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| K bank CEO Lee Mun-whan speaks during a press conference at the Korea Federation of Banks headquarters in Seoul, Tuesday. / Courtesy of K bank |
By Park Jae-hyuk
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.
