S.Korea's Kakao Bank IPO to raise $2.2 billion after pricing at top of range

SEOUL (Reuters) -South Korean digital bank Kakao Bank Corp will raise $2.2 billion in its initial public offering (IPO), the company said in a filing on Thursday.

The shares were priced at 39,000 won each, the top of the range announced in a regulatory filing this month, to raise about 2.6 trillion won ($2.22 billion).

The listing expected in August will be the country’s biggest since game company Netmarble raised 2.7 trillion won in its 2017 IPO, overtaking this year’s 2.2-trillion-won listing of battery material maker SK IE Technology Co Ltd.

Kakao Bank, one of two digital banks, ranks No. 1 among South Korea’s financial apps with 13.35 million monthly active users (MAUs), while holding 14th place among all the nation’s apps, the company said.

Having become profitable in 2019 after less than two years in operation, it reported net profit of 113.6 billion won in 2020, an eightfold increase from 13.7 billion the previous year, it said.

Last year, interest income accounted for 75% of its operating income, while 19% came from non-interest income, and 6% from “platform profits” such as connecting users to other financial firms’ services and advertisements.

The bank plans to use the funds to grow in these areas, including offering mortgages, which are South Korea’s most common type of loan, by mobile telephone early next year at the latest, Chief Executive Daniel Yun told reporters.

It will also develop financial technology, weigh potential acquisitions of fintech firms, and make investments with an eye to entering the global market, he added.

($1=1,149 won)

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