South Korean bank Kakao Bank shares jump nearly 80% on commercial debut

Shares of Kakao Bank climbed nearly 80% when it debuted in the South Korean market on Friday.

Kakao Bank is South Korea’s first digital bank to go public and has been the country’s largest IPO since 2017 when Netmarble went public.

By the end of South Korea’s trading day on Friday, Kakao Bank stock had jumped 78.97% from its issue price.

Kakao Bank’s gains came amid wider pressure in South Korean markets, which saw the Kospi drop around 0.2% on the day. Shares affiliated with Kakao Bank also fell, Kakao Corp. and Kakao Games falling by more than 2% each.

The public listing made Kakao Bank South Korea’s most valued financial company by market capitalization, according to local news agency Yonhap News.

In an exclusive interview with CNBC, Kakao Bank CEO Yun Ho-young dismissed concerns that the IPO was overvalued.

“I think the price of the IPO is largely set by the market, Kakao Bank is a bank in the mobile age,” he said.

“We are different from existing banks and we are creating new market opportunities,” he added. “One million customers opened the mobile banking account with Kakao Bank in just five days after launch. Based on these numbers, don’t you think Kakao Bank is certainly different from legacy banks? “

Kakao Corporation holds a 31.62% stake in Kakao Bank as the majority shareholder, according to the bank’s IPO press release in August. It became profitable in 2019, just two years after launching its service in 2017.

Yun said the bank hopes to expand beyond South Korea after listing.

Prior to its public debut, a few global companies had contacted the digital lender to seek partnerships, Yun said.

“At this time, we are prioritizing focusing on national events and had capital limits to continue our global expansion,” he said. “However, after the IPO, we will actively seek global opportunities.”

Regarding the company’s future plans as it seeks to fend off competition from incumbents, Yun said it is including a first expansion in the mortgage industry for its banking business. Kakao Bank currently has 13 million monthly active users, according to Yun.

– CNBC Chery Kang | contributed to this report.