[2024 National Audit] K-Bank's High Dependence on 'Upbit', Lee Bok-hyun "Important Risk Factor, Will Monitor Closely"

National Assembly Political Affairs Committee Financial Supervisory Service Audit
Lee Bok-hyun "Have continuously guided regarding excessive dependence"

Lee Bok-hyun, Governor of the Financial Supervisory Service, is responding to a lawmaker's question during the National Assembly's Political Affairs Committee audit of the Financial Supervisory Service held on the 17th. Photo by Kim Hyun-min

Lee Bok-hyun, Governor of the Financial Supervisory Service, stated that he has continuously provided guidance regarding K-Bank, an internet-only bank preparing for an initial public offering (IPO), and its excessive dependence on the virtual asset exchange Upbit.

On the 17th, during a National Assembly Financial Services Committee audit, Lee responded to a remark by Lee Kang-il, a member of the Democratic Party of Korea, who pointed out, "In general banks, it is virtually unheard of for a specific company's funds to be concentrated to the extent seen in K-Bank," by saying, "I am somewhat aware of the overall market trend," and added, "I have consistently advised and guided them to reduce this concentration."

According to K-Bank's securities registration statement, as of the first half of 2024, out of a total fundraising amount of 23 trillion won, approximately 90%, or about 21 trillion won, is sourced from customer deposits. Of this 21 trillion won, 4 trillion won comes from Upbit's single customer deposits, accounting for about 20%.

Assemblyman Lee pointed out, "Although K-BANK recorded a profit of 85.4 billion won in just the first half of this year, it will have to bear an annual interest cost of 86.7 billion won solely on Upbit deposits going forward," and questioned, "It is doubtful whether independence without Upbit is possible."

In response, Governor Lee said, "From the perspective of bank soundness and operations, it is indeed an important risk factor," but added, "However, whether this was appropriately disclosed to investors seems to be a somewhat different issue in the review of the securities registration statement."

Regarding Assemblyman Lee's criticism that "the Financial Supervisory Service should have thoroughly managed the fund concentration issue according to the bank supervision enforcement rules but failed to take appropriate measures," Governor Lee replied that they will carefully address investor protection issues and others.

Governor Lee stated, "I will take your pointed concerns seriously," and added, "Since the IPO process is ongoing, we will closely monitor investor protection, proper disclosure issues, and the bank's soundness."

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