April 18, 2024

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[THE INVESTOR] K bank, Korea’s first internet-only bank, is seeking a capital increase of at least 100 billion won (US$94.50 million), according to industry sources on April 5.

The one-year-old bank is actively seeking subscription to the capital increase from private equity firms including MBK Partners, the sources said.

This would be in addition to a planned capital hike of 150 billion won. The increase is scheduled to be completed by the end of next month, but the funding plans have hit a number of setbacks, such as the amount being just half of what was expected, and the plans being postponed for months. 

Due to regulations banning non-financial firms from owning more than 10-percent stake in a financial firm, K bank had been stumped for finding ways to raise capital.

The bank desperately needs fresh funds to finance new services, such as overseas remittance plans and mobile payment services. It reported a net loss of 84 billion won in 2017.

K bank was launched in April last year with a paid-in capital of 250 billion won by a consortium of KT Corp., Woori Bank and 19 other companies. The following September, property developer MDM and parent of Korea Asset In Trust, a real estate trust firm, became a new shareholder after investing 14 billion won.

By Park Ga-young (gypark@heraldcorp.com)