K Bank Cuts IPO Price Range, Seeks to Reduce Reliance on Upbit

  South Korea’s first internet-only bank, K Bank, is making a third attempt at an initial public offering after delaying twice. The bank lowered its proposed offering price by nearly 30% from its last attempt and said it is working to reduce reliance on crypto exchange Upbit. It also outlined plans to use about 1 trillion won in new capital expected after listing to expand into small- and midsize business lending and the digital-asset market. 

CEO Choi Woo Hyung said at a news conference on Feb. 5 in Seoul that the bank had prepared a “shareholder-friendly” offering structure by lowering the price to reflect market expectations and adjusting the amount of stock that can be traded on the first day. 

K Bank previously pursued listings in 2023 and 2024 but withdrew after weak demand during book-building. The bank said it is facing a final window to go public because a 2021 capital increase included a drag-along clause with financial investors tied to completing an IPO by July this year. 

K Bank set its indicative price range at 8,300 to 9,500 won per share, up to 26% below the prior IPO range of 9,500 to 12,000 won. It also cut the offering size to 60 million shares from 80 million. Based on the range, its price-to-book ratio would be 1.38 to 1.56, far below KakaoBank’s level of about seven at the time of its listing. 

Chief Financial Officer Lee Jun Hyung said KakaoBank shares rose more than 30% over the past three days, pushing K Bank’s discount to about 30%. He said K Bank’s price range is set at a low level compared with competitors. 

Choi also addressed concerns about K Bank’s dependence on Upbit. He said that of 6 million new customers over the past two years, only 10% joined to use crypto assets. He said none of Upbit-related deposits are used to fund loans and are instead invested in highly liquid money market funds or government bonds, adding that even if those deposits leave, there would be “no impact at all.”

K Bank said it will begin preparations after listing to enter the corporate loan market for small and midsize businesses and plans to launch a product next year, which it said would be the first of its kind in South Korea. The bank aims to cut household loans, now more than 90% of its portfolio, to 50% and balance household and corporate lending 50-50. With small-business loans viewed as higher risk, Choi said the bank will stabilize delinquency rates by splitting its portfolio evenly among unsecured credit loans, guaranteed loans and collateralized loans. 

K Bank also pledged a post-listing value-up policy. Choi said the bank will seek to raise return on equity from about 5% to 15% and will actively consider shareholder returns including dividends and share cancellations.