[THE INVESTOR] Kakao Bank, the country’s second internet-only bank, is rapidly catching up with regional banks across the country, data showed on Aug. 16.
As of end-June, Kakao Bank’s assets came to 9.65 trillion won (US$8.50 billion), up from 7.92 trillion won three months earlier. It assets already exceeded that of Jeju Bank -- the smallest regional bank -- with 5.69 trillion won in December last year.
It is now trailing Jeonbuk Bank which has 17.5 trillion won in assets.
Launched on July 27, 2017, Kakao Bank has been adding about 1.9 trillion won in each quarter, and at this rate could outpace Jeonbuk bank by end-2019, according to industry watchers.
“If Kakao Bank maintains this growth rate, it can become bigger than many local banks by 2020 when it is expected to go public,” said one source, declining to be identified.
Six regional banks, including BNK Bank and Daegu Bank, have an average of 36 trillion won in assets while commercial lenders hold an average of 268 trillion won.
Kakao Bank and K-bank, the country’s first internet-only bank which had 1.54 trillion won in assets as of end-March, might get a boost as President Moon Jae-in has pledged to ease some regulations that ban non-financial companies from owning more than 4 percent stake in a lender.
“One of the basic principles of Korean finance is the separation of banking and commerce. If the current system, however, tamps down growth in new industries, new approaches need to be taken,” Moon said. “While adhering to the broad principle of separating banking and commerce, we should give virtual banks more room to maneuver.”
Several bills have been now submitted to the National Assembly that would allow non-financial firms to raise their stake in internet-only banks up to 50 percent.
By Park Ga-young (email@example.com)