[Photo provided by Viva Republica]
A third internet bank Toss Bank in a consortium of 11 led by fintech firm Viva Republica gained clearance from the Korean financial authority to start business within the next six months.
The Financial Services Commission (FSC) said that it has decided to give preliminary approval to Toss Bank to operate as an online-only bank after reviewing opinions of its outside evaluation committee. Another bidder Soso Smart Bank was turned down.
Toss Bank also was rejected in its first bid in May. Since then it bolstered its team by bringing in two lenders KEB Hana Bank and Standard Chartered Bank as well as Welcome Savings Bank, SME association, Hanwah Investment & Securities and Ribbit Capital.
The FSC evaluated that the largest shareholder of Toss Bank has innovation capacity and strong will to contribute to transforming the country’s financial industry, and that it will be able to achieve expected results as an online-only bank as it is relatively well-prepared in all aspects in terms of innovativeness, acceptability, and stability of its business plan.
The largest shareholder of Toss Bank is fintech firm Viva Republica, the operator of local peer-to-peer payment app Toss.
The firm converted all of its redeemable convertible preference shares perceived as debt under International Financial Reporting Standards into convertible preferred stocks last month to smarten up its capital base.
Toss Bank is expected to begin operations in July 2021 after final approval from the financial regulator and more than a year of preparation.
Toss Bank would make the third player in the internet-only bank in Korea after Kakao Bank and K-Bank.
Familia Smart Bank voluntarily withdrew from the bid last week. The FSC’s outside committee conducted evaluation on Toss Bank and Soso Smart Bank from Dec. 12-14. It judged that Soso Smart Bank lacked capital raising and business plan.
By Lee Eun-joo
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