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Toss Bank and K bank logos (courtesy of each company) |
South Korea’s online banking firm K bank is gearing up for what could be one of the biggest market debuts this year, while its crosstown rival Toss seeks to follow suit in 2025.
The country's first internet-only lender K bank is taking the final steps for its listing on the benchmark Kospi at the end of October.
K bank said on Sept. 13 it filed a securities registration statement with the Financial Services Commission for review. It plans to offer 82 million new shares, with a target price range of 9,500 won to 12,000 won ($7.16-$9.05) per share, and expects the total offering value to reach around 1 trillion won.
According to the bank, the target price was set based on comparisons with digital banks in the US and Japan, such as Japan’s SBI Sumishin Net Bank and The Bancorp Bank’s parent company in the US, as well as Kakao Bank, the only listed internet-only bank in Korea.
“K bank intends to use the IPO proceeds to advance innovative and inclusive finance,” said a company official, emphasizing a focus on expanding small and medium-sized enterprise loan services, enhancing tech leadership and building an innovative investment platform. “We will ensure thorough preparations to fully realize our corporate value.”
With the new shares, K bank’s total share count at IPO will be approximately 417 million, with a market capitalization of above 5 trillion won if the upper end of the price range is achieved.
Following demand assessments with institutional investors, K bank will conduct a public subscription from Oct. 21-22, with the market listing slated for Oct. 30.
This is K bank’s second take at an IPO, after a failed attempt in 2022 due to a challenging investment climate and growing financial instability. The projected market value, estimated at a minimum of 3.9 trillion won based on the lower end of the price range, surpasses this year’s other notable debuts, including ship maintenance company HD Hyundai Marine Solution and game developer Shift Up, valued at 3.7 trillion won and 3.48 trillion won, respectively.
Since launching in April 2017, K bank has significantly improved its performance ahead of the market debut. In the first half of this year, it reported a net profit of 85.4 billion won, up from 12.8 billion won last year and higher than the 83.6 billion won it achieved in 2022. Its customer base grew by 1.94 million to 11.47 million, with deposits and credit balances rising by 25.8 percent and 23.7 percent, respectively.
Meanwhile, Viva Republica, the fintech operator behind financial services app Toss and parent of internet-only Toss Bank, is also preparing for an IPO. The company is aiming for a 2025 listing and appointed Korea Investment & Securities and Mirae Asset Securities as lead underwriters in February.
Viva Republica’s market valuation is estimated at between 10 trillion won and 20 trillion won, while Toss’s estimated enterprise value stands at around 8 trillion won based on current over-the-counter share values.
The firm’s future valuation will hinge on performance improvements. It recently achieved its first quarterly surplus since its 2013 founding in the second quarter. In the first half of this year, Toss reported sales of 914.1 billion won, up 40 percent on-year, and reduced operational losses by 92 percent to 9.4 billion won.
Viva Republica is expected to see its first profitable year, driven by balanced growth in service revenue and strong subsidiary performances. Toss Bank reported a record half-year net profit of 24.5 billion won, while Toss Securities became the first Toss subsidiary to report an annual profit in 2023.
Yet, allegations about CEO and founder Lee Seung-gun have cast a shadow over Viva Republica’s otherwise smooth IPO preparations. Earlier this month, rumors spread that Lee took illegal loans from the now-bankrupt US cryptocurrency exchange FTX Trading, using his stake in Viva Republica as collateral.
The allegations suggest Lee borrowed approximately 700 billion won from FTX’s subsidiary, Maclaurin Investment, in 2021. Lee, who holds a 15.57 percent stake in Viva Republica, is the company’s largest shareholder.
The company denied the allegations, saying that the loans were not made illegally. While Lee had borrowed around 65 billion won from Maclaurin, the company shares were not used as collateral, and since they have already been repaid, there will be no impact on the company's business nor the upcoming IPO process, an official from Viva Republica explained.
Despite concerns about the CEO’s financial situation, industry insiders view the loan as relatively insignificant compared to Lee’s estimated 1 trillion won stake in the company. “The company’s value has consistently grown over the past decade, and Lee has maintained his 15 percent stake, indicating his financial stability,” an industry insider noted.
Viva Republica said that it has not set a specific timeline for its market listing and is awaiting optimal conditions.
“We are evaluating various factors, including our investor relationships and market conditions. The focus is not just on the timing of the debut but also on achieving the best valuation. We are assessing the situation to determine the right moment for our listing,” said a company official.
