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K bank’s capital jump to W2.1tr with inflow of new shareholders

MBK Partners, Bain Capital to inject W200b each to become 2nd-largest shareholders

K bank’s headquarters in Seoul (K bank)
K bank’s headquarters in Seoul (K bank)


K bank, South Korea’s first Internet-only lender, more than doubled its paid-in capital via share purchases from major private equity funds, the bank said Wednesday.

The move comes as the company gears up for the further growth amid heightened competition from other digital banks including Kakao Bank and Toss Bank.

The board of directors of K bank on Wednesday morning made the decision to increase the amount of capital by 1.25 trillion won ($1.11 billion) or 192.29 million shares, to 2.16 trillion won

Participating in the latest capital increase, to be completed June 29, are private equity funds MBK Partners and Bain Capital.

The two companies intend on investing 200 billion won to buy 30.7 million shares each. This will put the two companies as the second-largest shareholders with a 9.02 percent stake each.

Woori Bank, currently the No. 2 shareholder with a 19.9 percent stake, will become the fourth-biggest and NH Investment and Securities the seventh-largest as they decided not to join the latest capital increase.

MG Community Credit Cooperatives will inject 150 billion won for 23 million shares, emerging as the fifth-largest shareholder. Another private equity fund co-operated by Shinhan Alternative Investment Management and JS Private Equity Fund will put in 125 billion won (19.23 million shares), the bank said.

Other smaller new investors include mobile game maker Com2us, which will buy 50 billion-won of shares.

Out of the total new shares, 524.9 billion won worth of shares will be allocated to their existing shareholders in accordance with their existing share proportions.

An official from K bank said that BC Card aims to maintain its current holding of 34 percent after the capital increase, by absorbing portions of Woori and NH and other existing shareholders that do not take part in.

The company plans to use the new capital to develop new services and increase cooperation with big platforms, the lender said.

It also plans to advance its own credit scoring system that can be used for loans for thin file holders, the company’s target clients.

As of the end of April, K bank’s deposits and loans stood at 4.68 trillion won and 12.14 trillion won, respectively. This compares with the country’s second Internet-only lender Kakao Bank’s deposits of 23.2 trillion won and loans of 24.9 trillion won. K bank saw a boost in deposits in recent months due to its partnership with cryptocurrency exchange Upbit.

“This massive capital expansion is the result of the market recognition of K bank’s innovation capability and future growth,” K bank CEO Suh Ho-sung said. “We will further strengthen the competitiveness of our basic business of deposits and loans and expand synergy with other companies, becoming a fine-tuned financial platform.” 

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