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VIG Partners, a Seoul-based private equity firm, is reportedly considering between 70 billion won ($62.6 million) and 100 billion won in equity financing for Korea's internet-only bank, K bank, according to industry sources, Sunday.
This development is the latest in the months-long effort towards a capital increase of 670 billion won by the internet-only bank whose market competitiveness has fallen behind that of its rival Kakao Bank, mostly due to a failure to draw in enough capital investment.
The addition of K bank to VIG's investment portfolio will help the private equity firm diversify its earnings, given the surging demand for online transactions brought on and prolonged by the COVID-19 pandemic.
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About 30 percent, or 200 billion won, will be put up by BC Card, the bank's largest shareholder. The remaining 470 billion won will be drawn from local and foreign strategic investors, including private equity firms, pension funds and brokerages.
VIG Partners, formerly known as Vogo Investment Group, is the second major private equity firm, alongside MBK Partners, reportedly considering about 100 billion won in investments in K bank, through a special fund.
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As of 2020, BC Card has a 34 percent stake in the bank, followed by Woori Bank (19.9 percent), and NH Investment & Securities (10 percent). Other shareholders include IMM Private Equity (6.7 percent) and Hanwha Life Insurance (3.8 percent). GS Retail, a subsidiary GS Group, has a 3.8 percent stake. Two online payment service providers ― KG Inicis and Danal ― each have a 3.1 percent stake.
K bank was launched in April 2017 with 250 billion won in capital, and has since increased in size to 900 billion won through seven rounds of equity financing. K-bank reported a net loss of 105.4 billion won in 2020, falling deeper into the red from a net loss of 100.8 billion won a year earlier.
