April 20, 2024

• 

[THE INVESTOR] Korea’s financial watchdog has submitted a revised bill to the National Assembly that allows firms like Kakao, Naver, Nexon and Netmarble to hold a bigger stake in internet-only banks regardless of the size of their assets, according to industry sources on Aug. 23.

Under the current banking law, a non-financial firm is banned from owning 4 percent of voting stocks in an internet-only bank. The strict rule is aimed at preventing family-run business conglomerates from using a bank as their private vault, but it makes it difficult for online banks -- Kakao Bank and K-bank -- to raise capital, especially from information and communications technology firms. Lawmakers are currently debating on how much they need to relax the law.

“According to revised bill, companies whose core focus areas are not online businesses -- such as Samsung Electronics -- will be excluded, but companies in such segments will be allowed to become the largest shareholder of online banks, even if they grow into a company with assets of 10 trillion won (US$8.90 billion) or more,” a Financial Services Commission official said.

“This fits the goal that companies focusing on fintech and big data technologies should lead the nurturing of internet-only banks,” he added.

Five different revisions have so far been submitted to the National Assembly, which aim to ease the existing rule to 25-50 percent. But it is widely believed that large business groups with assets of 10 trillion won and more will be excluded even if the law is relaxed. Some industry watchers said that mobile and internet giants would face such restrictions once they join the 10 trillion asset club.

Internet giant Kakao, which operates Korea’s No. 1 messenger app KakaoTalk, and Naver, the top internet portal operator, have 8.5 trillion won and 7.1 trillion won in assets, respectively. Leading game developers, Nexon and Netmarble, hold 6.7 trillion won and 5.7 trillion won, respectively.

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