DGB Daegu Bank, a regional lender, has sought regulatory approval for its transition to a commercial bank, with plans to commence nationwide operations as early as April.
The bank's parent company, DGB Financial Group, on Wednesday announced it had applied with the Financial Services Commission to alter the banking subsidiary's status.
If the lender gets the green light, it will mark the country's first new commercial bank since the establishment of the Peace Bank of Korea in 1992.
Notably, Daegu Bank will bypass the preliminary approval stage, proceeding directly to official approval. This expedited process stems from a recent amendment to banking licensing regulations, allowing regional banks to revise authorization conditions without nullifying the original license for commercial conversion.
The firm has met all significant requirements for approval, including equity capital of more than 100 billion won ($75.3 million) -- with Daegu Bank holding 700.6 billion won in equity capital.
Established in 1967 as South Korea's inaugural regional bank, Daegu Bank expressed its intention to transition to the commercial sector last year. This decision followed the Financial Services Commission's approval for regional banks to pursue such transitions, aiming to reduce the dominance of the five major Seoul-based commercial banks.
However, the conversion faced delays when Daegu Bank became embroiled in a financial watchdog investigation regarding allegations of its employees illicitly opening approximately 1,600 accounts under customers' names without their consent.
The Financial Supervisory Service will launch a committee meeting soon to determine the level of sanctions.
Daegu Bank anticipates completing its conversion within the first quarter of this year and will rebrand itself as "iM Bank" for its national operations.