[ad_1]
SEOUL – Shares of Kakao Bank surged on Friday as they debuted on South Korea’s benchmark stock exchange, as the country’s largest digital lender challenges traditional financial services firms.
Kakao Bank raised 2.6 trillion won ($ 2.3 billion) on its IPO, offering 65 million shares and making the second-largest IPO this year. Krafton, a game developer, raised 4.3 trillion won when it went public earlier this week and will be listed on Kospi on Tuesday.
The shares opened 37.7% from its initial public offering price of 39,000 won per share. This propelled the bank to the number one financial company in the Kospi Index by market value, to 30.2 trillion won.
They continued to rise, trading at 68,000 won per share in the first 30 minutes of trading.
Kakao Bank’s debut comes as South Korea experiences its hottest IPO market on record, analysts expect at least 20 trillion won to be raised in 2021, or about four times more than last year. The recent interest of retail investors in IPOs has fueled market growth, a role traditionally played by institutional investors.
Online banking faces established competitors by offering fast and easy financial services through its mobile app. Kakao Bank had 16.2 million customers in March. The app is the most popular in the financial industry, with 13.4 million monthly active users.
Analysts say South Korea’s legacy banks face increasing competition as Kakao Bank enters several credit segments.
“It [Kakao Bank] had lower costs than most local banks in 2020, [due to] technological advancements and operation without physical branches, “Ok Tae-jong, senior analyst at Moody’s, said in a report last month.” Competition will intensify as Kakao Bank expands its loan portfolio and capital base. “
Ok said the virtual bank plans to offer mortgages and lending products to merchants, which would expand its addressable market to 65% of South Korean won-denominated loans in the next 12-18 months, up from just 14% currently.
Regarding Kakao Bank’s post-IPO plans, CEO Yun Ho-young said last month that his company would consider expanding into overseas markets, with Asia likely the number one destination. He said this could be done through capital investments or joint ventures with fintech partners.
Kakao Bank is a subsidiary of Kakao, the country’s second largest internet company, known for its chat app, KakaoTalk.
[ad_2]
Source link
