'KakaoBank IPO Pursued with 40 Trillion Won Market Cap in OTC Market... Bubble Controversy Arises (Comprehensive)'

Kakao's 'Second Subsidiary IPO' Interest
Auditor Designation and Lead Manager Selection Planned

[Asia Economy Reporter Kim Min-young] KakaoBank, the second internet-only bank in South Korea, is planning an initial public offering (IPO). KakaoBank is considered a major IPO candidate in the financial sector, with its market capitalization on the over-the-counter market approaching that of the four major financial holding companies (Shinhan, KB, Hana, and Woori).

According to financial authorities on the 24th, KakaoBank held a board meeting the previous day and resolved to pursue an IPO. KakaoBank plans to apply for auditor designation and select an underwriting firm within this year to prepare for the IPO. KakaoBank stated, “Details such as the listing market, target timing, and listing scale will be reviewed going forward.”

Following Kakao Games, this is Kakao’s push for a “second subsidiary listing,” drawing significant market attention. KakaoBank started internet banking in 2017, following K-Bank. It is the first-tier financial license granted by financial authorities after 24 years.

Within three years of starting operations, it has established itself as the “bank in your hand” with absolute support from the 20s and 30s age group. KakaoBank operates without any offline branches and targets young customers exclusively through its mobile application (app). It has secured 12.94 million customers.

Currently, the bank’s capital is 1.8255 trillion KRW. As of the end of June, its asset size is 24.4 trillion KRW. Its Basel III-based BIS (Bank for International Settlements) capital adequacy ratio stands at 14.03%, which is as stable as commercial banks.

The delinquency rate (0.22%) is also low. As of the end of last month, deposit balances stood at 22.3159 trillion KRW, and loan balances at 18.3257 trillion KRW. Its main portfolio includes credit loans, monthly rent deposit loans, emergency loans, and overdraft loans, all easily accessible via the mobile app with simple eligibility and limit notifications. On the deposit side, products such as the “26-week savings” with varying small amounts weekly and the “Piggy Bank,” which automatically saves change under 5,000 KRW when using a check card, offer customers both saving habits and enjoyment.

The securities industry expects KakaoBank to begin formal listing procedures as early as the first half of next year. As a leader in internet banking and backed by its parent company Kakao, it has been regarded as a major IPO candidate. Current major shareholders of KakaoBank include Kakao (33.53%), Korea Investment Value Asset Management (28.60%), Korea Investment Holdings (4.93%), Kookmin Bank (9.86%), Netmarble (3.93%), SGI Seoul Guarantee (3.93%), Korea Post (3.93%), eBay (3.93%), SkyBlue (Tencent, 3.93%), Yes24 (1.97%), and employee stock ownership association (1.40%).

Recently, following the IPOs of SK Biopharm and Kakao Games, which saw their stock prices soar, KakaoBank shares are trading at high prices on the over-the-counter market amid the “public offering frenzy.” According to the unlisted stock trading platform “Securities Plus Unlisted,” as of 9 a.m. today, KakaoBank’s share price is 102,000 KRW, with a market capitalization reaching 37.2398 trillion KRW. This is comparable to the market capitalization of the four major financial holding companies (43.0652 trillion KRW as of the 23rd).

There are opinions that this over-the-counter price is inflated. The securities industry estimates KakaoBank’s value on the over-the-counter market to be between 5.4 trillion and 8.9 trillion KRW.

Since the IPO announcement, KakaoBank’s over-the-counter stock ask prices have surged from 120,000 KRW to as high as 180,000 KRW. Over-the-counter stocks have no upper or lower price limits and suffer from low liquidity, making cashing out difficult. A financial sector official said, “KakaoBank has not yet officially started the listing process, so it is uncertain when it will be listed on the stock market. Caution is needed when trading on the over-the-counter market.”

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