Major Shareholders Dampen K-Bank's Stock Momentum

Woori Bank Sells Entire Tradable Stake on Listing Day

Bain Capital, a Financial Investor, Also Sells Part of Its Shares

June and September Lock-up Expirations Pose "Sell-Off Bomb" Risk

Some major shareholders of K Bank, which succeeded in listing on the KOSPI after three attempts, sold their shares on the day of listing. There are growing concerns that the stock could face a larger decline in June and September, when a large portion of lock-up (mandatory holding) shares will be released.

According to the Financial Supervisory Service's electronic disclosure system on the 16th, Woori Bank, the second-largest shareholder of K Bank, sold 7,536,442 K Bank shares at 8,738 won per share on the listing day, March 5. This sale reduced Woori Bank’s stake in K Bank from 11.08% to 9.22%. The shares sold this time accounted for the entire 1.86% stake held by Woori Bank that was not subject to a lock-up agreement. Through this sale, Woori Bank earned a profit of approximately 65.9 billion won. Woori Bank can continue to realize profits from additional share sales in the future, as it still holds 9.22% of K Bank shares (about 37.39 million shares) that are voluntarily locked up for six months following the listing.

Bain Capital, which participated as a financial investor (FI) in 2021, also sold 15% of its shares (637,6891 shares) that were not subject to a lock-up. Like Woori Bank, Bain Capital sold 953,786 shares (0.23% of total shares) at 9,081 won per share on the day of listing, earning a cash profit of 8.7 billion won. Bain Capital still has 5,423,105 shares available for sale, but had not sold any more shares as of the 13th.

MBK Partners, which participated as an FI with the same stake as Bain Capital, had not sold any of its shares as of the 11th. Other financial investors, such as Saemaeul Geumgo, JS Private Equity, and Shinhan Asset Management, have not yet submitted reports on their shareholdings. For NH Investment & Securities, which participated as a strategic investor (SI) alongside Woori Bank, all of its shares (accounting for 5.11% stake) are subject to a six-month lock-up period after the listing.

K Bank’s stock price has continued to perform poorly. As of the closing price on the listing day, March 5, it was 8,330 won, but fell to the 7,000-won range (7,750 won) the next day, and except for March 9 (6,930 won), it has remained in the 7,000-won range (7,110 won on the 13th).

In the market, there are concerns that K Bank’s stock could experience a larger decline in June and September when the mandatory holding periods expire and a large number of shares are released. The mass selling of shares could not only impact the stock price, but also erode investor sentiment. Such concerns are especially pronounced for companies where private equity funds (PEFs) are key shareholders. Since PEFs, as financial investors, are structurally required to recover their investment at a certain point, rapid post-listing share sales can lead to perceptions that they have little intention of long-term ownership.

A similar pattern was seen with KakaoBank, another internet-only bank. Even though KakaoBank’s stock price was on the rise after listing, major shareholders selling their stakes resulted in significant short-term volatility. Before the listing, TPG Capital and Anchor Equity Partners (Anchor PE) each invested about 250 billion won in KakaoBank, securing roughly a 2.6% stake.

Unlike K Bank, KakaoBank’s stock rose immediately after listing, prompting Anchor PE to recover its investment through means such as recapitalization (stock-backed loans). Additionally, just one month after the listing, Korea Post sold about 13.68 million shares (about 2.9% stake) through a block deal worth approximately 1 trillion won, resulting in an 8% share price drop in a single day. A year later, KB Kookmin Bank also sold about 14.7 million shares via a block deal, causing the price to drop another 8% and hit a new low. KakaoBank’s share price hit a peak of 94,400 won immediately after listing, but then continued to fall to the 20,000-won range, illustrating significant volatility. This is a prime example of how large investors’ share sales can have a direct impact on a company’s stock price.

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