Finda to become 1st fintech firm to acquire savings bank
Summary
Finda is set to acquire Daewon Savings Bank in South Korea, potentially becoming the first Korean fintech company to acquire a savings bank. The Financial Services Commission’s subcommittee approved the application Friday, with a final decision scheduled for Wednesday. Finda plans to offer loans and deposits directly and transform the lender into an AI-native bank using digital services and loan-comparison data.
Key Facts
- Finda agreed in June to purchase all of Daewon Savings Bank’s shares for about 12 billion won ($9 million).
- Finda plans to appoint a new CEO through board and shareholder meetings after receiving final approval.
- The company intends to use AI technology and loan-comparison data collected since 2019 to expand online lending nationwide.
- Daewon Savings Bank’s business region covers Daegu, North Gyeongsang Province and Gangwon Province, while regulations require savings banks to lend a designated share of funds within their business regions.
- As of the end of June, Daewon Savings Bank had total assets of 3.1 billion won and virtually no outstanding loans.
Logo of fintech firm Finda / Courtesy of Finda
Finda, a loan comparison platform, is set to acquire a savings bank, in what would be a first for a Korean fintech company, as it looks to build an artificial intelligence (AI)-native bank, industry officials said Monday.
The Financial Services Commission's subcommittee approved Finda's application to acquire Daewon Savings Bank on Friday. The regulator is set to make a final decision at its regular meeting Wednesday.
Finda signed a deal in June to acquire all of Daewon Savings Bank's shares for about 12 billion won ($9 million). The acquisition would allow the company to move beyond matching borrowers with lenders and offer financial services directly, including loans and deposits.
Once the deal receives final approval, Finda plans to appoint a new CEO through board and shareholder meetings.
The fintech firm aims to turn the lender into an AI-native bank, relying on digital services rather than a traditional network of branches. It plans to draw on AI technology and loan-comparison data it has collected since 2019 to expand its online lending business nationwide, the firm said.
The company also expects to broaden its range of products for borrowers with low to midlevel credit ratings, drawing on its ties with JB Financial Group, the fintech firm's second-largest shareholder.
But the acquisition also brings challenges. Savings banks have come under growing pressure from losses tied to real estate project financing and rising funding costs, which could become a test for Finda's ability to manage bad loans and secure stable funding.
The company will also have to meet rules requiring savings banks to lend a certain share of their funds within designated business regions, even as it seeks to expand its online services nationwide.
Daewon Savings Bank, based in Gyeonggju, North Gyeongsang Province, is a relatively small lender whose business region covers Daegu, North Gyeongsang Province and Gangwon Province.
Since its existing shareholder, Daea Savings Bank, began seeking a buyer in 2015, the lender has de facto been out of business. As of the end of June, Daewon had total assets of 3.1 billion won and virtually no outstanding loans.
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