K-Bank's 'Capital Increase', KakaoBank's 'IPO'... Internet Banks Accelerate Growth Pace

Toss Bank Expected to Launch in July
Forming a Three-Way Competition with Kakao Bank and K Bank

[Asia Economy Reporter Kiho Sung] Internet-only banks are accelerating their efforts to expand ahead of the launch of the third player, 'Toss Bank,' in the second half of this year. K-Bank is raising over 1 trillion won in capital expansion riding the cryptocurrency boom, while Kakao Bank is pushing forward with its listing. With the full-scale launch of Toss Bank, competition among internet banks is expected to intensify further.

According to the financial sector on the 23rd, K-Bank is in the final stages of securing 1.2 trillion won in investment from existing shareholders and large private equity funds (PEFs). The investors include ▲U.S.-based PEF Bain Capital (about 200 billion won) ▲domestic PEF MBK Partners (about 200 billion won) ▲Shinhan Alternative Investment Management-JS PE (about 100 billion won) ▲MG Saemaeul Geumgo Central Association (about 100 billion won). Among existing shareholders, BC Card, the largest shareholder, is expected to invest 400 billion won, and other shareholders such as Hanwha Life Insurance are reportedly adding about 100 billion won.

Initially, K-Bank's rights offering was expected to raise about 600 billion won, but the amount doubled, indicating a huge success. The main driver behind the popularity of K-Bank's rights offering is 'Upbit.' K-Bank has a real-name account transaction partnership with the cryptocurrency exchange Upbit. As cryptocurrency popularity surged recently, K-Bank's user base has also skyrocketed. According to K-Bank, as of the end of April, the number of customers reached 5.37 million, an increase of 1.46 million from the end of the previous month. This is the largest monthly increase to date. During the same period, deposit and loan balances increased by 3.42 trillion won and 850 billion won, respectively.

Through this capital expansion, K-Bank is expected to secure a capital scale of about 2.1 trillion won, comparable to the internet bank leader Kakao Bank (2.0382 trillion won as of the end of last year), laying the groundwork for competition. Launched in 2017 with an initial capital of 250 billion won, K-Bank has undergone seven rounds of rights offerings since then. K-Bank aims for an initial public offering (IPO) in 2023.

Kakao Bank, valued at 20 trillion won in the market, is aggressively expanding its size through listing. It submitted a preliminary listing review application to the Korea Exchange last month and is currently awaiting the review results. Kakao Pay posted a record quarterly net profit of 46.7 billion won in the first quarter of this year, a 152% increase compared to the same period last year.

The launch of the new competitor Toss Bank is also imminent. Viva Republica, the operator of Toss, applied for the main license for an internet bank in February, and the financial authorities are currently reviewing the application. They are pushing forward with the goal of launching in July.

A financial sector official said, "Competition is intensifying as financial holding companies are also exploring the possibility of launching internet banks, including Toss Bank," adding, "The race to expand size to gain market leadership is likely to continue for the time being."

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