- KakaoBank Corp. South Korea's first Internet-only lender went public in Seoul, increasing more than 70% in its trading debut in Seoul, making it the country's largest retail lender by market value (2005).
The stock surge of as much as 74% puts the capitalization of traditional lenders with no brick-and-mortar branches at more than 32 trillion won bigger than the country's retail banks.
The debut could symbolize a shift in the map of South Korean financial groups. Before KakaoBank trading debut, the country's largest financial firm was KB Financial Group Inc. with about 22 trillion won in market value followed by Hana Financial Group Inc. with roughly 20 trillion won and Shinhan Financial Group Co. with about 13 trillion won
At its IPO price, KakaoBank was valued at 18.5 trillion won even though its assets were less than a tenth of some of the country's biggest retail banks.
The share float was the biggest in KakaoBank this year after Krafton Inc. After a $3.8 billion offering, the developer behind PlayerUnknown Battlegrounds is scheduled to make its trading debut on Tuesday after floating $3.8 billion in shares.
'The actual market capital appears to have overshot expectations, Kim In, an analyst at BNK Securities, said in a research note before its debut, initiating the coverage at a'sell' rating with a price target of 24,000 won, lower than the share floating price. The reality is that there is a huge concern about the sharp fall of shares in Indian stock market.
Many projects through its platform business models are difficult to execute while its profit from those new businesses are meager, said Kim. He added that most of it's profit comes from interest rates and loans, just like other traditional banks, he said.
Kakao Games Corp. raised 384 billion won in September and its share soared around 250% since the IPO. Kakao Pay Corp., the country's largest online payment service, was scheduled to debut on Aug 12 but the listing was delayed after regulators asked it to revise its prospectus. More IPOs are likely to follow at Kakao as the ride-hailing, entertainment and Japan business units may go public.Kakao Bank was formed in 2016 after the Korean government launched online-banking permits for the first time in 2015. Its users grew faster as the online banking has benefited from the parent company's messenger services with 46 million active users out of a population of about 51 million.Although it's leading the online bank industry, competition is rising in the country, which is aggressively adopting fintech services.