Do not go gentle into that good night, old age should burn and rave at close of day; Rage, rage against the dying of the light, though wise men at their end know dark is right, because their words had forked no lightning they, do not go gentle into that good night.
New internet-only bank to be announced May 26
The Financial Services Commission head office in Seoul / Yonhap
By Jhoo Dong-chan
By Jhoo Dong-chan
The Financial Services Commission (FSC) will announce the results of its ongoing screening for a new internet-only bank as early as Sunday, the financial regulator said Wednesday.
Two consortiums led by Kiwoom Securities and Toss, a mobile money transfer app owned by Viva Republica, have bid for licenses.
The FSC said that it could grant licenses to both consortiums if they are qualified but it is also possible that neither of them get approved.
Kiwoom Securities CEO Lee Hyun
The Kiwoom consortium, which managed to form a powerful alliance with big-name partners such as Hana Financial Group, mobile carrier SK Telecom and online shopping mall 11st, is expected to easily get the approval, but the hurdle seems a bit too high for the Toss consortium.
Market observers first displayed their concerns about Viva Republica's cash reserves for possible contingencies after the exit of two strong allies ― Shinhan Financial Group and Hyundai Marine & Fire Insurance ― from the Toss consortium.
Under related laws, the minimum capital requirement for a new internet-only bank is about 25 billion won ($22.1 million). In a bid to properly operate future loan services, however, market observers say it requires at least 1 trillion won.
According to the Financial Supervisory Service, Viva Republica has failed to post a profit over the past three years, but now must secure the required cash for the new internet-only bank's future business.
“It takes time for a new internet-only bank to post a profit even after its establishment,” Samsung Securities researcher Kim Jae-woo said. “Considering they are latecomers to the market, they are likely to invest extra money to attract more customers.”
Viva Republica said it has attracted Silicon Valley-based venture capital company Altos Ventures, U.K. asset management firm Goodwater Capital and Brazilian investor Ribbit Capital to replace Shinhan and Hyundai Marine.
Critics also claim Viva Republica should be considered to be industrial capital rather than financial capital. Under related laws, a non-financial capital is not allowed to own more than a 34 percent stake in an internet-only bank.
Viva Republica, however, stated in its application for the preliminary screening that it wants to hold a 60.8 percent stake in the Toss consortium, citing Toss is registered as an “electronics financial business operator” according to Statistics Korea's classification.
FSC Chairman Choi Jong-ku agreed with Viva Republica's claim.
“I don't think Viva Republica is a non-financial capital,” he said during a press conference at the Korea Federation of Banks head office in Seoul, Wednesday. “It should follow Statistics Korea's classification.”
Viva Republica founder Lee Seung-gun
KB Financial Group Digital Strategy Department Director Park Hyoung-joo displayed his skepticism about the future course of a new internet-only bank.
“Not only existing internet-only banks such as K bank and Kakao Bank but also commercial banks started featuring various characteristics of internet-only banks. I don't see any reason for customers to open a new bank account at an internet-only bank,” he said.