K bank speeds up IPO timeline

K bank headquarters in central Seoul / Courtesy of K bank

By Anna J. Park

K bank, the country's first internet-only bank, has accelerated the timeline for its IPO, as it completed selecting its underwriters earlier this month.

According to the investment banking industry, K bank selected NH Investment & Securities, Citigroup Global Markets and JPMorgan as lead underwriters, while tapping Samsung Securities as well for a co-underwriter, following their presentations during the competition bid. NH Securities and Samsung Securities earned their positions for the IPO in competition with Mirae Asset Securities and Shinhan Financial Investment.

Having selected the underwriters, the bank is expected to speed up its public offering schedule by the end of this year. Previously, it planned to go public sometime around 2023, after reaching the break-even point and logging an annual profit.

Yet this schedule has been accelerated after the internet-only bank turned profitable earlier than expected, recording an annual net profit of 22.4 billion won ($18.7 million) last year. It is an impressive achievement, given that the bank logged an annual net loss of 105.4 billion won in 2020.

With its net profit stoking its corporate value, K bank's stocks, which are still unlisted, are being traded at around 20,800 won on private trading platforms. It is an increase of some 25 percent in just three months, when considering the stock was trading at around 16,700 won last November. The price signifies the bank's corporate valuation at over 7.8 trillion won.

Given that the market cap of KakaoBank ― K bank's main competitor and the country's other main internet-only bank ― is standing at around 20 trillion won on the KOSPI, K bank's corporate valuation is estimated to be around 10 trillion won. Yet KakaoBank's downward trend in its stock price could be a warning sign for K bank, as KakaoBank's market cap once exceeded 40 trillion won in the initial phase of its IPO early last year.

However, market watchers also point out that K bank has its own strength due to its close partnership with Upbit, the country's largest cryptocurrency exchange. As Upbit requires its users to have a K bank account to verify their identities, the number of K bank's customers soared to over 7 million late last year, which is more than triple the 2.19 million users it had in 2020.