K Bank IPO Outlook and CEO’s Response to Concerns
The highly anticipated IPO of K Bank is scheduled to take place later this month, specifically on October 30. In light of upcoming events, CEO Choi Woo-hyung has addressed concerns raised by lawmakers regarding the bank’s partnership with the cryptocurrency exchange Upbit and potential fears of a “bank run.” During a press conference held on October 15 in Yeouido, Seoul, Choi confidently dismissed these concerns while engaging with journalists.
Concerns from Lawmakers
Rising apprehensions regarding Upbit’s significant contribution to K Bank’s deposit base have sparked discussions among legislators. Lawmaker Lee Kang-il from the Democratic Party of Korea expressed his worries earlier in the month. He pointed out that Upbit customers constituted about 20% of K Bank’s deposits, arguing, “If Upbit transactions are cut off, it will result in a bank run at K Bank.” This assertion links to broader concerns about the separation of finance and industry, which aims to prevent financial entities from being overly influenced by industrial capital.
K Bank’s Strong Position
In response to these claims, Choi stated that K Bank does not depend on Upbit deposits to fund its loans. He elaborated, “Upbit deposits are not being used as a funding source for loans. Instead, they are meticulously managed and matched with highly liquid investments such as government bonds and money market funds.” Choi further asserted his belief that a bank run is “unlikely” even if Upbit deposits were to stop, reinforcing the stability of K Bank’s operations.
K Bank and Upbit Partnership Dynamics
Under South Korean law, all KRW-trading cryptocurrency exchanges must collaborate with local banks to provide verified fiat on/off ramps, a requirement that has benefited K Bank due to its partnership with Upbit. The alliance proved especially fruitful during the pandemic, allowing Upbit and K Bank to offer seamless banking services without the need for in-person branch visits. This convenience helped Upbit capture a significant share of the domestic crypto market, securing over 80% of trades.
Future Prospects and Anticipated IPO Details
As K Bank approaches its IPO, the company has set a target of 82 million shares for listing, with anticipated share prices ranging between KRW 9,500 and KRW 12,000 ($6.99-$8.83). If the upper limit is achieved, this could propel the total amount raised through the public offering to approximately $723.7 million. CEO Choi mentioned that, despite recent challenges, the percentage of Upbit-related deposits on their platform has decreased, and their other business activities are compensating for fluctuating interest rates.
Nurturing Future Collaborations
In light of questions surrounding the future of the partnership with Upbit post-IPO, Choi expressed optimism regarding their ongoing collaboration. As their contract with Upbit is set to expire in October next year, he noted, “K Bank, along with BC Card, is working with Upbit to develop new products and services that synergize our banking and payment services with their crypto offerings. We believe this fruitful partnership will endure in the future.” By fostering these connections, K Bank is likely positioning itself for continued growth and innovation in the evolving financial landscape.