[THE INVESTOR] Korea’s second internet-only bank Kakao Bank has decided on a 500 billion won (US$439 million) capital raise just two weeks after launch to bring its total capital to 750 billion won, the firm said after a board meeting on Aug. 11.

The bank has paid-in capital of 300 billion won, and it originally planned to raise around 400 billion next year. But it decided to go ahead with the increase now due to surging demand for loans. As of Aug.8, it extended 770 billion won of loans, while the total number of accounts topped 2 million, drawing more than 900 billion won in deposits and savings. 

For a capital raise, Kakao Bank’s shareholders will pitch in. Currently, there are nine shareholders, including Korea Investment Holdings which has 58 percent stake, Kakao has 10 percent, KB Kookmin Bank has 10 percent, Netmarble has 4 percent, eBay has 4 percent and Tencent has 4 percent.

The decision came a day after K bank, the first internet-only bank, decided to raise 100 billion won by issuing 20 million new shares. K bank has also observed a rapid growth in loans and had to stop selling one of its signature credit-based loan products in July. The bank’s outstanding loans exceeded 630 billion won as of Aug. 11, outpacing its goal of 400 billion won this year.

“We originally planned to raise 250 billion won in two to three years but had to do it earlier,” said an official at K bank.

By Park Ga-young (gypark@heraldcorp.com)