Korea's Kakao Bank seeks as much as US$2.3b in IPO

Seoul

KAKAO Bank, the Internet-only lender backed by South Korea's Kakao Corp, is planning to raise as much as US$2.3 billion in an initial public offering, joining a rush by the country's companies to sell shares.

The bank is selling 65.45 million new shares at between 33,000 won (S$39.18) and 39,000 won apiece, according to a filing on Monday. At the top end of the range, the company would raise 2.55 trillion won and have a market capitalisation of more than US$16 billion, based on the total outstanding stock after the debut. The listing could make Kakao Bank the third most valuable lender in Korea, after KB Financial Group and Shinhan Financial Group.

It's the latest listing by South Korean corporates, following the debut of online retailer Coupang in New York as well as a proposed float by Krafton. Kakao, which has been pushing for listings of its affiliates, listed Kakao Games last September, while Kakao Pay is also planning an IPO this year. Kakao Mobility and Kakao Entertainment are also considering listings.

Kakao Bank was formed in 2016 after the Korean government offered online banking permits for the first time in 2015. The bank has benefited from its parent company's Kakao Talk, the country's largest mobile messenger service with 46 million active users out of a population of about 51 million.

Kakao Banks' advisers based their pricing estimates on comparisons with Rocket Cos - the operator of Quicken Loans, worth about US$40 billion - as well as online finance firms like TCS Group Holding and Nordnet, according to the Korean company. The trio, along with Brazilian firm Pagseguro Digital trade at about five to nine times book value.

The lender is seeking to go public just as competition in the online banking sector heats up. Viva Republica plans to launch Toss Bank as early as September after receiving South Korea's third Internet banking licence while K Bank, which has amassed new users in the crypto space, recently sought 1.2 trillion won from shareholders including Bain Capital to grow its business.

Subscription for the IPO will take place over two days starting from July 26, followed by its debut on Aug 5. KB Securities and Credit Suisse Group are the lead arrangers for the offer. BLOOMBERG