment gains from Indonesia's Superbank, while KakaoPay thrived due to the success of its subsidiaries in securities and insurance. However, both companies find it hard to be fully optimistic. KakaoBank faces challenges such as slowing growth and the need to expand its non-banking sectors, while KakaoPay is burdened by judicial risks and labor-management conflicts.
KakaoBank's net profit for the first quarter of 2026 was 187.3 billion KRW, a 36.3% increase compared to the same period last year (137.4 billion KRW). KakaoBank explained, "We achieved a record-high net profit driven by growth in interest and fee income based on a strengthened customer base." KakaoBank's interest income for the first quarter was 373.4 billion KRW, and fee income was 9.9 billion KRW, marking an increase of 15.5% and 47.8%, respectively, compared to the same period last year (323.4 billion KRW and 6.7 billion KRW).
However, looking at operating profit, the figures actually regressed. The operating profit for the first quarter was 157.6 billion KRW, a 13.9% decrease from the same period last year (183 billion KRW). Although it increased compared to the fourth quarter of 2025 (145.1 billion KRW), it failed to recover to the previous year's levels. The surge in net profit occurred because the Indonesian digital bank 'Superbank,' in which KakaoBank holds an 8.7% stake, went public (IPO) last December, resulting in 93.3 billion KRW in non-operating income. KakaoBank cited increased valuation losses in financial asset management, due to the decline in profit-seeking security gains from rising market interest rates, as the reason for the decrease in operating profit.
The company succeeded in maintaining growth in the number of users. KakaoBank's customers grew from 23.6 million in the first quarter of 2024 to 25.5 million in the first quarter of 2025, and from 26.7 million in the fourth quarter to 27.27 million in the first quarter of this year. KakaoBank attributed this customer increase to its 'Our Kids Service,' which allows legal guardians (parents) to sign up for products on behalf of their minor children, and the launch of AI services. KakaoBank stated, "Among the 570,000 new customers in the first quarter, 24% were 'Our Kids Service' users," adding, "Since the launch of KakaoBank AI in December 2025, AI-related MAU has increased tenfold compared to November 2025, before the launch."
Following the earnings announcement, the market evaluated that KakaoBank's growth momentum had slowed. Jung Joon-seop, an analyst at NH Investment & Securities, analyzed, "Due to household loan regulations, overall loan growth and fee/platform income have stagnated. Given external conditions such as regulations and AI investments, it is unlikely that the core business will see significant external growth in the future."
In response, KakaoBank has set out to expand its non-banking sectors and new businesses. Following overseas investments in Indonesia, Thailand, and Mongolia, it has set a goal to acquire a capital firm within the year. During the Q1 conference call Q&A, Kwon Tae-hoon, CFO of KakaoBank, explained, "We are reviewing the acquisition of a capital firm to strengthen corporate finance and enter the non-banking credit market. Capital firms can improve profitability by lowering funding costs through credit rating improvements, and they generally have a higher Return on Equity (ROE) than banks."
Expanding the proportion of credit loans for mid-to-low credit borrowers is also a task. The proportion of credit loans for mid-to-low credit borrowers out of KakaoBank's total household and personal business credit loan balance in the first quarter of this year was 32.3%, which is up from the fourth quarter of 2025 (32.1%), but a 0.5 percentage point decrease compared to the same period last year (32.8%). As the government urges financial firms to strengthen inclusive finance, the role of internet-only banks established for this purpose is growing, making it necessary to maintain or increase the proportion of credit loans for mid-to-low credit borrowers.
KakaoPay, another financial subsidiary of the Kakao Group, also posted its highest quarterly performance with an operating profit of 32.2 billion KRW on a consolidated basis in the first quarter of 2026. This is a 630.9% increase compared to the same period last year (4.4 billion KRW). Net profit was 34.7 billion KRW, a 141.5% increase compared to the same period last year (14.4 billion KRW). KakaoPay's business divisions include payment, finance, and platform services, and its subsidiaries include KakaoPay Securities, KakaoPay Insurance, KP Insurance Services, and Paymint.
KakaoPay cited the earnings contribution of its financial subsidiaries and profitability improvements through operational optimization as the background for its strong performance. In fact, its core subsidiary, KakaoPay Securities, achieved an operating profit of 23.6 billion KRW in the first quarter of this year, which is more than half of its total annual operating profit for 2025 (42.7 billion KRW). Shin Won-keun, CEO of KakaoPay, said, "This signifies that KakaoPay has evolved into a powerful financial ecosystem that combines profitability and scalability," adding, "We will ensure that technological innovation leads to an increase in corporate value."
However, KakaoPay is also burdened with internal and external challenges such as judicial risks and strike threats. According to industry sources, KakaoPay filed a lawsuit at the end of March to cancel the fine imposed by financial authorities. This follows the financial authorities' imposition of a 13 billion KRW fine along with an institutional warning last February. During an on-site inspection by the Financial Supervisory Service, it was discovered that KakaoPay had provided 54.2 billion instances of personal credit information to Alipay without customer consent between August 2018 and May 2024.
Regarding this incident, KakaoPay has argued that the transfer of information between the principal and the commissioned company did not require customer consent. KakaoPay was also fined approximately 5.6 billion KRW by the Personal Information Protection Commission (PIPC), and a lawsuit to cancel this is also underway. The first-instance ruling on the lawsuit with the PIPC in early June is expected to influence the lawsuit with the financial authorities as well.
Labor-management conflicts also need to be resolved. On May 20, the Kakao Labor Union (Kakao Branch of the Federation of Korean Chemical Workers' Unions) held a rally at Pangyo Station Square in Seongnam, Gyeonggi Province, and announced that strike votes had been passed at five entities: Kakao headquarters, KakaoPay, Kakao Enterprise, XL Games, and DK Techin. KakaoPay secured the right to strike, which allows for slowdowns or strikes, after receiving a decision to suspend labor-management negotiations from the Gyeonggi Regional Labor Relations Commission on the 15th. It is reported that labor and management have failed to reach an agreement on the scale of performance incentives and wage increase rates.