Internet-only K bank raises capital with fresh money from shareholders

Lim Chang-won Reporter Posted : 2018-12-20 17:54 Updated : 2019-01-24 14:20
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[Courtesy of K bank]

SEOUL -- South Korea's first internet-only bank, K bank, increased its capital with an injection of new capital from shareholders, to ease a shortage of money for easy lending to young smartphone users.

K bank's capital rose to 477.4 billion won ($424.3 million) Thursday after shareholders completed the payment of 74.3 billion won in common stock. Some 23.18 billion won in convertible notes was paid on October 30. As a new shareholder, IMM, a private equity fund, chipped in 47 billion won to own 9.9 percent.

K bank, which started its service in April last year, is a consortium led by KT, the country's top telecom company, and other companies including GS Retail, Hanwha Life Insurance and Alipay, the payment platform of China's e-commerce giant Alibaba.

KT has vowed to increase its stake in K bank to a maximum limit of 34 percent if a new law governing internet banks comes into force on January 17. The current law, aimed at preventing conglomerates from dominating banks, limits the industrial ownership of banks. President Moon Jae-in has promised to allow two internet-only banks, K bank and Kakao Bank, to gain greater access to capital.

On Wednesday, Choi Jong-ku, chairman of the Financial Services Commission (FSC), said the commission plans to give preliminary approval to a third internet-only bank in May next year. Internet-only banks have forced commercial banks to cut commission fees and renovate their online and mobile banking services.