'Idle Operation' K Bank Decides on 600 Billion Won Capital Increase... Normalization Initiated (Update)

Capital Increased to 1.1 Trillion Won, Breathing Room Expected
Loan Operations Scheduled to Resume in June-July

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[Asia Economy Reporter Haeyoung Kwon] Internet-only bank K Bank has decided to proceed with a paid-in capital increase worth 600 billion KRW. With this capital increase, the capital will be expanded to 1.1 trillion KRW, which is expected to ease the lending operations of K Bank, currently at a standstill due to depleted capital.

K Bank announced on the 7th that it held a board meeting on the 6th and resolved to issue approximately 118.98 million common shares worth 594.9 billion KRW. The payment date for the new shares is set for June 18.

The paid-in capital increase will be allocated to existing shareholders according to their current shareholding ratios, and in case of forfeited shares, major shareholders will divide and subscribe to them. The common stock ownership structure of K Bank is led by Woori Bank holding 13.79%, followed by KT and NH Investment & Securities each holding 10%.

As of the 6th, K Bank’s capital stands at approximately 505.1 billion KRW. The Basel III Common Equity Tier 1 (CET1) ratio was 10.88% at the end of last year, down 0.97% from 11.85% in the third quarter of the same year. This is just above the financial authorities’ recommended minimum of 10.5%.

With this capital increase, K Bank’s capital will expand to 1.1 trillion KRW, and the BIS ratio will improve, enabling the resumption of lending operations.

A K Bank official stated, "Once the payment is completed in June, we will be able to resume lending operations," adding, "We are preparing to relaunch existing loan products and introduce new products such as apartment mortgage loans to restart lending operations."

K Bank’s decision to raise capital from existing shareholders comes as the amendment to the Internet-only Bank Act failed to pass the National Assembly, making it difficult to change the major shareholder to KT. Recognizing the need to normalize K Bank, which is currently at a standstill, the bank has shifted its direction to a capital increase targeting existing shareholders. It is reported that KT is considering an additional capital increase through BC Card, where it is the largest shareholder.

Meanwhile, K Bank is focusing on normalization by appointing former BC Card President Moonhwan Lee as the new CEO at the regular shareholders’ meeting held on the 31st of last month.

This content was produced with the assistance of AI translation services.