KakaoBank said on the 4th that it is pushing for mergers and acquisitions (M&A) targeting a capital company. As government regulations on household loans have put the brakes on growth potential in Korea's banking sector, the plan is to expand into nonbanking areas.
Kwon Tae-hoon, KakaoBank chief financial officer (CFO), said on an annual 2025 earnings conference call that "we currently see payment and capital companies as priority M&A review targets."
Kwon said, "In particular, a capital company is positive in that it can enter a new market that internet banks have not been able to access," adding, "Profitability has declined as we have gone through a period of rising interest rates, but considering the return on equity (ROE) level when normalized, we judge that the financial contribution would be high."
Earlier, KakaoBank announced a value-up plan in Nov. 2024 and set a goal of 15% ROE by 2030. ROE is the value obtained by dividing net income for the year by total equity; the higher this figure, the more efficiently a company uses its capital to generate substantial revenue.
Because of this, some say KakaoBank's review of new businesses aims to diversify revenue sources to meet its ROE target. The bank intends to achieve mid- to long-term profitability metrics through growth driven by external engines such as equity investments or M&A beyond banking.
Meanwhile, KakaoBank's annual operating profit last year was 649.4 billion won and net income was 480.3 billion won, up 7.0% and 9.1%, respectively, from 2024. Fourth-quarter operating revenue was 759.0 billion won, up 2% from the same period a year earlier.