Increasing Presence of K-Bank... All In on IPO?

Loan Interest Rate Cut, Savings Interest Rate Increase
Aiming for a Second 'Upbit Effect' through Partnership with Danggeun Market
Aggressive Moves Ahead of IPO

[Asia Economy Reporter Minwoo Lee] K-Bank, which recently raised interest rates on savings and time deposits simultaneously, is aggressively expanding its business by drastically lowering interest rates on major loan products. It is also focusing on securing users by partnering with Danggeun Market. The bank is showing signs of increasing its presence from the beginning of the year ahead of its initial public offering (IPO).

According to the financial industry on the 8th, K-Bank lowered interest rates on three loan products?credit loans, credit loan plus, and overdraft accounts (limit loans)?by up to 0.3 percentage points (p) depending on credit rating, starting from the 5th. As a result, the lower limit of interest rates for new credit loans and overdraft accounts was reduced by 0.18 p each to an annual 3.09% and 3.77%, respectively. The interest rate for the credit loan plus product also dropped by 0.20 p to a minimum of 3.88% per annum. Variable interest rates on apartment mortgage loans were also adjusted simultaneously. All credit ratings saw a 0.1 p reduction, lowering the minimum rate from 3.09% to 2.99% per annum.

Interest rates on savings and time deposits are trending upward simultaneously. After raising rates by up to 0.6 p annually in December last year, they were increased again by 0.3 p last month. Consequently, deposit interest rates can reach up to 2.40% per annum, and installment savings rates can reach up to 2.80% per annum. A K-Bank official explained, "Within a week after the rate hike, deposits increased by 50% in terms of amount, and the number of installment savings applications more than doubled." On the 2nd, the ‘Challenge Box,’ an automatic lump-sum savings product, surpassed 100,000 accounts, and to commemorate this, preferential interest rates were raised by 0.5 p annually, increasing the maximum rate to 2.5% per annum.

The bank appears to be pursuing aggressive expansion from the beginning of the year ahead of its IPO. Recently, it selected NH Investment & Securities, Citi Securities, and JP Morgan as lead underwriters, and Samsung Securities as a co-lead underwriter. Although the IPO was initially expected in 2023, there are prospects that it could be listed as early as this year. This is seen as a strategy to aggressively boost various performance indicators to increase corporate value.

The recent focus on partnership with the location-based secondhand trading platform ‘Danggeun Market’ is interpreted in this context. K-Bank is conducting a promotional event that pays about 11,000 KRW per person when users open a K-Bank account linked to ‘Danggeun Pay,’ the simple payment and remittance service launched by Danggeun Market. While other banks have also formed partnerships linking with Danggeun Pay, K-Bank is notably more proactive. Having attracted many users by being the only bank to issue real-name accounts in partnership with the virtual asset exchange ‘Upbit,’ K-Bank expects a similar effect through its partnership with Danggeun Market. Danggeun Market is the largest secondhand trading platform in Korea, with 22 million registered users and over 17 million monthly active users (MAU).

An industry insider said, "Unlike Kakao Bank or Toss Bank, K-Bank, which lacks some recognition and distinctiveness, is aggressively moving from the beginning of the year, drawing attention," adding, "Since it turned profitable faster than expected last year, it seems to be rowing hard while the tide is rising ahead of the IPO."

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