BC Card, a credit card processing firm owned by telecom giant KT, said Wednesday in a regulatory filing that it will acquire a controlling stake in internet-only K-Bank in a bid to save the cash-strapped online bank.

The announcement came a day after the card company held a board meeting, where the board decided to buy a 10 percent stake in the bank from the telecom firm for 36.3 billion won ($29.8 million) on April 17.

With the planned stake purchase, the card company will become the second-largest shareholder after Woori Bank, which holds 13.79 percent. The company also said it will increase its stake to 34 percent in the online bank by June 18 to become the largest shareholder.

The local card issuer is seeking ways to become the largest shareholder of the online bank in the face of regulatory hurdles.

Corporate entities are banned from gaining the majority of shares in a financial firm if they have a record of violating antitrust laws in the past five years. KT was fined for participating in price-fixing schemes in 2016.

At its board meeting on Tuesday, meanwhile, BC Card decided to sell its 1.45 million shares in Mastercard for 429.9 billion won. The decision is believed to have been made to secure funds to acquire K-bank shares.

The online bank officially started operating in April 2017, several months earlier than Kakao Bank, which is backed by mobile messenger giant Kakao. K-Bank, however, is considered an underdog in competition with its rival as its plans to raise funds through KT have been delayed for months. The online bank widened its operating loss from 79.7 billion won in 2018 to 100.8 billion won in 2019.

By Kim Young-won (wone0102@heraldcorp.com)