K-Bank Changes Ownership, Accelerates Normalization... Can It Catch Up with KakaoBank?

K Bank's New Largest Shareholder is BC Card
Accelerating the Recovery of the 'No.1 Internet Bank' Status

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[Asia Economy Reporter Kangwook Cho] K-Bank, which welcomed BC Card as its new largest shareholder, is accelerating efforts to normalize management. Attention is focused on whether K-Bank, the 'first internet bank,' can catch up with KakaoBank, which surged from a latecomer to become the industry leader.

Financial Services Commission Approves BC Card and Woori Bank’s Excess Shareholding Limits in K-Bank

According to the financial sector on the 26th, the Financial Services Commission approved BC Card and Woori Bank’s excess shareholding limits in K-Bank at its regular meeting on the 22nd. Accordingly, BC Card can hold up to 34% of K-Bank’s shares. Woori Bank is allowed to hold 19.9% of the shares.

BC Card plans to acquire 39,002,271 shares of K-Bank (equivalent to 195 billion KRW) through a paid-in capital increase on the 28th. After the capital increase, BC Card will acquire 61,312,213 shares of K-Bank, becoming the largest shareholder with a 34% stake.

Previously, K-Bank had KT as its major shareholder, but it faced management difficulties after failing to pass the review due to violations of the Fair Trade Act. As a result, K-Bank introduced BC Card as its new major shareholder.

With the long-standing major shareholder eligibility issue resolved, K-Bank now has a path to normalize its business and make a fresh leap forward as the ‘first internet-only bank.’

K-Bank plans to proceed with a 400 billion KRW paid-in capital increase as scheduled on the 28th to strengthen its capital base. Woori Bank, which resolved to participate in the 160 billion KRW capital increase at last month’s board meeting, is expected to become the second-largest shareholder following BC Card.

Originally, KT led the launch of K-Bank, but due to past violations of the Fair Trade Act, it failed to clear the financial authorities’ major shareholder eligibility screening. As a result, K-Bank struggled with capital shortages, posting losses of 79.7 billion KRW in 2018 and 100.8 billion KRW last year. Eventually, K-Bank began suspending new loan product sales from April last year.

KakaoBank Turns Profitable Three Years After Launch... Total Assets Exceed K-Bank by More Than Tenfold

While the eldest sibling K-Bank remains in a ‘soft opening’ state, KakaoBank is sailing smoothly. KakaoBank recorded a net profit of approximately 13.7 billion KRW last year, turning profitable three years after its launch. Monthly users have surpassed 10 million.

Additionally, KakaoBank posted a net profit of 18.5 billion KRW in the first quarter of this year, a remarkable 181.3% increase compared to the first quarter of last year. This strong growth momentum means it earned more revenue in the first three months of this year than in the entire previous year. As of the end of March, KakaoBank’s total assets stood at 23.4 trillion KRW, widening the gap with K-Bank, which has assets in the 2 trillion KRW range.

With about 400 billion KRW in capital increase ahead, K-Bank is accelerating its comeback by launching various unsecured loan products.

K-Bank recently introduced three household loan products: ‘Unsecured Loan,’ ‘Overdraft Loan,’ and ‘Unsecured Loan Plus.’ This marks K-Bank’s first new loan business in over a year.

Synergy between K-Bank and BC Card is also anticipated. Lee Moon-hwan, who took office as K-Bank’s CEO in March, served as BC Card’s president for over two years starting in 2018.

An industry insider said, “K-Bank is expected to reorganize its largest shareholder lineup and speed up normalization,” adding, “With KakaoBank’s IPO and Toss Bank’s launch also scheduled, competition in the internet banking market will intensify.”

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