Toss re-enters race for internet-only bank
The Toss consortium led by the mobile money transfer app operator Viva Republica submitted a bid to open the country’s third internet-only bank, the Financial Services Commission (FSC) said Tuesday.
According to the FSC, two other consortia — Soso Smart Bank and Familia Smart Bank — also applied for an internet banking license.
Viva joined hands with KEB Hana Bank, Standard Chartered (SC) Bank Korea and other companies to bid for the license that it failed to obtain during a previous round of bidding in May.
“As we mark the beginning of Korea’s fintech industry, we want to come up with a new type of internet-only bank which goes beyond existing financial firms’ imagination,” the company said in a press release.
The fintech firm is the consortium’s largest shareholder with a 34 percent stake.
KEB Hana Bank, Hanwha Investment &Securities, the Korea Federation of SMEs and E-Land World are the second-largest shareholders each owning a 10 percent stake.
SC Bank Korea (6.67 percent) and Welcome Savings Bank (5 percent) also joined the consortium; while Altos Ventures, Goodwater Capital and Ribbit Capital — U.S. venture capital firms that have invested in Toss - are also participants.
Daou Kiwoom Group, which submitted a bid in the first round of bidding, said it decided not to reapply for the license.
“We discussed a reapplication with participants in our previous consortium, but we decided not to join the bidding this time,” said the owner of Kiwoom Securities, which also failed to obtain a license in May.
The “Kiwoom Bank” consortium, consisting of Kiwoom Securities, KEB Hana Bank, SK Telecom and several other companies was rejected for its lack of innovativeness.
Observers regard KEB Hana Bank’s exit from the consortium as the reason for the Kiwoom decision.
The Soso Smart Bank consortium is composed of small merchants, and the Familia Smart Bank consortium is comprised of individual investors.
These consortia, however, face a tall task to prove their financial stability and innovativeness.
According to the FSC, preliminary approval is scheduled to be granted by the end of 2019.
Currently, there are just two internet-only banks in Korea, Kakao Bank and K bank.
The former managed to post a net profit in the first half of the year, while the latter has halted loans due to a lack of capital.
The Kiwoom Securities headquarters on Yeouido and the Viva Republica headquarters in Gangnam, Seoul.