![]() The IPO was the country's fourth-largest and its most subscribed ever with institutional demand reaching $2.2 trillion, marking another high point in what is shaping up to be a bumper year for South Korean stock market floats even if some valuations have been slashed in recent offerings. K Bank, owned by BC Card and other domestic firms, reported an operating loss last year and has yet to announce any plans to list. It also extends loans for the lump sums that Koreans must provide upfront when renting a property and plans to expand into mortgages and loans to small businesses.Īlthough Kakao Bank must compete with digital services from traditional banks, there is only one other pure online lender in South Korea, K Bank. It offers unsecured personal credit loans and now holds 6% of that market. Three-quarters of the 804.2 billion won it made in operating profit last year was interest income. Kakao Bank raised some $2.2 billion in its IPO and plans to use the proceeds to expand its platform-related businesses, which still only account for 6% of its income. Some market participants said, however, that Kakao Bank's debut valuations were hard to justify given its earnings, noting that KB Financial is expected to post around 3 trillion won in net profit this year, more than ten times what Kakao Bank is likely to make. "It's the only purely mobile digital bank in the world that has grown into a large bank with 28.6 trillion won ($25 billion) in assets in just four years," said Seo. Kakao Bank became profitable in 2019 after less than two years in operation and has 13.35 million monthly active users, making it the largest financial app in the country. On top of that, it seems some funds have been rerouted here due to the cancellation of Ant Financial's IPO and other major offerings from China amid the recent tech crackdown," said Kim Ji-young, analyst at Kyobo Securities. "The heavy demand was due to local institutions not getting as much as they wanted during bookbuilding and foreign firms with money earmarked for fintech investments. Its shares closed at 69,800 won on Friday, compared with its IPO price of 39,000 won and valuing it at roughly $29 billion.īy contrast, KB Financial Group Inc (105560.KS), South Korea's biggest traditional financial group, was worth $19 billion. "Shareholders are bullish as it's a platform, not just a bank," said Seo Young-soo, an analyst at Kiwoom Securities.
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