K bank may go pub­lic in 2022 ‘at ear­li­est’

The Korea Times - - FINANCE - By Park Jae-hyuk pjh@ko­re­atimes.co.kr

K bank will need at least two more years be­fore it can go pub­lic, de­spite in­creased ef­forts from the na­tion’s first in­ter­net-only bank to nor­mal­ize busi­ness fol­low­ing a 400 bil­lion won ($335 mil­lion) cap­i­tal in­crease and the fi­nan­cial reg­u­la­tor’s ap­proval al­low­ing BC Card to be­come the bank’s largest share­holder.

Lee Mun-whan, the bank’s CEO, told re­porters at a press con­fer­ence Tues­day that his com­pany would be prof­itable in 2022 at the ear­li­est and its ini­tial pub­lic of­fer­ing (IPO) could take place af­ter the turn­around.

K bank suf­fered 24 bil­lion won in losses dur­ing the first quar­ter of this year, and saw a net loss of 100 bil­lion won in 2019.

The dis­ap­point­ing re­sult was mainly at­trib­uted to the fact that its op­er­a­tions had been vir­tu­ally sus­pended last year un­til re­cently. The lender has un­der­gone dif­fi­cul­ties due to a cap­i­tal short­age, since KT was barred from be­com­ing the bank’s largest share­holder over its al­leged vi­o­la­tion of the Fair Trade Act.

Af­ter BC Card, an af­fil­i­ate of KT, was al­lowed to be­come K bank’s ma­jor­ity share­holder, how­ever, the lender has been able to nor­mal­ize op­er­a­tions and bol­ster its cap­i­tal base.

Since the bank brought its to­tal cap­i­tal to 900 bil­lion won with the paid-in cap­i­tal in­crease late last month, the com­pany has been ex­pected to pur­sue an IPO as its medium- to long-term plan.

Its ri­val Kakao Bank pre­par­ing for an IPO was an­other rea­son that mar­ket ob­servers have an­tic­i­pated the K bank IPO.

Dur­ing a press con­fer­ence in April,

Kakao Bank CEO Yun Ho-young un­veiled his com­pany’s IPO plan, in­tended to raise funds to de­velop con­tact­less ser­vices and ex­pand its busi­ness. Kakao Bank posted its first an­nual sur­plus of 13.7 bil­lion won in net profit last year.

But Lee, the for­mer BC Card CEO who moved to K bank in March, has main­tained a low pro­file.

“It is too early to talk about an IPO,” he said. “The turn­around will be avail­able in 2022 at the ear­li­est and 2023 at the lat­est.”

Ac­cord­ing to the CEO, K bank plans to fo­cus on in­creas­ing cap­i­tal and mak­ing prof­its for a while. He said his com­pany is con­sid­er­ing in­creas­ing its cap­i­tal up to 1.5 tril­lion won, through a cou­ple more paid-in cap­i­tal in­creases af­ter the mid­dle of next year.

“Many in­vestors are in­ter­ested in in­ject­ing cap­i­tal into our com­pany, but it de­pends on our busi­ness per­for­mance,” he said.

In or­der to boost prof­its, he came up with an apart­ment mort­gage plan of­fered ex­clu­sively on­line that will be launched this month and has plans for new col­lab­o­ra­tions with the bank’s main share­hold­ers, such as KT and BC Card.

The bank’s mort­gage plan will al­low cus­tomers to bor­row money us­ing their mo­bile phones with­out vis­it­ing off­line branches. K bank will lend money to bor­row­ers at a 1.64 per­cent in­ter­est rate at the low­est.

The lender will also at­tract KT users to open K bank ac­counts with telecom­mu­ni­ca­tion fee dis­counts that will be of­fered to those who pay their bills through K bank ac­counts or its debit cards.

The bank is also in talks with BC Card to co­op­er­ate in the credit card busi­ness.

Courtesy of K bank

K bank CEO Lee Mun-whan speaks dur­ing a press con­fer­ence at the Korea Fed­er­a­tion of Banks head­quar­ters in Seoul, Tues­day.

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