Buoyed by record earnings last year, internet-only bank targets 5 trillion won valuation
K bank, South Korea’s internet-only bank, is making a third attempt at a market listing this year.
According to the company Thursday, the bank's board of directors approved a resolution late Wednesday to move forward with an initial public offering.
This marks K bank's third attempt at an IPO. Its first attempt was halted in February 2023 due to a subdued investment environment. In its second attempt in 2024, K bank targeted an Oct. 30 listing with an estimated market valuation of 5 trillion won ($3.44 billion) but delayed once again due to disappointing demand.
The latest IPO push comes after the bank reported a profitable year last year, posting a record 128.1 billion won in annual net profit — a tenfold increase from the previous year. The bank's user base also saw significant growth, expanding to a record 12.74 million, reflecting a 33 percent on-year increase.
The online lender is expected to begin its pre-IPO process this year, with a deadline set for July 2026.
In 2021, when K bank secured investments from several investors ― including Bain Capital, MBK Partners and JS Private Equity ― its largest shareholder, BC Card, granted these investors drag-along and call options in the event the bank's market debut does not occur by July 2026. Should the bank fail to list by that time, BC Card may face the burden of returning the 725 billion won investment, along with the risk of being forced to sell its 33.72 percent stake in K bank.
Whether K bank can retain its 5 trillion won target valuation, already downgraded from the 8 trillion won target in 2022, remains uncertain.
One concern is the bank's significant reliance on local cryptocurrency operator Upbit. As of the end of 2024, funds from Upbit are estimated at around 7 trillion won, accounting for nearly a quarter of K bank's total deposits, which amounted to 28.57 trillion won. Given the high volatility of the digital asset market, K bank's dependence on Upbit has been flagged as a potential liquidity risk during downturns.
The approaching end of K bank's partnership with Dunamu, the operator of Upbit, in October also presents a potential risk. Although the two extended their partnership for another year last year, Dunamu, as the market leader, may still seek a new partner.
"The board approval marks the first step in the new IPO process," a K bank official said. "While there is no set timeline or target valuation, we will ensure thorough preparations to secure a fair valuation and list when market conditions allow."
K bank, which launched in April 2017 as Korea's first internet-only bank, is now one of three such banks operating in the country, along with Kakao Bank and Toss Bank.
jwc@heraldcorp.com
