Toss re-en­ters race for in­ter­net-only bank

The Korea Times - - FINANCE - By Park Jae-hyuk [email protected]­re­atimes.co.kr

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.

Yon­hap

The Ki­woom Se­cu­ri­ties head­quar­ters on Yeouido and the Viva Repub­lica head­quar­ters in Gang­nam, Seoul.

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