The mixed performance between Korea’s two internet-only lenders has deepened with Kakao Bank keeping up surplus streak while K-Bank’s losses balloon.
According to the Korea Federation of Banks on Monday, Kakao Bank earned a net profit of 15.4 billion won ($13 million) in January-September this year while K-Bank booked a net loss of 74.2 billion won over the same period.
Kakao Bank was launched in July 2017, trailing K-Bank that began the country’s first internet-only banking services three months earlier. In the first year, both online-only banks were in the red. But Kakao Bank turned around from the first quarter of this year and kept up profit.
Last month, tech major Kakao Corp. became the largest shareholder of Kakao Bank, marking the country’s first case of a non-financial company owning a majority stake in a bank. The change has enabled Kakao Bank issue new shares worth 500 billion won and bump up its paid-in capital to 1.8 trillion won.
In contrast, K-Bank, despite being the country’s first internet-only bank, has remained in the red with deteriorating business conditions. Its lending business has been suspended since April due to liquidity shortage. Refueling has been delayed due to the flop in its plan to issue new shares worth around 500 billion won to make telco KT Corp. its largest shareholder. The recapitalization plan was put on halt after financial authorities disapproved KT as a major shareholder of the internet-only bank for its price collusion history.
K-Bank pins hope on a proposed revision in law that can allow a non-financial company with a history of violating fair trade regulations to own a majority stake in a lender. The revision was recently passed at the National Assembly’s policy committee, paving the way for recapitalization of K-Bank.
[ⓒ Pulse by Maeil Business Newspaper & mk.co.kr, All rights reserved]