The bank wants to use this wide user base as a springboard for its IPO bid, which it hopes to complete before the end of 2024.
Biggest South Korean IPO of the Year?
The media outlet pointed out that K Bank has the largest market capitalization and public offering amount among all the companies attempting domestic IPOs this year.
The firm debuted in April 2017, becoming the first neobank in South Korea.
After passing a KEX screening application in 2022, it eventually shelved its plans citing a worsening IPO market.
This year, it posted KRW 85.4 billion ($64 million) in net income in H1 of FY204. That figure is “higher than any other year since its launch,” the media outlet noted.
“Based on our growth potential and profitability, we will successfully complete the IPO and further expand our customer base.”
Choi Woo-hyung, CEO of K Bank
The bank has also posted rapid increases in new users, with 1.14 million customers opening accounts in the second quarter of the financial year.
However, the bank’s IPO bid faces no shortage of obstacles. Some critics have pointed out that K Bank’s performance may be “inflated.”
South Korea household borrowing posts biggest jump in over three years https://t.co/itKQoW7zOj pic. .com/n1dYgVyaTw
— Reuters (@Reuters) September 11, 2024
They claimed that the performance of Upbit, “the number one virtual asset exchange” in South Korea may be a factor “behind” K Bank’s record-breaking performance.
Bitcoin Price Drop a Problem?
Critics also pointed to “rapid increases in short-term housing mortgage loans as another “inflationary” factor.
The outlet also claimed that “concerns about a slump in stock market” prices may yet derail the bid.
And it said that “a decline in the price of cryptocurrencies such as Bitcoin (BTC)” could also present a problem for the bid.
South Korea’s unemployment rate fell to a record low last month in a sign of ongoing strength in the labor market. Many economists expect the central bank to cut rates as soon as it sees signs that the property market is cooling https://t.co/zTcr6yOfpN pic. .com/FoJ9iGiHvn
— Bloomberg (@business) September 11, 2024
Experts also claim that the case of Kakao Bank, a rival neobank, presents a cautionary tale.
Shares in Kakao Bank ballooned by nearly 80% as the firm made its Korea Exchange market debut in August 2021.
Investor enthusiasm was high as Kakao Bank became South Korea’s first digital bank to go public.
But share prices have since slumped, despite the fact that Kakao Bank has since launched a similar banking service deal with the Upbit rival Coinone.