Kakao Bank Corp., a South Korean digital bank, has chosen Credit Suisse and KB Investment & Securities as its advisors for its upcoming initial public offering (IPO), Reuters reported.
Citigroup, in addition, will serve as a co-advisor. The timing of the IPO hasn’t been decided, although Reuters reported that analysts predict it will happen in the second half of 2021.
Kakao Bank is one of only two digital banks in the country and became profitable in 2019, according to Reuters, after less than two years of operation. The bank’s most current valuation is estimated to be around 10 trillion won ($9.1 billion).
Kakao Bank has done well for itself as of late, with a net profit of 40.6 billion won (nearly $37 million) for the quarter from July to September, Reuters reported. The bank benefited from an influx of customers from Kakao Corp., which is a dominant chat app and a 32 percent stakeholder in the bank.
In addition, Kakao Bank had rapid lending growth, higher net interest margins and more efforts to increase the proportion of low-cost deposits, according to Samsung Securities analyst Kim Jae-woo, quoted by Reuters.
According to filings, per Reuters, Kakao Bank issued shares worth 250 billion won ($227 million) to private equity firm TPG Capital Management, along with 250 billion won to Anchor Equity Partners, in October and November, respectively, which valued the bank at 9 trillion won ($8.2 billion).
Kakao Pay, the FinTech arm of Kakao Corp. with over 34 million users, is also seeking an IPO, PYMNTS reported. Once that goes through, it will be the first South Korean FinTech working in mobile payments to make a public debut. The IPO will help Kakao Pay enter into new business areas, including adding digital insurance to its services.
The app will be able to “cover all areas of finance, with the exception of banking, which is accounted for by Kakao Bank,” according to the report.
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