Yun Ho-young, CEO of KakaoBank, had been widely expected to secure a sixth consecutive term after delivering record results. However, his path to reappointment has entered a different phase. A strike has become a reality for the first time since the bank’s launch, making labor-management relations a new variable. Competition with rival Toss Bank for young customers is also intensifying. In addition, auto finance, selected as the next growth engine, remains in its early stages. Attention is focused on how Yun will address these issues before his term expires in March next year.
Financial performance has supported expectations that Yun could remain in office for an extended period. KakaoBank announced last month that it posted KRW 328 billion in net profit for the first half of the year, its highest-ever first-half result. That was a 24.4% increase from the same period a year earlier. After recording KRW 480.3 billion in annual net profit last year, the bank continued its growth this year.
However, the record performance also included one-off gains. In the first quarter, the listing of Indonesia’s digital bank Superbank generated a fair-value gain of KRW 93.3 billion before taxes. First-half operating profit fell slightly from a year earlier to KRW 351.6 billion. Although second-quarter operating profit rose 14% year on year and fee and platform revenue also increased, gains related to Superbank contributed to the rise in first-half net profit.
Labor-management tensions also surfaced this year. Prolonged negotiations over wages and performance-based compensation led to the first strike since KakaoBank was launched. The union staged two full-day strikes and also conducted work-to-rule actions, including refusing overtime and holiday work.
The union later announced a five-day consecutive general strike, but the prolonged walkout was avoided after labor and management reached an agreement in principle following lengthy negotiations. They subsequently finalized a wage and collective bargaining agreement through detailed talks. Yun’s compensation was also raised during the dispute over performance-based rewards. He was found to have received KRW 8.175 billion in compensation during the first half of this year, the highest amount among incumbent financial-sector chairmen and CEOs. The union cited this as an example of the gap in performance-based compensation between management and employees.
Of that amount, KRW 7.29 billion came from gains realized by exercising performance-based stock options granted in 2019. The long-term incentive plan was designed to allow exercise if certain conditions, including customer numbers and pretax profit, were met. Its nature differs from ordinary salary or short-term bonuses.
Competition over core customer groups is also fierce. After KakaoBank took the lead in the internet-only banking market, latecomer Toss Bank rapidly expanded, intensifying the battle for young customers. KakaoBank must protect its existing customer base while finding new sources of revenue.
Auto finance is the card KakaoBank has put forward as its next growth engine. In June, KakaoBank signed a stock purchase agreement to acquire a 100% stake in Mastern Capital for KRW 24.1 billion and is proceeding with related steps, including approval from financial authorities. The move is an attempt to broaden its revenue sources beyond its household-loan-centered business structure.
Mastern Capital’s operating revenue last year was KRW 6.46297 billion. It posted a net loss of KRW 2.29843 billion, while loan-loss provisions rose sharply from KRW 98.02 million the previous year to KRW 1.50498 billion. Rather than expanding Mastern Capital’s existing business, KakaoBank plans to use its specialized credit finance license to build a new business centered on auto finance. The acquisition is understood to reflect KakaoBank’s focus on the potential for business expansion through the license rather than on the company’s current performance.
The investment will not end with the KRW 24.1 billion acquisition price. KakaoBank plans to inject approximately KRW 150 billion in additional capital in line with the scale of business growth and expand Mastern Capital’s assets to more than KRW 1 trillion. The additional capital alone would substantially exceed the acquisition price. The acquisition process has not yet been completed, and the specific timing of product launches will be decided after the acquisition. It remains to be seen whether auto finance will become a new source of revenue as planned.
A KakaoBank official told Sportschosun, "We aim to expand the non-face-to-face financial innovation technologies and expertise we have accumulated into the capital finance business, providing new financial experiences in various areas closely connected to customers’ daily lives." The official added, "Through a phased expansion of our business, we will strengthen productive finance, enhance our platform competitiveness and capital efficiency, and work to increase corporate value."
Yun’s current term runs through March next year. Despite record results, the first strike since the bank’s launch has created a new burden for his previously smooth path toward long-term tenure. Competition with Toss Bank is intensifying, while it is still too early to assess the performance of the newly launched auto finance business. The financial sector is watching closely to see whether Yun can resolve these issues and continue on to a sixth consecutive term.
Reporter Moon Ji-yeon lunamoon@sportschosun.com
This article has been translated by GripLabs Mingo AI.
