Viva Republica, operator of mobile money transfer service Toss, said Tuesday that its consortium has applied for a business license to establish a new internet-only bank, making its second attempt this year.
Its shot at winning is seen as more plausible this time, especially as the previous main rival -- a consortium led by brokerage Kiwoom Securities -- renounced its own bid.
“We pioneered Korea’s fintech industry through Toss. Now, through Toss Bank, we plan to build a new internet-only bank model which breaks free from conventional financial practices,” the company said in a release.
The Toss Bank consortium’s announcement came on the last day of the license application period, reflecting last-minute adjustments due to the entry of new shareholders.
The Toss operator will act as the consortium’s largest shareholder, accounting for 34 percent of the stakes. KEB Hana Bank, Hanwha Investment & Securities, Korea Federation of SMEs and retailer E-land World will each hold 10 percent. Standard Chartered Bank Korea, Welcome Savings Bank and security information technology firm Crosscert will participate with single-digit percentages of stakes.
The consortium’s conventional investors -- Altos Ventures, Goodwater Capital and Ribbit Capital -- will also join in the second round, officials said.
In May this year, the Financial Services Commission turned down both applicant consortia -- respectively led by Toss and Kiwoom -- for lack of financial blueprint.
“The business license for a new internet-only bank is the FSC’s top priority task for the second half of the year,” FSC Chairman Eun Sung-soo said last week, alluding that the commission will select at least one applicant this time.
After closing the applications and handing them over to an outside reviewing committee, the FSC aims to come up with the final approval results by year-end, officials said.
Daou Kiwoom Group, on the other hand, issued a press release earlier in the day and confirmed that it will not make a rebidding in the internet-only bank business.
The financial group’s renunciation was largely attributable to the withdrawal of KEB Hana Bank, which joined the Toss team.
Another relatively minor consortium -- led by the newly established cooperative union Next Network Security Provider -- had also vowed last week to submit its bid Tuesday afternoon.
For the first time here in 2017, two internet-only banks – K bank and Kakao Bank -- kicked off business, offering banking services without brick-and-mortar branches or face-to-face contact with users.
The appearance of these new market competitors pushed traditional banks to cut commission fees and improve their online and mobile banking services.
By Bae Hyun-jung (email@example.com