K bank raises W100 billion with new shares

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K bank raises W100 billion with new shares

K bank, the nation’s first internet-only bank, will raise 100 billion won ($87.5 million) by issuing stocks to its shareholding companies.

The bank announced that its board of directors on Thursday decided to issue 20 million new shares - 16 million as common shares and 4 million as convertibles, each worth 5,000 won. Newly issued shares will be distributed amongst stockholders in accordance with their ownership.

The 100 billion won worth of capital is four times that of the company’s starting capital. The bank said it will raise an additional 150 billion won at the end of the year or early next year.

K bank, which was created through a consortium led by telecommunication giant KT, currently has seven major shareholders.

Woori Bank is the top shareholder of K bank with a 10 percent stake, or 4.25 million stocks. GS25 convenience store chain operator GS Retail, Hanwha Life Insurance, payment solution provider KG Inicis and Danal each have a 9.41 percent stake with the bank, or 4 million shares. Although KT was the leader of the consortium, it only has an eight percent stake, or a total of 3.4 million shares, due to the current banking act in Korea which caps bank ownership of non-financial institutions. The current law stipulates that non-financial companies cannot hold more than 4 percent of stocks with voting rights, or 10 percent given that they don’t exercise voting rights.

The recapitalization of K bank comes much earlier than anticipated.

The bank originally expected to raise additional capital two or three years after its launch. But the decision to recapitalize comes just four months after it opened in April this year.

“[K bank] decided to move up the recapitalization due to the business performance that exceeded initial expectations,” the company said in a press release.

Before the launch, the company set the goal of accumulating 500 billion won in deposits and issuing 400 billion won in loans by the end of the year. The company outperformed its own expectations in just two months, raking in around 710 billion won in deposits and providing 630 billion won in loans by the start of August, according to a spokesperson from the bank.

BY CHOI HYUNG-JO [choi.hyungjo@joongang.co.kr]
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