South Korea’s financial regulator has rejected one of three contenders seeking a license to operate a new internet-only bank here, making way for a two-way competition between two local finance powerhouses: fintech company Viva Republica and local brokerage Kiwoom Securities.

The Financial Services Commission said late Tuesday that it had rejected Anyband Smart Bank’s application due to a weak shareholder base and the submission of inadequate documents -- a move that had been widely expected since the application stage in March. 

The FSC plans to continue its review of the two remaining contenders -- Toss Bank led by Viva Republica, operator of popular payment platform Toss, and Kiwoom Bank led by Kiwoom Securities.

Toss Bank has underscored its forte as an innovative fintech leader, citing plans to become a “challenger bank” in the market and introduce ways to better serve “thin filers.”

Kiwoom Securities has stressed its financial strength and a diverse shareholder base that includes telecommunications and retail companies, such as SK Telecom and Korea Seven. KEB Hana Bank is also participating in the Kiwoom-led consortium.

The FSC plans to make a decision within this month. Though a maximum of two consortia are eligible for preliminary approval, the regulator has hinted that it may approve only one.

By Sohn Ji-young (jys@heraldcorp.com)