[An image captured from Kakao Bank's website]
SEOUL -- South Korea's web service giant Kakao won state approval to raise shareholdings in an internet-only bank, securing a chance to expand its banking business through greater access to capital. The greenlight from financial regulators comes amid Kakao Bank's growing popularity.
In an anticipated decision on Wednesday, the Financial Services Commission allowed the operator of South Korea's leading messenger app Kakao Talk to raise its stake in Kakao Bank from 18 percent to a maximum limit of 34 percent under a new law governing internet banks.
To prevent conglomerates from dominating banks, South Korean has limited the industrial ownership of banks. President Moon Jae-in eased regulations and allowed internet-only banks to raise their capital. South Korea has two internet-only banks, K bank and Kakao Bank, in operation, but financial regulators have promised to approve more internet-only banks.
Since Kakao formed a consortium with Korea Investment Holdings, KB Kookmin Bank, eBay Inc. and China's Tencent Holdings to open an internet-only bank in 2017, Kakao Bank has quickly gained popularity among local mobile-savvy customers with easy lending.
Kakao said it would purchase shares worth 208 billion won ($176 million) from Korea Investment Holdings to become the single largest shareholder of Kakao Bank, provide diversified services like ordinary commercial banks and push for initial public offering. Kakao Bank's current capital stands at 1.3 trillion won.
Internet-only banks have forced commercial banks to renovate their online and mobile banking services.
reporter
Lim Chang-won
cwlim34@ajunews.com
